Open Account

Sharia's principle

All contracts of operations and transactions will carry out in accordance with Islamic Shari'a principles which are as follows:

1. Murabaha

"Selling of goods on cash or credit keeping a "mark up" on its total cost under which a financier will buy goods in question and then put on-sale the goods to a required customer, at an agreed mark-up price, as per pre-fixed terms and conditions". Once the price is fixed on any goods/ product cannot be changed irrespective of the time as agreed between two parties, beforehand.

2. Ijara

It is "a contract for the use of rental assets for specific period of future time at a fixed rent". The asset in question must be in possession of the lease.

3. Musharaka

It is "a form of business set-up where two or more parties invest venture capital or project finance jointly in such a way that the profit/loss thus realized is shared between them, proportionately".

4. Istisn'a

It is "a contract where by a party undertakes to produce specific goods that is possible to be made according to certain specifications as agreed beforehand at a determined price and for a fixed date of delivery".

5. Mudaraba

"This technique involves two parties for a joint business transaction in which first party provides finance called investor at the disposal of second party called working partner who possesses skills to use the funds".

6. Qard-Hasan

"Qard-Hasan is a loan (interest free) given to someone who is in financial need". The repayment of such loan is not compulsory on the part of borrower (i.e. optional). However, if the borrower is financially sound later, morally is entitled to make repayment of the debt.

7. Dain

"Dain" is defined as a loan (interest free)". It is obligatory on the part of the borrower to repay the amount borrowed, as agreed mutually by both the parties. It is a commitment made by the borrower to repay the amount borrowed as well as commitment to honour the promise, in time.

8. Bia-Salam

This is "a sale of goods of defined specifications whose delivery will be made at a future date for a cash price in advance". The seller of the goods has to abide by the contract and deliver the goods of determined specification on a definite due date. In case of loss, the seller is responsible for 100% liability.

9. Speculating/Gambling

Contracts to ensure for a profit are as a form of gambling while dealing in futures contracts for speculative profit are speculating. Both the activities have been prohibited in Islam.

10. Wakala

A "Wakala" is an agency or a delegated authority where the Muwakkil (principal representative) appoints the Wakil (agent) to carry out a specific job or business or commercial activities on behalf of the Muwakkil.

11. Prohibited Commodities

Shari’a laws prohibit using or dealing in certain commodities such as alcohol, pork products or containing these products in any other forms. In addition to these, the Shari’a laws prohibit the following;
  1. - Legitimacy in trade activities.
  2. - Lawful sources
  3. - Moderate in expenditure (highly appreciated).
  4. - Narrowing the gap between rich and poor through institution of Zakah (poor due).
  5. - Proper governance of financial activities, i.e. debt documenting and witnessing.
  6. - Fulfillment of all contracts and prohibition against betraying any contracts
  7. - Prohibition against bribery to earn unfair advantage.
  8. - Elimination of Riba (interest).
  9. - Monopoly (not to increase price for the necessity items).
  10. - Exploitation.
  11. - Prohibited sale (e.g. force sale)
  12. - Prohibition against deriving income through cheating, dishonesty or fraud, etc.
  13. - Prohibition of short selling.
  14. - Gharar (elimination of uncertainty or ambiguity in contract, prohibited trade etc.)