UAN: 111-331-331 04 February, 2012 | Rabi-ul-Awal 11, 1433

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Glossary of Islamic Banking Terminology

- M -

 

 

Ma’un

Free-of-cost lending of domestic utensils, pro­fessional instruments and other things of ordi­nary needs.

 

Mabrur

A Hajj that is accepted by Allah because of its perfection  in both inward intention and outward observation of the traditions of  Prophet Muhammad (S.A.W.)

 

Madinah

A city in Saudia Arabia, often called Madinaal-Munawarra - the Illuminated, or the EnlightenedCity - where the   revelation of the Quran was completed, and in which Prophet

 

Mahjoor

A person who is prevented or restrained to do business by law or Shariah.

 

Mahram

A man whom a woman can never marry because her close relation with him (e.g. father, brother, uncle, son, etc.). Her husband is also her Mahram.

 

Maiser

Gambling. Literally means getting something too easily.

 

Majhool

Unknown; uncertain.

 

Makruh

Abominable; reprehensible; disapproved.

 

Mal

Wealth

 

Manafi'

Plural of manfa'ah (benefits; usufruct; profits; utility).

 

Manafa'ah

See manafi'

 

Maniha

Granting of usufruct of a productive asset to a needy person for a specific period.

 

Mazru'

The crop to be cultivated.

 

Mazru'ah

Land given out by way of muzdra'ah.

 

Milk mushtarak

Co-ownership; joint ownership.

 

Milk

Ownership; property.

 

Milkiyah

Ownership.

 

Mithli

Fungible; things sold by weight or measure, and for which one quantity or measure is a substitute for another.

 

Modharabah

A contract between Financier and Working partner. A profit and loss sharing contract in which one party provides capital and the other party manages the enterprise. In ease of loss the provider of capital bears the financial loss while the worker loses his labor. In case of profit both parties share it in agreed proportions. An agreement between two or more persons whereby one or more of them provide finance, while the others provide entrepreneur ship and management to carry on any business venture whether trade, industry or service, with the objective of earning profits. They share the profit in an agreed proportion. The loss is borne only by the financier's in proportion to their share in total capital. See also sahib al-mal and mudarib.

 

Mu'amalah

Transaction; agreement; term used for the agreement concluded by the Prophet with the people of Khaybar

 

Mu'ayyan

Ascertained; determined; commodity ascertained through weight or measure for purposes of sale.

 

Mu'ajjal

See bay al-mu'ajjal.

 

Mubah

Things/acts permissible in Islamic law; permissible.

 

Mubashir

Person who commits an act personally and of his own volition rather than through another person.

 

Mudabbar

A slave whom his master has declared to be free upon the master's death.

 

Mudharaba / Mudarabah

The term refers to a form of business contract in which one party brings capital and the other personal effort. The proportionate share in profit is determined by mutual agreement. But the loss, if any, is borne only by the owner of the capital, in which case the entrepreneur gets nothing for his labour. The financier is known as "rab-al-maal" and the entrepreneur as "mudarib". As a financing technique adopted by Islamic banks, it is a contract in which all the capital is provided by the Islamic bank while the business is managed by the other party. The profit is shared in pre-agreed ratios, and loss, if any, unless caused by negligence or violation of terms of the contract by the "mudarib" is borne by the Islamic bank. The bank passes on this loss to the depositors.

 

Mu'amalah

Transaction

 

Mudharib

A working partner; the partner who provides entrepreneur ship and management in a mudarabah agreement as distinct from the sahib al-mal who provides the finance.

 

Mufawadhah

A basic contract of partnership based on wakalah and kafalah that requires full commitment from the partners and to achieve this purpose tries to maintain equality in the capital, labor, liability and legal capacity and also declares each partner to be a surety for the other it is converted into the 'inan partnership if such equality is disturbed.

 

Muhaqalah

Sale of un-harvested crop. (Sale contract of this kind is not permissible in Islam).

 

Mukatab

A slave with whom his master has concluded the contract of kitabah by virtue of which the slave buys his freedom and agrees to pay for it in installments.

 

Mukhabarah

Sharecropping contract in which the landowner reserves crop of a particular area for himself. (Sharecropping contract of this kind is not permissible in Islam); another name for the contract of musaqah derived from the transaction with the Jews of Khaybar.

 

Muqaradhah

Another name for mudharabah used by the Malikis; see also qirad.

 

Muqtadha 'aqd al- 'inan

Implied contract of 'inan; conditions implied by the mere use of the word 'inan in the contract of partnership.

 

Murabaha

Lit: Sale on profit; Cost plus profit, sale at stated cost price and mark-up, sale at a specified profit margin. The term is, however, now used to refer to a sale agreement whereby the seller purchases the goods desired by the buyer and sells them at an agreed marked-up price, the payment being settled within an agreed time frame, either in installments or lump sum. The seller undertakes all the management needed for the purchase and also bears the risk for the goods until they have been delivered to the buyer. See also bay' al-mu'ajjal. This has been adopted as a mode of financing by a number of Islamic banks. As a financing technique, it involves a request by the client to the bank to purchase a certain item for him. The bank does that for a definite profit over the cost which is settled in advance. Some people have questioned the legality of this financing technique because of its similarity to Riba or interest.

 

Musahamah

In Egyptian law it is the name for a corporation or for a public limited company.

 

Musaqah / Musaqat

Contract for the watering of trees between the owner of land and a worker on the condition of sharing the produce; leasing fruit garden on fruit-sharing basis.

 

Musahamah

In Egyptian law it is the name for a corporation or for a public limited company.

 

Musha'

A share that is undivided and completely mixed up with the shares of the other partners, that is, it is to be found in each particle of the joint property.

 

Musharkah

The term refers to a financing technique adopted by Islamic banks. It is an agreement under which the Islamic bank provides funds which are mingled with the funds of the business enterprise and others. All providers of capital are entitled to participate in the management but not necessarily required to do so. The profit is distributed among the partners in pre-determined ratios, while the loss is bome by each partner in proportion to his contribution. see sharikah.

 

Mutaba'ah

Demand; demand by a creditor for the satisfaction of debts from the dealing partner or from the other partners.

 

Muzara'ah

Lit: Economic transaction; Sharecropping contract. Technically, contract for the cultivation of land between the owner of the land and the worker with the condition of sharing the produce.

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