Wadiah involves a person depositing funds with an Islamic bank for safekeeping, and the bank acts as a custodian. The bank is responsible for preserving the funds and may provide a return as a gesture of gratitude (hibah), but the depositor is not guaranteed a profit, as the primary intent is to safeguard the deposited amount.
Hawala (International Fund Transfer System)
Hawala is an informal and traditional method of transferring funds across borders without physically moving money. It relies on a network of brokers or agents who facilitate the transfer based on trust, making it a system widely used in Islamic finance for international remittances.
Takaful (Islamic Insurance)
Takaful is an Islamic insurance concept that emphasizes mutual cooperation and shared responsibility among participants. In Takaful, policyholders contribute to a common fund to provide mutual financial support and indemnify any member who suffers a loss, ensuring that the principles of cooperation and solidarity govern the insurance arrangement.
Sukuk (Islamic Bonds)
Sukuk are Islamic bonds structured to comply with Sharia principles. Instead of earning interest, Sukuk holders receive a share of profits generated by the underlying asset. Sukuk represent ownership in a tangible asset, project, or investment, making them a form of ethical investment in Islamic finance.
Wakala (Agency)
Wakala is a form of contract in Islamic finance where one party, acting as an agent, manages the financial affairs of another party. In the context of investment or fund management, the Wakala contract allows an individual or institution to act as an agent to manage and invest funds on behalf of the principal, earning a fee or commission for their services.
