Islamic Banking Glossary, SBP

Sunnah custom habit or way of life technically it

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Sunnah ( ): Custom, habit or way of life. Technically, it refers to the utterances of the Prophet Muhammad (PBUH) other than the Holy Quran known as Hadith, or his personal acts, or sayings of others, tacitly approved by the Prophet. Tabarru’ ( ): It is a donation/gift the purpose of which is nit commercial but is seeking the pleasure of Allah. Any benefit that is given by a person to other without getting anything in exchange is called Tabarru’. Gracious repayment of debt, absolutely at lender’s own discretion and without any prior condition or inducement for reward, is also covered under Tabarru’. Repaying a loan in excess of principal and without a pre-condition is commendable and compatible with the Sunnah of the Holy Prophet (peace be upon him). But, it is matter of individual discretion and cannot be adopted as a system because this would mean that loan would necessarily yield a profit. If such reward takes the form of a system, it would be considered Riba. Tabzir ( ): Spending wastefully on objects which have been explicitly prohibited by the Shariah irrespective of the quantum of expenditure. See also Israf. Ujrah ( ): See Jua alah. Wakalah ( ): A contract of agency in which one person appoints someone else to perform a certain task on his behalf, usually against a certain fee. ************************************ (Source: SBP Publication, ‘Islamic Banking and Finance: Theory and Practice’ by Muhammad Ayub, Sr. J.D. IBD, SBP)
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