Sukuk are Islamic investment certificates — often called "Islamic bonds" — that represent ownership in a real asset or project and pay returns from that asset rather than interest.

Conventional bonds pay interest, which is riba and therefore prohibited. Sukuk instead give you a share in a tangible asset and its income, so the return comes from real economic activity. They are a core Shariah-compliant way to earn steady income.

In Pakistan: the government and companies issue sukuk, and some Islamic mutual funds hold them.

Example: a sukuk backed by a toll road pays you a share of the toll income, not a fixed interest coupon.

Don't confuse it with: a conventional bond, which pays interest.

Related terms: Riba · Shariah-compliant · Mutual fund Where you'll meet this: Is digital gold halal?