Earlier generations used the concept of Tawarruq as purpose of seeking silver money. Nowadays, the Tawarruq is a monetization process which includes two sale and purchase contracts. The first stage consists of selling an asset by a seller to a buyer on deferred basis. After that, the buyer will be selling the same asset to a third party on cash and spot basis. 

Commonly used for: KFH Sure Savings Account-i, KFH Libshara Account-i, KFH International Commodity Murabahah Deposit-i, KFH Murabahah Tawarruq Working Capital Financing-i, KFH Murabahah Tawarruq Asset Acquisition Financing-i.

Ijarah means leasing of an asset pursuant to a contract under which a specified permissible benefit in the form of a usufruct is obtained for a specified period in return for a specified consideration. It is a Manfa‘ah (usufruct) type of contract whereby a lessor (owner) leases out an asset to its customer at an agreed rental fee and pre-determined lease period upon the contract. The ownership of the leased equipment remains in the hands of the lessor.

For Islamic banking products, they are commonly associated with a promise by the lessor to transfer ownership at the end of the Ijarah period via a separate sale agreement or gift.

Commonly used for: KFH Auto Ijarah-i, KFH Ijarah Muntahiah Bi Tamlik Asset Acquisition Financing-i, KFH Ijarah Muntahiah Bi Tamlik Asset Backed Financing-i.

Ijarah Mausufah Fi Zimmah means an ijarah contract which is executed for an asset undertaken by the lessor to be delivered to the lessee according to accurate specifications, even if the asset is not owned by the lessor. During the period that the leased asset/property is under construction, the lessor may ask the lessee to pay a certain portion of pre agreed lease rental as a forward lease. The forward lease rental payment will be considered as a debt to the lessor until the delivery of the leased asset to the lessee.

Commonly used for: KFH Ijarah Home Financing-i, KFH Ijarah Mausufah Fi Zimmah Asset Acquisition Financing-i.

Wakalah is a contract of agency which gives the power to a person to nominate another person to act on his behalf based on the agreed terms and conditions.

Commonly used for: KFH Wakalah Letter of Credit-i.

The Shariah principle of guarantee whereby the bank will guarantee the performance, action and undertaking of a customer to a 3rd party. The guarantor will underwrite any claim and obligation that should be fulfilled by the principal. This concept is also applicable to a guarantee provided on a debt transaction in the event a debtor fails to fulfil the debt obligation.

Commonly used for: KFH Kafalah Bank Guarantee-i, KFH Kafalah Shipping Guarantee-i.

Qardh means non-interest bearing loan which refers to a loan given by a person (lender) to the borrower without any expectation of extra returns. The borrower is only obliged to pay the loan at its original amount to the lender within the agreed stipulated period of time.

Commonly used for: KFH Current Account-i, KFH Savings Account-i, KFH Foreign Currency Current Account-i.

Mudharabah means partnership in profit whereby one party provides capital (rabb al-mal) and the other party acts as an entrepreneur (mudharib) who manages the venture. If the venture is profitable, the profit will be distributed based on a pre-agreed ratio. In the event of a business loss, the financial loss shall be borne by the provider of the capital unless it is due to the misconduct or negligence of the mudharib.

Commonly used for: KFH Mudharabah Plus Account-i.