Hawalah
Transfer of a debt: the obligation to pay moves from the original debtor to another party who accepts it.
Hawalah is the transfer of a debt from the liability of the original debtor to another party, who becomes responsible for paying it. Bank Negara Malaysia's murabahah policy document defines it, as hiwalah, in these terms. It is the classical basis for debt transfers and for some payment and settlement arrangements, and it generally involves the agreement of the parties concerned.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
KafalahA guarantee: a guarantor joins the guaranteed party in assuming a specified liability.QardA loan of money to be repaid in an equivalent amount; any benefit stipulated for the lender is riba.RahnA pledge: an asset held as collateral for a debt, which can be sold to repay it if the debtor defaults.