---
title: "What is Wakalah? | IslamicOpenFinance™"
description: "Agency: one party appoints another to act on its behalf, with or without a fee."
url: https://islamicopenfinance.com/glossary/wakalah/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Lease, agency and service contracts](https://islamicopenfinance.com/glossary/#lease)

Lease, agency and service contracts

# Wakalah

Agency: one party appoints another to act on its behalf, with or without a fee.

Wakalah is a contract of agency in which a principal, the muwakkil, authorises an agent, the wakil, to carry out a task that may be delegated, with or without a fee. Bank Negara Malaysia's policy document describes its nature as the delegation of powers from principal to agent. Islamic banks use wakalah widely: to appoint customers as agents to buy assets, to manage investment accounts for a fee, and to run takaful funds.

## Sources

- [Bank Negara Malaysia, Wakalah policy document, 2016: definition and nature of wakalah](https://www.bnm.gov.my/documents/20124/938039/PD_Wakalah.pdf)

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

[**Wakalah bil-istithmar (investment agency)** Investment agency: the agent invests the principal's funds for a fee, and the profit or loss belongs to the principal.](https://islamicopenfinance.com/glossary/wakalah-bil-istithmar/) [**Wakalah model (takaful)** The takaful model in which participants appoint the operator as agent to run underwriting and investment for a known fee.](https://islamicopenfinance.com/glossary/wakalah-model/) [**Ujrah (fee)** A fee, wage or rent paid for a service, an agency or the use of an asset; the price side of ijarah and paid wakalah.](https://islamicopenfinance.com/glossary/ujrah/) [**Interbank investment wakalah** An interbank placement in which one bank invests another's funds as agent for a fee, targeting an expected but not guaranteed profit.](https://islamicopenfinance.com/glossary/interbank-investment-wakalah/)

**Lease, agency and service contracts**

1. [Ijarah](https://islamicopenfinance.com/glossary/ijarah/)
2. [Ijarah muntahia bittamleek](https://islamicopenfinance.com/glossary/ijarah-muntahia-bittamleek/)
3. [Kafalah](https://islamicopenfinance.com/glossary/kafalah/)
4. [Hawalah](https://islamicopenfinance.com/glossary/hawalah/)
5. [Ju'alah](https://islamicopenfinance.com/glossary/jualah/)
6. [Rahn](https://islamicopenfinance.com/glossary/rahn/)
7. [Ijarah mawsufah fi al-dhimmah (forward lease)](https://islamicopenfinance.com/glossary/ijarah-mawsufah-fi-dhimmah/)
8. [Ijarah of services](https://islamicopenfinance.com/glossary/ijarah-of-services/)

[All 221 terms](https://islamicopenfinance.com/glossary/)