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This fatwa acknowledges that the sale-purchase of items by placing an order and pre-paying for those items, pursuant to certain conditions (known as salam), now involves banks. In order that these types of transactions are shari'a-compliant, the fatwa acknowledges the need for a set of guidelines for shari'a financial institutions.

The fatwa mandates a set of conditions for the purchase of an item, the quality therein, as well as the need for the specifications of the item to be clear, and how the purchaser may deal with the item prior to reaching and agreement with the vendor, as well as prior to receipt of the item.

This fatwa defines an istishna' agreement as a sale-purchase agreement whereby the purchaser (mustashni') places an order with the vendor (shani') to have a certain item made pursuant to certain criteria and conditions agreed upon by both parties. The fatwa also acknowledges that shari'a financial institutions are already implementing istishna' agreements, and that the Board believes a set of guidelines is necessary to ensure that such agreements are implemented in a shari'a-compliant manner.

Among other guidelines, the fatwa states that the quantity, form, specifications, and any other relevant information pertaining to the item must be clear, and that it may not be in the form of discharging a debt.

This fatwa acknowledges the need for business investment, often via musyarakah financing, viz. financing based on joint ventures between two or more parties for a certain business, where each party provides a financial contribution on the condition that profit and risk are shared equally, pursuant to the agreement in place. The fatwa also acknowledges that shari'a financial institutions are already implementing musyarakah financing agreements, and that the Board believes a set of guidelines is necessary to ensure that such agreements are implemented in a shari'a-compliant manner.

More specifically, among other requirements, the fatwa dictates that statements of consent and accedence must be made by all parties to show their willingness to be a party to an agreement, ensuring offer and acceptance is explicit, and that it is carried out at the time the agreement is executed. Moreover, all parties must have legal standing (cakap hukum), they must participate and contribute, however, their contributions need not be of the same magnitude.

This fatwa acknowledges that parties may need to implement a wakalah agreement, viz. devolve authority to another party in matters where proxies are permissible. Moreover, it acknowledges that this practice is offered by shari'a financial institutions as a banking service for customers, and that to ensure shari'a-compliance, shari'a financial institutions require a set of guidelines.

More specifically, among other requirements, the fatwa dictates that statements of consent and accedence must be made by all parties to show their willingness to be a party to an agreement, and that a wakalah agreement may not be terminated unilaterally.

This fatwa acknowledges that persons conducting a business enterprise often require insurance from another party via a kafalah agreement, viz. a gurantee provided by an insurer (kafiil) to a third party to fulfil the obligations of a second party or an insured. To meet these needs, shari'a financial institutions are obligated to make available an insurance (kafalah) scheme based on shari'a principles. The fatwa asserts that to ensure shari'a-compliance, shari'a financial institutions require a set of guidelines pursuant to which they can implement kafalah agreements.

More specifically, among other requirements, the fatwa dictates that:

1. statements of consent and accedence must be made by all parties to show their willingness to be a party to an agreement;
2. insurers may accept nominal fees; and
3. kafalah agreements for a fee are binding and may not be terminated unilaterally.

This fatwa acknowledges that some persons not able to repay debts directly may opt to transfer those debts to a third party via a hawalah agreement. The fatwa notes that shari'a financial institutions are already implementing such agreements and, therefore, would benefit from a set of guidlines to ensure their implementation is shari'a-compliant.

More specifically, the fatwa mandates that a hawalah agreement be between a muhil (party who is in debt and owed), muhal/muhtal (owed by the muhil), and muhal 'alaih (in debt to the muhil and indebted to the muhal), and that the agreement show clearly each party's willingness to be a party to the agreement.

This fatwa sets out the key requirements of murabahah banking practices. Among other points, it acknowledges the utility of sale-purchase (murabahah) principles, prohibits interest-bearing practices (riba), encourages transparency and full-disclosure from shari'a financial institutions, and encourages customer accountability vis-a-vis ensuing repayments to shari'a financial institutions.

This decree defines Musyarakah Mutanaqishah financing as a financing facility based on the principles of musyarakah, that is, a joint venture where the shari'a financial institution's capital is reduced as a result of making incremental commercial transfers to the customer. It notes that the special characteristics of Musyarakah Mutanaqishah are that:

1. enterprise capital of both parties (shari'a financial institution and customer) is stipulated in portions;
2. enterprise capital already stipulated may not be reduced for the term of the agreement;
3. the shari'a financial institution agrees to transfer all portions in a commercial and incremental fashion to the customer;
4. deposits made by the customer to the shari'a financial institution that are of the same value as portion units are to be treated as commercial portion unit transfers, while deposits that exceed that value are profits that become the property of the shari'a financial institution.

The decree also acknowledges that the purpose of Musyarakah Mutanaqishah financing is to provide a financing facility to individual and corporate clients to increase their capital and/or assets based on a profit-sharing model.

This fatwa defines Musyarakah Mutanaqisah as a financial arrangement whereby one party's ownership of assets or capital is reduced as a result of the other party purchasing them in increments, and an arrangement that comprises a Musyarakah (sale-purchase) agreement. More specifically, a Musyarakah Mutanaqisah agreement involves one party (the shari'a financial institution) promising to sell all their portions (hishshah) incrementally to the other party (customer), who is obligated to purchase them.

This fatwa defines a deposit certificate as a deposit accompanied by a certificate as proof of ownership that can be transferred in accordance with current legislation. It also defines a shari'a deposit certificate as a deposit certificate that accords with shari'a principles. The fatwa specifies that a shari'a deposit certificate can be executed via a Mudharabah agreement issued by a shari'a financial institution.

This fatwa concerns shari'a guarantees, and defines a shari'a guarantee as a guarantee between parties based on shari'a principles. The fatwa specifies that a contract that can be used as a shari'a guarantee is a Kafalah bil ujrah, the provisions of which include:

1. the object of the contract can, in whole or in part, be a financial obligation that emerges from a shari'a transaction, or anything else guaranteed, based on shari'a principles;
2. statement of consent and acceptance must be enunciated by the parties to show their intention to enter into a contract;
3. the contract fee must be stipulated in the contract, and agreed to by the parties; and
4. a Kafalah bil ujrah is binding and cannot be terminated unilaterally.

This fatwa acknowledges that one of the basic principles of a murabahah agreement is the sale of an item to a purchaser at a purchase price and cost that incurs an additional agreed-upon profit for the vendor. The fatwa notes that a vendor (shari'a financial institute) will sometimes obtain a discount from the supplier, and that that discount can be problematic insofar as it is unclear whether or not it is the right of the shari'a financial institute to sell the item to the customer at the pre-discount or post-discount price.

The fatwa clarifies that if the shari'a financial institute obtains a discount from the relevnat supplier, the actual price is the price after the discount has been factored in, rendering the discount the right of the customer. If, however, the discount is obtained after the parties have reached an agreement, the terms of the agreement stand.

This fatwa acknowledges that shari'a financial institutes, aside from being commercial institutes, must also play a social role to stimulate the economy. The fatwa notes that this can be achieved by channelling funds pursuant to the principle of al-Qardh, whereby a loan agreement is executed in the customer's favour on the condition that the customer returns the principal sum to the shari'a financial institute at a time agreed on by both parties. The fatwa states that such an agreement is permitted if:

1. the customer bears the associated administrative costs;
2. the shari'a financial institute requests from the customer a security if deemed necessary;
3. the customer wishes to voluntarily provide to the shari'a financial institute a donation, provided it is not a condition of the agreement; and
4. if the customer is unable to return a part or all the funds at the time agreed upon and the shari'a financial institute has already determined the customer's impecuniosity with certainty, the institute can either extend the term of the agreement or write-off the debt in part or in its entirety.

If the customer shows no signs of repaying the principal sum, the shari'a financial institute may take a number of steps including selling the security and/or enforcing the customer's contractual obligations.

This fatwa acknowledges that a banking service that has become a necessity in society is the safe deposit box and that, therefore, shari'a banks need to make safe deposit boxes available. The fatwa declares that safe deposit boxes are to be underpinned by ijarah (rental) agreements and that items stored in safe deposit boxes are to be non-haram items of value that are not prohibited by the state. Rental costs are to be stipulated based on an agreement between the shari'a financial institute and customer, and the rights and obligations of the shari'a financial institute and customer may be based on such an agreement provided they do not contravene ijarah conditions.

This fatwa permits gold to be used as collateral to secure a mortgage. The price of the gold and the storage fees associated are to be borne by the mortgagee (owner of the gold). The storage costs are to be agreed to pursuant to an ijarah agreement.

This fatwa declares that damages (ta'widh) are only payable by a party that intentionally or because of their own negligence repudiates the terms of the agreement and results in the other party incurring actual financial loss.

This fatwa defines a 'line facility' as a rolling financial ceiling for a fixed term executed in accordance with shari'a principles. It permits a line facility to be executed based on an agreement between a shari'a financial institute and a customer (wa'd) for certain financial instruments (murabahah, istishna', mudharabah, musyarakah and ijarah) in accordance with shari'a principles. The shari'a financial institute's fee or profit may only stem from the yield of the line facility itself.

This fatwa defines a 'shari'a charge card' as an advanced-payment card facility used by the card-holder as a mode of making a payment or withdrawing cash, which must then be repaid to the financier (mushdir al-bithaqah) before a specified time. The fatwa stipulates the following provisions and limitations for shari'a charge cards:

1. must be interest-free;
2. may not be used to facilitate forbidden (haram) or immoral (maksiat) transactions;
3. may not be used to encourage excessive spending (israf);
4. may not result in a debt that cannot be repaid (ghalabah al-dayn); and
5. the primary card-holder must have the financial capacity to repay the value of the card within the specified term.

The fatwa also permits a card-issuer to charge the user a membership fee (rusum al-'udhwiyah), as well as a merchant fee (ujrah) and cash withdrawal fee (rusum sahb al-nuqud).

This fatwa defines a 'shari'a card' as a card with a similar function to a credit card, which establishes a legal relationship between the card-issuer, card-holder and card-recipient, based on shari'a principles. It permits the usage of a shari'a card provided:

1. the card is not interest-bearing;
2. the card is not used for shari'a-non-compliant transactions;
3. the card does not encourage excessive spending (israf);
4. the primary card-holder has the financial capacity to repay the value of the card within the specified term; and
5. the card does not provide a facility that is contrary to shari'a.

The fatwa also permits a card-issuer to charge the user a membership fee (rusum al-'udhwiyah), as well as a merchant fee (ujrah), cash withdrawal fee (rusum sahb al-nuqud), and guarantee fee (kafalah). The card-issuer is also entitled to damages (ta'widh) or a late fee if the card-user is late in making repayments.

This fatwa permits the execution of ju'alah agreements. It defines a ju'alah as a promise or commitment to provide a specified dividend if a particular job or work is completed and the intended outcome is achieved.