Question 1

AAOIFI SS (19) “Loan(Qard)” covers:

Accepted Answer

Loans and accompanying benefits/costs whether the institution is a lender or borrower

Answer

Loans only when the institution is the borrower

Answer

Investment accounts and credit-sale prices

Answer

Loans only when the institution is the lender

Question 2

The definition of Qard in SS (19) is:

Accepted Answer

Transfer of ownership in fungible wealth with an obligation to return a similar substitute

Answer

Sale on deferred payment with a markup

Answer

Transfer of ownership of non-fungibles with guarantee of the same item

Answer

Lease of an asset for rent and return of the same asset

Question 3

In Qard, the borrower becomes owner of the loaned amount through:

Accepted Answer

Possession, and becomes liable for repayment of a similar substitute

Answer

Mere promise (wa'd)

Answer

Profit distribution agreement

Answer

Registration with a notary only

Question 4

Stipulating any excess benefit for the lender in Qard is:

Accepted Answer

Prohibited and amounts to Riba, whether in quality/quantity or benefit

Answer

Permissible if small

Answer

Permissible if customary

Answer

Permissible if written into a separate document

Question 5

During the period of Qard, accepting a gift/benefit from the borrower is:

Accepted Answer

Not permissible if it is “for the sake of Qard,” unless a pre-existing practice existed before the loan

Answer

Required to encourage borrowers

Answer

Always permissible if the lender is a bank

Answer

Always permissible if not written

Question 6

Giving an excess at the time of repayment (without stipulation) is:

Accepted Answer

Permissible in quantity/ quality or benefit at repayment if not stipulated or customary

Answer

Not permissible in any case

Answer

Permissible only if the lender demanded it

Answer

Permissible only when Qard is in cash

Question 7

If a period (tenor)is stipulated in Qard, then:

Accepted Answer

Neither the borrower must repay before maturity nor the lender may demand before the end of the period

Answer

The loan converts into a sale

Answer

The borrower must repay immediately

Answer

The lender can demand repayment anytime

Question 8

It is _________ to stipulate a sale (Bay‘) or Ijarah (or other commutative contract) within a Qard contract:

Accepted Answer

Not permissible

Answer

Recommended

Answer

Permissible if both agree

Answer

Permissible only for corporate clients

Question 9

Service charges for Qard are:

Accepted Answer

Permissible up to actual direct costs only; any excess is prohibited

Answer

Permissible as a percentage of the loan amount

Answer

Permissible including staff salaries and general overheads

Answer

Not permissible at all

Question 10

In SS (19), current accounts are treated as:

Accepted Answer

Loans (Qurud) because the institution owns the funds and must repay a similar amount on demand

Answer

Salam advance payments

Answer

Mudarabah investment accounts

Answer

Wadi'ah (pure deposits)because the bank cannot use them

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