SS 19 – Loan (Qard)

This standard aims to elaborate the rules of the Shari’ah for loan (Qard). Among these are the rules for a benefit (Manfa’ah) arising from a loan whether or not this is stipulated (in the contract), just as it includes the regulations of the Shari’ah that must be followed by Islamic financial institutions (Institution/Institutions). Likewise, the Standard includes the Shari’ah rules for some applications that the institutions need to implement, like current accounts, perquisites in return for loans, service charges for loans, and mutual overdrafts between the institution and its correspondents.

The word (Institution/Institutions) is used here to refer, in short, to Islamic financial institutions including Islamic Banks.

Scope of the Standard

This Standard covers loans and the accompanying benefits or costs irrespective of the institution being a lender or a borrower. The Standard does not cover what is not a loan (Qard), like the price in a credit sale and investment accounts, because they have standards a credit sale and investment accounts, because they have standards specific specific to them. 2. 2. Definition of Qard

Definition of Qard

Qard is the transfer of ownership in fungible wealth to a person on whom it is binding to return wealth similar to it. 3. Elements (Arkan) of a Loan (Qard) Contract and Its Conditions