Institute of Islamic Banking and Insurance - Key Term

Glossary of Financial Terms - K

This glossary is not limited to Islamic terms and

contains Arabic and English terms that are also referred to

in the study of Islamic economics, banking and insurance.

A B C D E F G H I J K L M N O P Q R S T U W Z

Kafil	Guarantor.
Kast Al Takaful	Takaful contribution (premium).
Kafalah	Surety, An obligation in addition to an existing obligation in respect of a demand for something. Lit: responsibility or suretyship. It is a covenant or pledge given. Legally, a third party becomes surety for the payment of a debt of another. Suretyship in Shari’ah is the creation of an additional liability with regard to a claim, not to the debt or the assumption only of a liability and not of the debt. A person providing surety or a guarantor is known as Kafil. Islamic banks use Kafalah to issue guarantees for their business customers, for example, the bank may guarantee the customer’s standing to facilitate any business endeavours that may require such guarantees, or the bank may give a surety to the owner of a ship or the shipping agent, to discharge goods imported by a customer on arrival of the carrying ship, pending receipt of the original shipping documents before the customer can take delivery of the imported goods. Also, known as Kifalah.
Khalabah	Misleading marketing; pursuing unaware and simple clients by over-projecting the quality of a commodity.
Khayr	Good, beneficial or well-being.
Kharaj	A levy on land use.
Khatar	A kind of gharar. Khatar is involved if the liability of any of the parties to a contract is uncertain or contingent, delivery of one of the goods of exchange is not in the control of any party or the payment from one side is uncertain.
Khiyar	Lit: option, choice. The option to rescind or cancel a sales contract in certain conditions, for example a defect in the goods. The jurists have traditionally recognised different types of khiyar, including Khiyar alru-yah/roy'at, khiyar al-aib/ayb, khiyar al-shart, khiyar al-majlis.
Khiyar al-Aib/Ayb	An option of dissolving the contract on discovery of defect.
Khiyar al-Ghabn	An option of the buyer to cancel the contract on knowing that the seller has sold the goods at price far higher than the market price.
Khiyar-e-Majlis Khiyar al-Majlis	An option whereby the parties have right to withdraw from a contract so long as the parties do not leave the place of contract.
Khiyar al-Naqad	An option where the seller has the right to cancel the contract if the buyer does not make payment by a certain agreed date.
Khiyar al-Ro’yat	Option to rescind a sale contract after physical inspection of the object of sale.
Khiyar al-Shart	An option to cancel a previous agreed sale within a specific number of days.
Khiyar al-Wasf	An option to be exercised due to the absence of a desired quality in the goods.
Khiyar al-Tayin	An option of determination, where a person having purchased two or three things of the same kind, stipulates a period to make selection out of the purchased stock.
Kifala	See Kifalah
Kifalah	See Kafalah.
Koran	See Qur'an.

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