Arabic (رهن) for an arrangement whereby a valuable asset is posted as collateral for a debt (dayn). The collateral may be disposed of in the event of default. Shari’a permits that a lender/creditor stipulates that at or prior to the conclusion of a credit transaction the borrower/ debtor shall put up some form of pledge (rahn) to secure repayment, and that possession of the pledged asset (marhoon) will not hinder the lender demanding repayment when it falls due.

The contract of rahn is binding on the debtor who posts it, even if the pledged asset is not left in the possession of the creditor, and thus the debtor cannot annul the contract. However, the acceptance of a pledge is not binding on the creditor as he is entitled to disclaim his right thereto.