Maqasid al-Shariah refers to the 'Objectives of Sharia.' In finance, it encourages a move beyond mere 'form-compliance' to 'substance-compliance,' focusing on justice, poverty alleviation, and preventing the concentration of wealth.

Bai al-Inah involves a person selling an asset to another for cash and immediately buying it back at a higher price on a deferred basis. This generates cash for the original seller, but since the asset never really changes hands permanently, most scholars consider it a 'riddled' loan with interest.

Kafalah is a contract where a party (the guarantor) agrees to assume the liability of another (the debtor) in case of default. It is the basis for bank guarantees and letters of credit in Islamic trade finance.

Unlike Murabaha, where the seller must disclose the original cost and the profit margin, Musawamah is a general sale where the price is negotiated between the buyer and seller without reference to the cost or profit.

Hibah is a gift. In Islamic banking, it is often used when a bank provides a discretionary gift to its Wadiah (safekeeping) account holders, as the bank cannot legally guarantee a fixed return on such accounts.

In Tier 1, the bank is the Mudarib (manager) and the depositors are the Rab-ul-Maal (investors). In Tier 2, the bank becomes the Rab-ul-Maal and provides funds to entrepreneurs (Mudarib). This allows the bank to function as a profit-sharing intermediary.

Hawalah is a system of transferring debt or credit. It allows a debtor to transfer their obligation to pay to another party who owes them money. This was an early form of bill of exchange and is still used for international remittances in some regions.

Juala is a contract for a reward or commission. One party promises to pay a specified amount to whoever performs a particular task (e.g., finding lost property or recovering a debt). It is used for service-based banking products.

This is a fundamental legal maxim in Islamic jurisprudence. It states that the entitlement to the 'output' or profit of an asset is linked to the responsibility for its 'liability' or risk. This is why interest is prohibited—it seeks profit without bearing the risk of the underlying business.

Bai al-Sarf is the exchange of money for money (e.g., USD for PKR). To be valid and avoid riba, the exchange of gold, silver, or currencies must happen simultaneously (hand-to-hand) and at the spot rate if the currencies differ.