Ujrah

Ujrah simply means "fee" or "commission" for a service provided. In Islamic banking, instead of charging interest (which is prohibited), banks charge Ujrah — a transparent, pre-agreed fee for their services.

For example, when an Islamic bank manages your investment portfolio, it charges an Ujrah (management fee) rather than taking interest. Similarly, a Takaful (Islamic insurance) operator charges Ujrah for administering the fund.

The key distinction is that Ujrah is a flat service charge — not a percentage of the borrowed amount that grows over time like interest. It must be clearly disclosed and agreed upon upfront.