Rahnu Rail

Pledge and collateral contract endpoints for Islamic secured financing.

Overview

The Rahnu rail provides:

Pledge/collateral contract creation and management
Asset valuation and revaluation workflows
Collateral custody and safekeeping
Default handling and collateral liquidation

Rahnu is a pledge or collateral contract where the borrower (Rahin) provides an asset as security to the creditor (Murtahin) to guarantee the repayment of a debt or obligation. The pledged asset remains owned by the borrower, but the creditor holds it as security until the obligation is fulfilled.

In Islamic banking, Rahnu is commonly used alongside Qard Hasan for pawnbroking (Ar-Rahnu), gold-based financing, and collateralized lending. The pledgee (creditor) may charge a safekeeping fee (Ujrah) for storing and maintaining the pledged asset, but may not charge interest on the underlying loan.

The pledged asset cannot be used or benefited from by the creditor unless explicitly permitted by the pledgor. If the borrower defaults, the creditor may sell the pledged asset to recover the debt, returning any surplus to the borrower. The creditor may not appropriate the pledged asset for themselves.

Endpoints

Create Rahnu Contract

POST /v1/rails/rahnu/contracts

const contract = await iof.rahnu.create({
  description: "Gold collateral for Qard Hasan facility",
  pledgor_id: "cpty_borrower",
  pledgee_id: "cpty_institution",
  pledged_asset: {
    type: "gold",
    description: "Gold bar 999.9 purity",
    weight_grams: 100,
    appraised_value: 7500,
  },
  currency: "USD",
  secured_obligation_id: "qrd_abc123",
  safekeeping_fee_monthly: 25,
  loan_to_value_ratio: 0.7,
});

Response:

{
  "id": "rhn_xyz",
  "type": "rahnu",
  "status": "DRAFT",
  "pledged_asset": {
    "type": "gold",
    "description": "Gold bar 999.9 purity",
    "weight_grams": 100,
    "appraised_value": 7500
  },
  "currency": "USD",
  "secured_amount": 5250,
  "loan_to_value_ratio": 0.7,
  "safekeeping_fee_monthly": 25,
  "created_at": "2024-01-15T10:30:00Z"
}

Get Rahnu Contract

GET /v1/rails/rahnu/contracts/:id

List Rahnu Contracts

GET /v1/rails/rahnu/contracts

Execute Rahnu Contract

POST /v1/rails/rahnu/contracts/:id/execute

Revalue Asset

POST /v1/rails/rahnu/contracts/:id/revalue

Release Pledge

POST /v1/rails/rahnu/contracts/:id/release

Liquidate Collateral

POST /v1/rails/rahnu/contracts/:id/liquidate

Contract Status

Status	Description
`DRAFT`	Contract created, pending review
`PENDING_SHARIAH_REVIEW`	Awaiting Shariah board approval
`SHARIAH_APPROVED`	Approved by Shariah board
`ACTIVE`	Asset pledged and in custody
`MARGIN_CALL`	Asset value fallen below threshold
`RELEASED`	Obligation fulfilled, asset returned
`LIQUIDATED`	Asset sold to recover debt
`TERMINATED`	Contract terminated early

Shariah Compliance

The pledged asset must be owned by the pledgor and legally transferable
The creditor may not use or benefit from the pledged asset without permission
Safekeeping fees must reflect actual custody costs, not a percentage of loan value
In case of default, the asset must be sold at fair market value
Any surplus from the sale after recovering the debt must be returned to the pledgor
The creditor may not appropriate the pledged asset in lieu of the debt

Webhooks

Event	Description
`rahnu.contract.created`	Contract created
`rahnu.contract.executed`	Asset pledged and received
`rahnu.asset.revalued`	Pledged asset revalued
`rahnu.margin.call`	Margin call triggered
`rahnu.pledge.released`	Asset returned to pledgor
`rahnu.collateral.liquidated`	Asset liquidated for recovery

Standards

Next Steps

Kafalah Rail - Guarantee contracts
Qard Rail - Interest-free loan
Contracts Rail - General contract management