POPULAR TERMS OF SHARIA BANKING

AKAD
Ties or agreements between customers with the bank which is called ijab and kabul in accordance with the will of the influential Law the burdensome objects, such as opening akad savings accounts or financial covenant.

SHARIA PRINCIPAL
The rules of Islamic law based on agreement between banks and customers for the storage of funds and or financing activities which is expressed in accordance with sharia.

DISTRIBUTION OF BAGI HASIL
Islamic banks profit sharing to customer savings based on the nisbah of agreed monthly. Bagi hasil depends on the amount and term deposits and bank earnings in the period. The amount of bagi hasil profit is calculated based on the bank income (revenue) so that the customers must obtain the results and do not lose their savings.

SHARIA SUPERVISORY COUNCIL
A council that has a charge to monitor compliance of the sharia principles’ application in the Islamic banking operational. It consists of ‘alim ulama who is chosen by National Sharia Council of Majelis Ulama Indonesia, and the approval of the Bank Indonesia.

MARGIN
The amount of benefits agreed between the bank and customers on financing transactions with akad jual beli (murabaha). Financing Margin are fixed did not change throughout financing period.

NISBAH
The portion of the bagi hasil between the customer and the bank on funding and financing transactions based on the akad of bagi hasil (mudaraba and musharaka).

BAI'AL MUTHLAQ
It is regular trading, the exchange of goods with money. Money serves as a media of exchange. Bai'al Mutlaq is done for the implementation of office goods’ (fixed assets) trading.

MUQAYYAD
It is buying and selling exchange which occurs between the goods with goods (barter). It is done as a way out for the export which can not generate foreign currency (forex).

SHARF
Buying and selling foreign currencies which are different from each other, such as the rupiah to dollar, dollar to yen; Sharf is done in the form of Bank Notes and transfers, using the exchange value which up to date at the time of the transaction.

MURABAHAH
Akad of selling and buying where prices and profits are agreed between the seller and buyer. Type and number of items are described in detail. Goods are
submitted after the akad of trading and the payment can be done in handed / mortgage or both.

SALAM
Sale by order, in which the buyer give money in advance for goods which the specifications have mentioned before, and then the goods sent later. Salam usually used for agricultural products in short-term. In this case the financial institution is functioned as buyers of products and gives the money first whereas the customers use it as a capital to manage the farm.

ISTISHNA'
Buying and selling goods in the form of reservations manufacture based on certain terms and criteria, while the pattern of payment can be done in accordance with the agreement (may be done at the beginning or at the time of delivery goods).

MUDHARABAH
Akad which is made between owners of capital (Shahibul mal) with managers (mudharib) where the nisbah of the bagi hasil is agreed in the beginning, while the losses will be the responsibility of the capital’s owner.

MUDHARABAH MUQAYYADAH
Akad which is made between capital’s owners to effort determined by the capital owners (Shahibul mal) with managers (mudarib), where the nisbah of the bagi hasil is agreed in the beginning to share with, while losses are borne by owners of capital. In the terminology of Islamic banking is called Special Investment.

MUSHARAKAH
It is akad between two or more owners of capital to unify their capital in certain business,
while the application can be appointed to one
of them. This akad is applied to a business which partly funded by financial institutions while the rest is financed by the customer.

WADI’AH
Wadi’ah is akad which is made between two parties where the first parties left an item to the second. Financial institutions apply this akad at clearing account.

WAKALAH
Wakalah is akad’s representative of one party to another. Wakalah usually applied to the making of Letter of Credit, for the purchase of goods abroad (L / C Import) or forwarding requests.

KAFALAH
Kafalah is akad’s guarantee of one party to another party. In the financial institutions are usually used for a guarantee for a project (performance bond), tender bond or advance payment bond.

RAHN
Rahn is akad’s mortgage goods from one party to the other hand with the money as the substitution. This akad is used as an additional akad for financing risk and needs additional guarantee. Financial institutions do not take any benefits unless the cost of maintenance or security goods.