Personal Finance Term
Shariah-Compliant
A financial product structured according to Islamic principles — prohibiting riba (interest), gharar (excessive uncertainty), and maysir (gambling). Returns are structured as profit-sharing, trade margins, or service fees instead.
In Malaysia, Shariah-compliant products are certified by the Shariah Advisory Council (SAC) of BNM or the Securities Commission. Common Shariah contracts include Mudarabah (profit-sharing), Musharakah (partnership), Wakalah (agency), Tawarruq (commodity murabahah — controversial in some schools), and Bai' Bithaman Ajil (deferred payment sale).
Malaysia has one of the most developed Islamic finance sectors globally — most major banks offer both conventional and Islamic products. Rates and terms are often comparable; the key difference is the underlying contract structure, not the economic outcome.