Glossary
Dayn
A debt: money you owe to somebody.
دينdayn
Dayn is a financial obligation owed by one party to another, whether it came from a loan or from a deferred sale price. The distinction matters because the rules attach to the debt, not to how it arose: a penalty for late payment of a dayn is riba whether the dayn came from a qard or from a murabahah. The OIC Fiqh Academy's Resolution 109 (3/12) makes exactly that point, prohibiting penalty clauses in debt contracts while permitting them in construction and supply contracts where the obligation is not a debt.
Related terms
RibaAny extra amount a lender gets back on top of what was lent, which Islamic law forbids.GharamahA fine for paying late, charged to make you pay on time rather than to cover a real loss.Ta'widhCompensation for money the bank actually lost because you paid late.MuqassahSet-off: cancelling what you owe against what you are owed, so only the difference is paid.HawalahTransferring a debt from one person to another, so a different person now owes it.
Sources
- IIFA Resolution No. 109 (3/12); AAOIFI Shariah Standard No. (3)