SEVERAL TERMS IN ISLAMIC BANK

MURABAHAH
It is a financing facility using trading system. Bank will buy any halal goods that you need and then sell them to you to be paid periodically / installments according to your ability. This facility can be used to deal with your business needs (either working capital or investment: procurement of capital goods such as machinery, equipment, etc.) or private needs (e.g. purchase of motor vehicles, homes, etc.).


Istishna'
It is a sale and purchase contract, in which a customer orders manufacturer to produce certain goods. Since the ordered objects must confirm to a strict specification, the Istishna' transaction is similar to Salam. The only difference is that in Istishna' transaction, the payment can be made either in advance, at the middle or end of order completion
Salam
It is an agreement to purchase goods / assets, which will be delivered in the future, whereas the payment is in cash and made in advance. Usually used for agriculture financing
MUDHARABAH
It is a financing Facility where the capital / funds was provided by Bank for customer to be used for an agreed business. Later, in this financing, you and the Bank agreed to share profits resulted by the business. Risk of losses is fully taken by the Bank except for losses caused by management errors, negligence and deviations from customer's side like corruption, dishonesty and abuse.
Types of business which can be financed are trade, industry / manufacturing, business on a contract basis, and others in the forms of working capital and investment.
MUSYARAKAH
Musyarakah financing is a partnership carried out between customer and Bank Muamalat in a business where each party give contribution in amount of fund (donation/expertise) and thus sharing the profits and risks.
Types of business which can be financed are trade, industry / manufacturing, business on a contract basis, and others in the forms of working capital and investment.
IJARAH
A contract between the Bank (Mu'ajjir) and a Customer (Musta'jir), in which the Musta'jir agrees to rent a Bank's asset and to pay the fee for the rented asset.