Islamic Finance Law from A-Z
Ra's al-mal
Capital. The money or property which an investor (rabb al-mal) invests in a profit-seeking venture, often in a partnership (musharakah) such as a mudarabah or shirkah arrangement.
Rabb al-mal
The person who invests the capital in a Mudarabah /Shirkah contract.
Rahn
Pledge, collateral; legally, Rahn means to pledge or lodge a real or corporeal property of material value as security for a debt or pecuniary obligation, so as to make it possible for the creditor to recover the debt, in the case of nonpayment, by selling the pledged property.
Riba
(lit. increase) any increase in a loan or sale transaction which accrues to the lender, seller or buyer, without the provision of an equivalent counter-value to the other party. In Islam, riba is one of the most abhorrent of all sins and is absolutely prohibited. Riba encompasses various types of illict gain, of which banking interest is one example.
Riba al-fadl
The quality premium in exchange of low quality with better quality goods, e.g. dates for dates, wheat for wheat, etc. – an excess in the exchange of Ribawi goods in the case of a single genus on both sides. The concept of Riba Al-Fadl refers to exchange/sale transactions.
Riba al-nasiah
Riba of delay, due to exchange not being immediate with or without excess in one of the counter values. It is an increment on the principal of a loan or debt payable. It refers to loan/credit transactions or lending money on the understanding that the borrower will return to the lender at the end of the period the amount originally lent together with an increase on it, in consideration of the lender having granted him time to pay. Interest, in all modern banking transactions, falls under the purview of Riba Al-Nasiah.
Rishwah
Bribery.
rukn (pl. arkan)
(lit. pillar) In ‘fiqh’, an integral part of an act, such as a transaction, without which the act cannot be said to have been performed.
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