AAOIFI Standards in Simple English
All 62 Shariah Standards, summarized so anyone can understand them. AAOIFI — the Accounting and Auditing Organization for Islamic Financial Institutions — writes the global rulebook for Islamic finance. Each summary explains one standard in plain language: what it is about, why it exists, its key rules, and an everyday example.
Scope notes. SS 61 (Payment Cards) replaces SS 2, and SS 60 (Waqf) replaces SS 33 — both versions are kept and the replacement is noted. SS 62 (Sukuk) is an exposure draft, not a final standard. Summaries are for learning, not legal rulings — an institution's Shariah board decides real cases. Full sources are cited in each summary. Developers: the whole knowledge base ships as a Python package (aaoifi-educational-kb) you can pip-install and query.
Intellectual property. The AAOIFI Shariah Standards are the intellectual property of AAOIFI. These summaries are independent paraphrases written for education — not published by, affiliated with, or endorsed by AAOIFI. Nothing here reproduces AAOIFI's standard texts; readers who need the authoritative wording should consult AAOIFI's official publications (https://aaoifi.com). Non-commercial use. This knowledge base is shared under CC BY-NC 4.0 for learning, teaching, and research with attribution. Commercial use — including business development, paid products, or paid services built on this material — is not permitted.
SS 1
Trading in Currencies
Sets the Shariah rules for exchanging one currency for another.
SS 2
Debit Card, Charge Card and Credit Card
Superseded by SS 61. This file is kept as a historical pointer only.
SS 3
Procrastinating Debtor
Forbids charging extra money when a debtor pays late, and sets what creditors may do instead.
SS 4
Settlement of Debts by Set-Off
Two ways people who owe each other can cancel out their debts: by agreement, or automatically when the conditions are met.
SS 5
Guarantees
Sets the Shariah rules for guarantees that protect debts against delay and default.
SS 6
Conversion of a Conventional Bank to an Islamic Bank
Lays out how a conventional bank converts into a fully Shariah-compliant bank.
SS 7
Hawalah
Sets the Shariah rules for transferring a debt from one debtor to another.
SS 8
Murabaha to the Purchase Orderer
Sets the Shariah rules for the bank's most-used financing: buy an asset, then resell it to the customer at a disclosed markup.
SS 9
Ijarah and Ijarah Muntahia Bittamleek
Sets the Shariah rules for Islamic leasing, including leases that end with the customer owning the asset.
SS 10
Salam and Parallel Salam
Sets the Shariah rules for paying in full now for goods to be delivered later.
SS 11
Istisna'a and Parallel Istisna'a
Sets the Shariah rules for ordering something to be manufactured or built for future delivery.
SS 12
Sharikah (Musharaka) and Modern Corporations
Sets the Shariah rules for partnerships — including modern companies and diminishing partnerships.
SS 13
Mudaraba
Sets the Shariah rules for trustee partnerships: one side provides the money, the other provides the work.
SS 14
Documentary Credit
Sets the Shariah rules for letters of credit used in trade.
SS 15
Ju'ala
Sets the Shariah rules for reward-for-result contracts, where the work itself cannot be precisely defined.
SS 16
Commercial Papers
Sets the Shariah rules for dealing in cheques, bills of exchange, and promissory notes.
SS 17
Investment Sukuk
Sets the rules for sukuk — investment certificates that give holders ownership shares in real assets, projects, or services instead of paying interest.
SS 18
Possession (Qabd)
Defines what counts as taking possession of something in a contract, including modern forms like holding the title documents.
SS 19
Loan (Qard)
Sets the rules for loans, chiefly that no extra benefit may be demanded from the borrower, since that would be riba (interest).
SS 20
Sale of Commodities in Organised Markets
Rules out futures, options, and similar speculative derivatives on organized exchanges, allowing only genuine trade in real commodities.
SS 21
Financial Paper (Shares and Bonds)
Shariah rules for buying, holding and trading shares and bonds.
SS 22
Concession Contracts
Rules for long-term deals where a company builds and runs a project, then hands it back — like a toll highway.
SS 23
Agency and the Act of an Uncommissioned Agent (Fodooli)
Shariah rules for agency contracts and for acts done by someone who intervenes without being appointed.
SS 24
Syndicated Financing
Shariah rules for large financing provided jointly by a group of financial institutions.
SS 25
Combination of Contracts
Sets the rules for building one deal out of two or more contracts while keeping the whole structure compliant with Islamic law.
SS 26
Islamic Insurance
Defines Islamic insurance (takaful) as donation-based mutual protection and sets the controls Islamic financial institutions must follow when offering it.
SS 27
Indices
Sets the rules for building Shariah-compliant stock market indices and forbids buying or selling the index itself, which counts as gambling.
SS 28
Banking Services in Islamic Banks
States that Islamic banks may offer everyday banking services and charge fees for them, as long as the services do not involve interest-based lending.
SS 29
Stipulations and Ethics of Fatwa in the Institutional Framework
Rules for how Islamic banks obtain religious rulings from their Shariah scholars, and the ethics those scholars must follow when issuing them.
SS 30
Monetization (Tawarruq)
Strict conditions for tawarruq, a way of raising cash by buying a commodity on credit and selling it to a third party.
SS 31
Controls on Gharar in Financial Transactions
Defines gharar (excessive uncertainty): which kinds of uncertainty break a contract and which kinds do not.
SS 32
Arbitration
How arbitration works for Islamic financial institutions: what can be arbitrated, who may serve as arbitrator, and how the verdict is issued and enforced.
SS 33
Waqf
Superseded by SS 60. This file is kept as a historical pointer only.
SS 34
Hiring of Persons
Rules for hiring people — employment and service contracts — under Islamic law.
SS 35
Zakah
How Islamic banks and companies calculate and pay zakah on their wealth.
SS 36
Impact of Contingent Incidents on Commitments
What happens to a contract when an unexpected disaster or event outside anyone's control disrupts it.
SS 37
Credit Agreement
Rules for credit agreements between Islamic banks and their clients, including master agreements for future deals.
SS 38
Online Financial Dealings
Rules for making Islamic financial contracts over the internet and other online channels.
SS 39
Mortgage and its Contemporary Applications
Rules for mortgages — pledging an asset to secure a debt — and how they work in modern Islamic banking.
SS 40
Distribution of Profit in Mudarabah-based Investment Accounts
Rules for how Islamic banks share profits with the holders of mudarabah-based investment accounts.
SS 41
Islamic Reinsurance
Rules for retakaful — Islamic reinsurance, where takaful companies share large risks with each other.
SS 42
Financial Rights and How They Are Exercised and Transferred
The different kinds of financial rights — like ownership, usage rights, and easements — and how each may be used or passed on.
SS 43
Insolvency
Islamic rules for when a debtor cannot pay — how insolvency is declared and how creditors are treated.
SS 44
Obtaining and Deploying Liquidity
The Shariah-compliant ways Islamic banks can raise cash when short and put spare cash to work.
SS 45
Protection of Capital and Investments
Which methods of protecting invested capital are allowed in Islamic partnerships — and which are not.
SS 46
Al-Wakalah Bi Al-Istithmar (Investment Agency)
Rules for investment agency — where you appoint someone to invest your money for a fee.
SS 47
Rules for Calculating Profit in Financial Transactions
Rules for how Islamic banks calculate, present, and disclose profit in their financing and investment deals.
SS 48
Options to Terminate Due to Breach of Trust (Trust-Based Options)
Gives a buyer the right to cancel a purchase when the seller lied, hid the truth, or charged far too much.
SS 49
Unilateral and Bilateral Promise
When a promise to do a deal in the future is only a moral duty and when a court can enforce it.
SS 50
Irrigation Partnership (Musaqat)
Rules for a partnership where one person provides fruit trees and another person waters and cares for them, sharing the harvest.
SS 51
Options to Revoke Contracts Due to Incomplete Performance
Gives buyers the right to cancel or get compensation when goods arrive faulty, incomplete, or not as described.
SS 52
Options to Reconsider (Cooling-Off Options, Either-Or Options, Revoke for Non-Payment)
Rules for three options: thinking time after signing, canceling when the buyer does not pay, and picking one item from a list.
SS 53
Arboun (Earnest Money)
Rules for earnest money: a deposit a buyer pays to hold a deal, which he loses if he walks away.
SS 54
Revocation of Contracts by Exercise of a Cooling-Off Option
How a contract can be canceled when the parties agreed in advance that one of them may revoke it.
SS 55
Competitions and Prizes
Islamic rules for competitions, prizes, and promotional draws run or sponsored by financial institutions.
SS 56
Liability of Investment Manager
When a person managing someone else's investments must pay for losses: only for misconduct, negligence, or breaking the agreed terms.
SS 57
Gold and its Trading Parameters in Shari'ah
Islamic rules for buying, selling, and investing in gold.
SS 58
Repurchase Agreement / Buyback
Rules for buyback deals, where a seller sells an asset and later buys it back, and blocks structures that disguise interest.
SS 59
Sale of Debt
Strict rules for selling debts, banning the sale of money-debts at a discount because that is interest.
SS 60
Waqf
Rules for waqf, the Islamic endowment where an asset is locked in and its benefits given to charity, and it updates the earlier waqf standard.
SS 61
Payment Cards
Islamic rules for debit, prepaid, charge, and credit cards, banning interest-based revolving credit.
SS 62
Sukuk (exposure draft)
This is a draft standard that would require sukuk to involve a genuine transfer of asset ownership to investors, replacing the current sukuk standard.