Member Login

  • 13th Annual General Meeting of the Association held on 05th October 2023, Office Bearers (Mr. Mahfuz-ur Rehman Pasha, Chairman, Mr. Shuja Malik, Senior Vice Chairman and Mr. Irfan Ahmed, Vice Chairman) will continue to be the Office Bearers till 30-09-2024.
  • Mr. Mahfuz-ur Rehman Pasha has been elected Chairman for the Year 2022-23 where as Mr. Shuja Malik and Mr. Irfan Ahmed has been elected Senior Vice Chairman and Vice Chairman of NBFI & Modaraba Association of Pakistan respectively as per Election Results announced in the 12th AGM held on September 2022
  • The Association Launched Year Book 2021 on 14th July 2022 through zoom video link as well as physically at the Association's Secretariat, Karachi. Mr. Aamir Khan, Chairman, SECP was the Chief Guest. Ms. Farrukh H. Sabzwari, Commissioner, Ms. Sadia Khan, Commissioner, SECP, Mr. Tariq Naseem, Registrar Modaraba, SECP, Ms. Khalida Habib, Executive Director and other senior members of the SECP. Chief Executives of Modarabas, Leasing Companies, Investment Finance Services and senior officials from other financial entities also participated. The year Book was presented to the Chief Guest by Ms. Khalida Habib and Mr. Tariq Naseem on behalf of the Association as the ceremony was arranged on zoom video link.

Gharar: It means any element of uncertainty in any business or contract about the subject of contractor its price, or mere speculative risk. It leads to undue loss to a party and unjustified enrichment of other, which is prohibited.

Hawalah: Literally, it means transfer; legally, it is an agreement by which a debtor is freed from a debt by another becoming responsible for it, or the transfer of a claim of a debt by shifting the responsibility from one person to another – contract of assignment of debt. It also refers to the document by which the transfer takes place.

Hibah: Hibah means Gift.

Ijarah: Letting on lease; Sale of a definite usufruct of any asset in exchange of definite reward. It refers to a contract of land leased at a fixed rent payable in cash and also to a mode of financing adopted by Islamic banks. It is an arrangement under which the Islamic banks lease equipments, buildings or other facilities to a client, against an agreed rental.

Ijarah-wal-Iqtina: A mode of financing adopted by Islamic banks. It is a contract under which the Islamic bank finances equipment, building or other facilities for the client against an agreed rental together with a unilateral undertaking by the bank or the client that at the end of the lease period, the ownership in the asset would be transferred to the lessee. The undertaking or the promise does not become an integral part of the lease contract to make it conditional. The rental as well as the purchase price are fixed in such a manner that the bank gets back its principal sum along with some profit, which is usually determined in advance.

Inah (A kind of Bai): Double sale by which the borrower and the lender sell and then resell an object between them, once for cash and once for a higher price on credit.

Istisna'a: It is a contractual agreement for manufacturing goods and commodities, allowing cash payment in advance and future delivery or a future payment and future delivery. Istisna'a can be used for providing the facility of financing the manufacture or construction of houses, plants, projects, and building of bridges, roads and highways.

Maisir: An ancient Arabian game of chance played with arrows without heads and feathering, for stakes of slaughtered and quartered camels. It came to be identified with all types of hazard and gambling.

Mudarabah: A form of partnership where one party provides the funds while the other provides expertise and management. The former is called Rabul Maal and the latter is referred to as the Mudarib. Any profits accrued are shared between the two parties on a pre-agreed basis, while loss is borne by the provider of the capital.

Mudarabah:A form of partnership where one party provides the funds while the other provides expertise and management. The former is called Rabul Maal and the latter is referred to as the Mudarib. Any profits accrued are shared between the two parties on a pre-agreed basis, while loss is borne by the provider of the capital.

Murabaha: Literally it means a sale on mutually agreed profit. Technically, it is a contract of sale in which the seller declares his cost and profit. This has been adopted by Islamic banks as a mode of financing. 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.

Musawamah: Musawamah is a general kind of sale in which price of the commodity to be traded is bargained between seller and the purchaser without any reference to the price paid or cost incurred by the former.

Musharakah: Musharakah means a relationship established under a contract by the mutual consent of the parties for sharing of profits and losses in the joint business. It is an agreement under which the Islamic bank provides funds which are mixed with the funds of the business enterprise and others. All providers of capital are entitled to participate in management, but not necessarily required to do so. The profit is distributed among the partners in pre-agreed ratios, while the loss is borne by each partner strictly in proportion to respective capital contributions.

Qard: Legally Al-Qard means lending of a fungible object, such as money, by someone to another person, on condition that the borrower is responsible to return the same object at any specified time. Loaning in Islam is a voluntary and gratuitous act and cannot carry any return over the loan given. The repayment of loan is obligatory. The Holy Prophet (PBUH) is reported to have said "…..Every loan must be paid……". But if a debtor is in difficulty, the creditor is expected to extend time or even to voluntarily remit the whole or a part of the principal.

Qimar: Qimar means gambling. Technically, it is an arrangement in which possession of a property is contingent upon the happening of an uncertain event. By implication it applies to a situation in which there is a loss for one party and a gain for the other without specifying which party will lose and which will gain.

Riba: An excess or increase. Technically, it means an increase over principal in a loan transaction or in exchange for a commodity accrued to the owner (lender) without giving an equivalent countervalue or recompense ('iwad) in return to the other party; every increase which is without an 'iwad or equal counter-value.

Riba Al-Fadl: Riba Al-Fadl (excess) is 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 within a single genus. The Concept of Riba Al-Fadl refers to sale transactions while Riba Al-Nasiah refers to loan transactions.

Riba Al-Nasiah: Riba Al-Nasiah or riba of delay is due to exchange not being immediate with or without excess on one of the counter values. It is an increment on principal of a loan or debt payable. It refers to the practice of lending money for any length of time on the understanding that the borrower would 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 purview of Riba Al-Nasiah. As money in present banking system is exchanged for money with excess and delay, it falls, under the definition of riba. A general accord reached among scholars about its prohibition.

Al- Rahn: Pledge, Collateral; legally, Rahn means to pledge or lodge a real or corporeal property of material value, in accordance with the law, as security, for a debt or pecuniary obligation so as to make it possible for the creditor to recover the debt or some portion of the goods or property.

Shariah: The term Shariah refers to divine guidance as given by the Holy Qur'an and the Sunnah of the Prophet Muhammad (PBUH) and embodies all aspects of the Islamic faith, including beliefs and practice.

Shirkah: A contract between two or more persons who launch a business or financial enterprise to make profits. In the conventional books of Fiqh, the partnership business has been discussed under the option of Shirkah that, broadly, may include both Musharakah and Mudarabah.

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 (PBUH).

Salam: Salam means a contract in which advance payment is made for goods to be delivered later on. The seller undertakes to supply some specific goods to the buyer at a future date in exchange of an advance price fully paid at the time of contract. According to normal rules of the Shariah, no sale can be effected unless the goods are in existence at the time of the bargain, but Salam sale forms an exception given by the Holy Prophet (SAW) himself to the general rule provided the goods are defined and the date of delivery is fixed. It is necessary that the quality of the commodity intended to be purchased is fully specified leaving no ambiguity leading to dispute. The objects of this sale are goods and cannot be gold, silver or currencies because these are regarded as monetary values exchange of which is covered under rules of Bai al Sarf. Barring this, Salam covers almost everything which is capable of being definitely described as to quantity, quality and workmanship.

Sukuk: Plural of 'Sakk', which refers to a financial paper showing entitlement of the holder to the amount of money shown on it. The English word "cheque" has been derived from it. Technically, Sukuk are financial instruments entitling their holders to some financial claims.

Takaful: An equivalent to the contemporary insurance contract whereby a group of persons agree to share a certain risk (for example, damage by fire) by collecting a specified sum from each. In case of loss to any one of the group, the loss is met from the collected funds.

Tabarru: 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.

Wakalah: A contract of agency.