International Practices On Muadrabah

https://docs.oracle.com/cd/E94300_01/html/Mudarabah_Creation/Mudarabah01_Creation.
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https://docs.oracle.com/cd/E94300_01/html/Mudarabah_Creation/Mudarabah01_Creation.htm
https://www.sab.com/en/everyday-banking/accounts/Waafer/
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Although Islamic commercial banks have many products similar to those offered by
conventional banks, the two entities differ conceptually. One key difference is that
conventional banks make their profits by charging interest and fees for services,
whereas Islamic banks earn their money by profit and loss sharing, trading, leasing,
charging fees for services rendered, and using other Sharia contracts of exchange.
Unlike conventional banks, Islamic banks can thus offer various types of products. One
of such products is the Restricted Investment Account or “Mudarabah Muqayyadah”.
A Mudarabah is an Investment partnership, whereby the investor (the Sahibul Mal)

provides capital to another party/entrepreneur (the Mudarib) to undertake a
business/ investment activity. While profits are shared on a pre-agreed ratio, any loss
of investment is born by the investor only. The Mudarib loses its share of the expected
income, unless the Mudarib has been guilty of negligence or misconduct in its
management, in which case he/she shall be liable for the losses. Misconduct would
include fraud or other illegal conduct, and also willful investment of funds in breach
of Sharia prohibitions, or in breach of the investment mandate stated in the
underlying contract. Negligence would include a gross failure of due diligence,
resulting in losses.
There are two types of Mudarabah transaction: 1) Mudarabah Mutlaqah and 2)

Mudarabah Muqayyadah. In a Mudarabah Mutlaqah, the investor authorizes the
entrepreneur to run the business without restrictions in terms of type of business
activity, products, location of the business activity et cetera, as long as such business
activity does not violate the principles the Islamic Law (Sharia). In a Mudarabah
Muqayyadah, the investor stipulates certain restrictions to the entrepreneur in
running the business activity; for example, the business activity shall be in the field of
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agriculture; or gold mining; or restaurants; or other business specified and agreed by

the investor.
The Mudarabah Muqayyadah transaction may be offered by an Islamic bank to bring

together or channel the investor, who is willing to invest his/her funds, with an
entrepreneur, who needs funds for financing his/her business activity. The bank will
act as the fund manager, investment manager or agent. As a fund manager/
investment manager/agent, the bank will charge a service fee, as agreed by the
parties.
There are two types of Mudarabah Muqayyadah: 1) Mudarabah Muqayyadah where the
Islamic bank acts as a channeling agent and 2) Mudarabah Muqayyadah where the
Islamic bank act as an executing agent. A Mudarabah Muqayyadah where the bank acts
as a channeling agent will not be booked on the balance sheet of the bank (“off-
balance-sheet”) and the bank shall not be entitled to share in the profits. On the
other hand, in a Mudarabah Muqayyadah where the bank act as an executing agent,
the bank will be entitled to a share of the profits and a service fee (if agreed in the
contract); and it will be booked on the balance sheet of the bank (“on-balance-
sheet”).
The Mudarabah Muqayyadah can be done through one of several schemes: 1) one to
one; 2) one to many; 3) many to one; 4) many to many; which mean, respectively: 1)
one investor to finance one entrepreneur for a single specific business activity; 2) one
investor to finance more than one entrepreneur for more than one specific business
activities; 3) more than one investor to finance one entrepreneur for a single business
activity; 4) more than one investor to finance more than one entrepreneur.
The product of Mudarabah Muqayyadah may increase the Financing to Deposit Ratio of
the bank and minimize the mismatch between funding and financing activities.
Mudabarah Muqayyadah also allows investors to choose the entrepreneur and type of
business activity to be financed by their funds. Mudarabah Muqayyadah provides
transparency to the investment/financing asset's performance where the
administration and monitoring activities are handled by the bank. However, the
investor is not allowed to withdraw his/her funds prior the maturity of the
investment/financing.
There are two basic categories of Islamic financing: 1) “debt-based contracts/ debt-
based instruments”, which give a fixed return, and 2) “profit and loss sharing
contracts”, which give a non-fixed return. The investor should realize that the
Mudarabah contract is a non-fixed return basis transaction. The monthly return
received by the investor may not be the same amount every month, since it will
depend upon the profit or revenue derived from the business activity.
Presently, the use of Mudarabah Muqayyadah contracts by Islamic banks in Indonesia

constitute a small portion of the total financing contracts. In its road-map of Islamic
banking, the Financial Service Authority (“OJK”) encourages Islamic banks to improve
product diversity, among other means by launching profit-loss sharing based
contracts, such as Mudarabah Muqayyadah and other profit-loss sharing based
contracts. In connection with that, OJK has launched books on the profit-loss sharing
based contracts, i.e.: Book on Standard of Mudarabah and Book on Standard of
Musharakah and Musharakah Mutanaqisah as guidance for Islamic banks to draft such
contracts.
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This is a kind of partnership where one partner gives money to another for investing
in a commercial enterprise. The investment comes from the first partner who is called
“Rab-ulMaal” while the management and work is an exclusive responsibility of the
other, who is called “Mudarib” and the profits generated are shared in a
predetermined ratio.
There are 2 types of Mudarabah namely:
1. Al Mudarabah Al Muqayyadah: Rab-ul-Maal may specify a particular business or

a particular place for the mudarib, in which case he shall invest the money in
that particular business or place. This is called Al Mudarabah Al Muqayyadah
(restricted Mudarabah).
2. Al Mudarabah Al Mutlaqah: However if Rab-ul-maal gives full freedom to

Mudarib to undertake whatever business he deems fit, this is called Al
Mudarabah Al Mutlaqah (unrestricted Mudarabah). However Mudarib cannot,
without the consent of Rab-ul-Maal, lend money to anyone. Mudarib is
authorized to do anything, which is normally done in the course of business.
However if they want to have an extraordinary work, which is beyond the
normal routine of the traders, he cannot do so without express permission from
Rab-ul-Maal. He is also not authorized to:
3. a) keep another Mudarib or a partner
4. b) mix his own investment in that particular Modarabah without the consent of
Rab-ul Maal.
Conditions of Offer & Acceptance are applicable to both. A Rab-ul-Maal can contract
Mudarabah with more than one person through a single transaction. It means that he
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can offer his money to ‘A’ and ‘B’ both so that each one of them can act for him as
Mudarib and the capital of the Mudarabah shall be utilized by both of them jointly,
and the share of the Mudarib.
Investment
In Mudarabah, Rab-ul-maal provides the investment and Mudarib the management

therefore the Rab-ul-maal should hand over the agreed investment to Mudarib and
leaves everything to Mudarib with no interference from his side but he has the
authority to:
1. a) Oversee the Mudarib’s activities and

2. b) Work with Mudarib if the Mudarib consents.
In what form should the capital be? Should it be liquid or non-liquid assets like
equipment, land etc. can these form a capital?
The basic principle is that the capital in Mudarabah is valid just the way as it is in
Shirkah which according to Hanafi fiqh should be in liquid form but according to other
scholars equipment, land etc can also be included as capital. However all agree on
the following:
Assets other than cash can be used as an intermediate step.
However this is subject to the determination of exact amount of the assets before it
is used for Mudarabah. If the assets are not correctly evaluated, the Mudarabah is not
valid.
Mudarabah Expenses
The Mudarib shares profit of the Mudarabah as per agreed rate with the investor but
his expenses like meals, clothing, conveyance and medical are not borne by
Mudarabah. However, if he is traveling on business and is overstaying the night, then
the above expenses shall be covered from capital. If Mudarib goes for a journey which
constitutes Safar-e-Sharai (more than 48 miles) but does not overstay the night, his
expenses will not be borne by Mudarabah.
All expenses which are incidental to the Mudarabah’s function like wages of
employees/workers or Commission in buying/selling or stitching, dyeing expenses etc
have to be paid by the Mudarabah. However all expenses will be included in the cost
of commodities which Mudarib is selling for eg. if he is selling ready-made garments
then the stitching, dyeing, washing expenses etc. can be included by the Mudarib in
the total cost of the garments.
If the Mudarib manages the Mudarabah within his city , he will not be allowed any
expenses, only his profit share. Similarly, if he keeps an employee, this employee will
not be allowed any expenses, just his salary.
If the Mudarabah agreement becomes Fasid due to any reason, the Mudarib’s status
will be like an employee, meaning:
1. a) whether he is traveling or doing business in his city, will not be entitled to

any expense such as meals, conveyance, clothing, medicine etc.
2. b) he will not be sharing any profit and will just get Ujrat-eMisl (ordinary pay)
for his job.
Distribution of Profit & Loss
It is necessary for the validity of Mudarabah that the parties agree, right at the
beginning, on a definite proportion of the actual profit to which each one of them is
entitled. The Shariah has prescribed no particular proportion; rather it has been left
to their mutual consent. They can share the profit in equal proportions and they can
also allocate different proportions for Rab-ul-Maal and Mudarib. However in extreme
case where the parties have not predetermined the ratio of profit, the profit will be
calculated at 50:50.
The Mudarib & Rab-ul-Maal cannot allocate a lump sum amount of profit for any party
nor can they determine the share of any party at a specific rate tied up with the
capital. For example, if the capital is Rs.100,000/-, they cannot agree on a condition
that Rs.10,000 out of the profit shall be the share of the Mudarib nor can they say
that 20% of the capital shall be given to Rab-ul-Maal. However they can agree that
40% of the actual profit shall go to the Mudarib and 60% to the Rab-ul-Maal or vice
versa
It is also allowed that different proportions are agreed in different situations. For
example, the Rab-ul-Maal can say to Mudarib “If you trade in wheat, you will get 50%
of the profit and if you trade in flour, you will have 33% of the profit”. Similarly, he
can say “If you do the business in your town, you will be entitled to 30% of the profit
and if you do it in another town, your share will be 50% of the profit”.
Apart from the agreed proportion of the profit, as determined in the above manner,
the Mudarib cannot claim any periodical salary or a fee or remuneration for the work
done by him for the Mudarabah.
All schools of Islamic Fiqh are unanimous on this point. However, Imam Ahmad has
allowed for the Mudarib to draw his daily expenses of food only from the Mudarabah
Account. The Hanafi jurists restrict this right of the Mudarib only to a situation when
he is on a business trip outside his own city. In this case he can claim his personal
expenses, accommodation, food, etc. but he is not entitled to get anything as daily
allowances when he is in his own city.
If the business has incurred loss in some transactions and has gained profit in some
others, the profit shall be used to offset the loss at the first instance, then the
remainder, if any, shall be distributed between the parties according to the agreed
ratio.
The Mudarabah becomes void (Fasid) if the profit is fixed in any way. In this case, the
entire amount (Profit + Capital) will be the Rab-ul-Maal’s. The Mudarib will just be an
employee earning Ujrat-e-Misl.
The remaining amount will be called (Profit).
This profit will be shared in the agreed (pre-agreed) ratio.
Roles of the Mudarib:
Ameen (Trustee): To look after the investment responsibly, except in case of natural
calamities
Wakeel (Agent) : To purchase from the funds provided by Rab-ul-Maal
Shareek (Partner): Sharing in any profit
Zamin (Liable): To provide for the loss suffered by the Mudarabah due to any act on
his part.
Ajeer (Employee): When the Mudarabah gets Fasid due to any reason, the Mudarib is
entitled to only the salary, Ujrat-e-Misl.
In case there is a loss, the Mudarib will not even get the Ujrate-Misl.
Termination of Mudarabah
The Mudarabah will stand terminated when the period specified in the contract
expires. It can also be terminated any time by either of the two parties by giving
notice. In case Rab-ul-Maal has terminated services of Mudarib, he will continue to
act as Mudarib until he is informed of the same and all his acts will form part of
Mudarabah.
If all assets of the Mudarabah are in cash form at the time of termination, and some
profit has been earned on the principal amount, it shall be distributed between the
parties according to the agreed ratio. However, if the assets of Mudarabah are not in
cash form, it will be sold and liquidated so that the actual profit may be determined.
All loans and payables of Mudarabah will be recovered. The provisional profit earned
by Mudarib and Rab-ul-Maal will also be taken into account and when total capital is
drawn, the principal amount invested by Rab-ul-Maal will be given to him, balance
will be called profit which will be distributed between Mudarib and Rab-ul-Maal at the
agreed ratio. If no balance is left, Mudarib will not get anything. If the principal
amount is not recovered fully, then the profit shared by Mudarib and Rab-ulMaal
during the term of Mudarabah will be withdrawn to pay the principal amount to Rab-
ul-Maal. The balance will be profit, which will be distributed between Mudarib and
Rab-ulMaal. In this case too if no balance is left, Mudarib will not get anything
Uses Of Musharakah / Mudarabah :

These modes can be used in the following areas (or can replace them according to
Shariah rules).
Asset Side Financing
 Short/medium/long - term financing

 Project financing
 Small & medium enterprises setup financing
 Large enterprise financing
 Import financing
 Import bills drawn under import letters of credit
 Inland bills drawn under inland letters of credit
 Bridge financing • LC without margin (for Mudarba)
 LC with margin (for Musharakah)
 Export financing (Pre-shipment financing)
 Working capital financing
 Running accounts financing / short term advances
Liability Side Financing
 For current /saving/mahana amdani/investment accounts (deposit giving Profit

based on Musharkah / Mudarabah – with predetermined ratio )
 Inter- Bank lending / borrowing
 Term Finance Certificates & Certificate of Investment
 T-Bill and Federal Investment Bonds / Debenture.
 Securitization for large projects (based on Musharkah)
 Certificate of Investment based on Murabahah (Eg: Al Meezan Riba Free )
 Islamic Musharakah bonds (based on projects requiring large amounts – profit
based on the return from the project)
Source: Dr. Muhammad Imran Ashraf Usmani, Meezan Bank’s Guide to Islamic
Banking.
1. Mudarabah:
The term refers to a form of business contract in which one party brings capital and
the other personal effort. The proportionate share in profit is determined by mutual
agreement. But the loss, if any, is borne only by the owner of the capital, in which
case the entrepreneur gets nothing for his labour. The financier is known as ‘rabal-
maal’ and the entrepreneur as ‘mudarib’. As a financing technique adopted by Islamic
banks, it is a contract in which all the capital is provided by the Islamic bank while
the business is managed by the other party. The profit is shared in pre-agreed ratios,
and loss, if any, unless caused by negligence or violation of terms of the contract by
the ‘mudarib’ is borne by the Islamic bank. The bank passes on this loss to the
depositors.
2. Mudarabah:
We may act as managing trustee (‘Modareb’) while you are the beneficial owner (Rab
El-Maal). It is our responsibility to invest the funds that you provide. Alternatively,
our roles may be reversed, when you, as managing trustee, are responsible for
investing our funds. In each case, we shall agree on our relative share of any profits.
3. Mudarabah:
In the theoretical model of Islamic banking Mudaraba has been suggested a technique
which shall provide the basis for the Islamic re-organisation of commercial banking
sector. In actual practice of Islamic banking, Mudaraba has not made much progress
on t he asset side of the balance sheet, although on the liability side the Islamic banks
on Mudaraba accept the funds in investment accounts. Mudaraba is mostly translated

in English as profit and loss sharing.
There is no loss sharing in a Mudaraba contract. Profit and loss sharing is more
accurate description of the Musharaka contract. The Mudaraba contract may better
be represented by the expression profit sharing Mudaraba is an Islamic contract in
which one party supplies the money and the other provides management in order to
do a specific trade. The party supplying the capital is called owner of the capital. The
other party is referred to as worker or agent who actually runs the business. In the
Islamic Jurisprudence, different duties and responsibilities have been assigned to each
of these two.
As a matter of principle the owner of the capital does not have a right to interfere in
to the management of the business enterprise which is the sole responsibility of the
Agent x. However, he has every right to specify such conditions that would ensure
better management of his money. That is why sometime Mudaraba is referred as
sleeping partnership. An important characteristic of Mudaraba is the arrangement of
profit sharing. The profits in a Mudaraba agreement may be shared in any proportion
agreed between the parties before hand. However, the loss is to be completely borne
by the owner of the capital. In case of loss, the capital owner shall bear the monetary
loss and agent shall lose the reward of his effort. Mudaraba could be individual or
joint.
Islamic banks practice Mudaraba in its both forms. In case of individual Mudaraba an
Islamic bank provides finance to a commercial venture run by a person or a company
on the basis of profit sharing. The joint Mudaraba may be between the investors and
the bank on a continuing basis. The investors keep their funds in a special fund and
share the profits without even the liquidation of those financing operations that have
not reached the stage of final settlement. Many Islamic Investment Funds operate on
the basis of joint Mudaraba.
4. Mudarabah:
This is an agreement made between two parties: one which provides ‘100 percent of
the capital’ for the project and another party known as a ‘Mudarib’ who using his
entrepreneurial skills, manages the project. Profits arising from the project are
distributed according to a predetermined ratio. Any losses accruing are borne by the
provider of capital. The provider of capital has no control over the management of
the project.
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Q - Is it lawful for the investor to seek from the contractor (agent-manager) payment
of a specific percentage of the contract (for the deal the agent-manager is to
undertake as his/her part of the mudarabah operation) in addition to (the agreed
upon return from) the capital invested? Regardless of the amount financed, and
regardless of whether the operation is profitable or not?
W.Q
Saudi Arabia
A - Such a contract will not be valid because it includes the agent-manager's liability
for the capital investment; when the agent-manager is no more than a trustee of the
capital and cannot be made liable for it unless he/she has been negligent or
incompetent in its use. Secondly, the investor's stipulating that the agent-manager
pay a certain amount; when such a condition invalidates the contract because it
means that the two partners will not share in the profits.
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Q - Where an Islamic Bank owing to its position in the international banking

community, undertakes mudarabah operations in partnership with several other banks
and financial institutions, some of which are Islamic and some of which are not. And
that the bank serves as agent-manager for the group, using the funds they invest to
purchase goods and then sells them by means of murabahah, such that the bank
authorizes an international firm, as its agent, to purchase goods on behalf of the bank
by means of a murabahah sales contract with that company. Is this permitted under
the Shariah?
H.Y
Geneva
A - The jurists of all the major legal schools are agreed on the legitimacy of
mudarabah transactions. In this regard they cite texts from the Qur'an and the
Sunnah. In the Qur'an, the root for the word mudarabah, d-r-b, is used in a verse that
clearly indicates the lawfulness of trade: And others who go forth in the earth,
seeking the bounty of the Almighty (73:20). In the Sunnah, it is related that Ibn 'Abbas
said, "Our tribal leader, al 'Abbas ibn 'Abd al Muttalib, whenever he paid money out in
mudarabah, would stipulate to his partner that he must not cross over water with his
money, or make camp in a dry riverbed, or buy a fractious mount with it. If his
partner did any of those things, he would be held personally responsible. When news
of these conditions reached the Prophet of Allah, upon him be peace, he endorsed
them."
Given the lawfulness of mudarabah from a Shari'ah perspective, the Board sees no
impediment to the bank's purchasing goods on the international market with funds
gathered from other Islamic banks and financial institutions in partnership, and then
its assuming the responsibility of managing the operation (as agent-manager) as a
mudarabah in which it also participates as an investor, regardless of whether its
dealings are undertaken on a short or a long-term basis, or take the form of either a
sale of trust, such as murabahah, or an ordinary bargained sale.
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Q - Is it lawful for the bank to charge its client for consultative services ordered by
the bank for the study of a project's feasibility before investing in it with, or for, its
client by means of mudarabah?
M.A
Jordan
A - There is no legal impediment to taking payment from a client in return for actual
consultation presented to the bank in regard to the study and evaluation of projects
for mudarabah, musharakah, ijarah, etc. Services performed after a contract has
been signed, however, will be shared equally by the client and the bank; except in
regard to interest-free loans in which case all fees will be paid by the client alone
after the contract has been signed.
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Q - What is the Shari'ah ruling in regard to the bank's paying zakah on the profits
earned by investors in mudarabah operations?
P.Z
Egypt
A - There is no legal impediment to the bank's paying zakah from the accounts of its
investors so long as it does so with the approval of investors who have authorized it in
writing to deduct their zakah portions from their investment accounts; either from
their profits or, if no profits are realized, then from the capital investment itself.
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Q - It is a well-established fact in international economics that the greater the

amount of capital invested, the greater the profits that may be expected. Will it be
lawful, therefore, to combine the capital from two or more mudarabah operations in
a single investment vehicle, especially when the mudarabah operations are managed
by a single firm?
A.M
Cayman Islands
A - The Board sees no legal impediment to combining the capital from two or more
mudarabah operations in a single account that is maintained in accordance with the
Shari'ah of Islam, so long as the profits and losses are distributed in proportion to the
percentage of each shareholder's investment in the mudarabah.
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Q - To what extent will it be lawful to include the following condition in a contract

for an investment savings account: The minimum daily balance acceptable for
participation in investment schemes will be one hundred Dinars. If the balance falls
below that amount, the account will become a regular current account, and will no
longer be subject to the rules for a mudarabah investment.
R.H
France
A - There is no legal impediment to placing a minimum on the daily balance in the

conditions of the contract. If the balance falls below one hundred, the account will be
treated like an ordinary current account because a musharakah may be dissolved by
means of such a condition.
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Q - Is it lawful to transfer mudarabah contracts from one agent manager to another,

when there is an express or implicit approval for the same, and/or the transfer is
agreed to either, individually or collectively by the investing partners in their
capacity as the benefiting owners.
M.J
India
A - It is lawful to transfer mudarabah contracts in the light of the legal principle

which states that the agent-partner in mudarabah transactions may be engaged under
the following conditions:
The investors will not have to pay for the second agent-partner brought in by the
first. Rather the two will share in the percentage of the profit specified for the first
agent-partner and agreed to by the investor(s).
Since the mudarabah contract is not legally binding, it may be dissolved at will by
either of the contracting parties.
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Q - Is it lawful for the bank in a mudharabah sale transaction, to invest in one of its
accounts, a deposit (representing 5% of the value of the sale transaction) paid in by
the purchase pledger as a guarantee of payment.
M.S
USA
A - Such an investment is not lawful, regardless of whether the deposit is kept in a

current account or in an investment account. This is because the deposit is a (the
client's) guarantee against payment and, if it is to be invested, it should be invested
to the benefit of the client.
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Q - Is the practice of the bank lawful, in coming to an agreement with its clients on
an amount that will serve as a ceiling for their transactions over a specified period of
time. And within the framework of that agreement, dealings are undertaken with the
client by means of murabahah in which the amount of profit is specified in advance of
purchases, and on a deal to deal basis. Is this practice in accordance with the Shariah?
S.A.O
Switzerland
A - There is no legal impediment of setting limits on the extent the bank is willing to
Finance a client in their original agreement, or to specify the percentages of profit
for each and every murabahah deal when the bank receives the client's order, in the
understanding that the order represents the clients pledge to purchase. A pledge to
buy, however, is not the same as a sale, but rather a binding agreement to but at the
time the sale is ready to be completed.
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Q - Will it be lawful to distribute monthly or periodical profits to investors in long-

term mudarabah operations that will not yield returns until after the passing of
several years?
I.M
U.K
A - There is no legal impediment to an agent-manager's distribution of profits from

long term mudarabah operations to investors, by periodically paying investors in the
for of interest free loans guaranteed by their capital investments. The periods for
such payments may be determined by the agent manager. Furthermore the loans will
be debited at the final accounting of the profits.
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Q - How is the share of profits for each of the parties in a mudarabah operation to be
determined?
I.A
Sharjah, UAE
A - It is legally required that whatever is specified as profit for both the bank (the
agent-manager) and the investor (the bank's client) be for-mulaled precisely from the
joint share, that it be known to both parties, and that it remain intact throughout the
mudarabah operation period. Such a determination, moreover, must be included in
the mudarabah contract either at the time it is entered into or when it is renewed. If
the profit percentage is to be changed in the future, prior notification of such a
change must be made, and a period of time must be set, the passing of which will be
taken to indicate the investors agreement to the change if he/she has not objected
(to it by that lime).
Back to the top
Q - Is it lawful for the working partner in a mudharabah operation to sell the

possessions of the financing partner without seeking the permission of the partner?
I.N
India
A - It is not lawful for the working partner in mudarabah to sell his own possessions in
exchange for mudarabah money (that he is administering), regardless of whether
those possessions are lar removed from the wealth of the (mudarabah financed)
company (operation), or actually considered a part of it. It is likewise unlawful for the
partner to buy merchandise from the mudarabah operation for himself. In both cases,
however, if the financing partner gives special permission, the sale will be lawful.
Back to Top
AIB
Private Mudarabah Savings Account:
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Mudarabah Saving Account is designed specifically to meet the requirements of
customers who authorize the Bank to invest their cash deposits in Shariah Compliant
Businesses. Customers can deposit or withdraw money at any time they wish, and they
will earn halal profits on their savings.
Required Documents & Initial Deposit
Required Documents:
Original NID (Tazkira)
Second ID (Passport, Driving License, Employment ID, School Certificate, Business

License & Property Title Deed)
Source of Income (Employment ID/Contract)
Address Verification (Electricity Bill, Municipality tax registration document ‫کتابچ ه‬

‫)صفای‬, Water Bill or Confirmation of our inquiry letter by District Attorney)
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https://www.aib.af/aibpublic/islamic_personal_mudarabah_saving_account
Update Passport size Photo
Initial Deposit:
Initial Deposit for AFN Account AFN 8,900
Initial Deposit for USD Account $100
Fee:
Free Monthly Maintenance fee for AFN Account
Free Monthly Maintenance fee on USD Account
Free Printed statement for AFN Account
For Printed statement on USD Account $5
Additional Services & Benefits Included
Products and Services:
Free Online Banking Service
Type of Accounts (Qard Current, Mudharabah Saving, Mudharabah Term Deposit)
ATM Services Facility
Free Master & Visa Debit Card Issuance with $20 Annual fee
Islamic Credit Card Issuance
Free SMS Banking
Murabaha Financing ( Industrial Financing, Business, and Corporate Financing)
Benefits:
Monthly & Quarterly profit/loss distribution
Profit announcement at end of every quarter

20% Government tax deduction from the earned profit
Withdrawal facility up to 4 times a month
Safe and Secure Transaction
Easy, Reliable, and Free AFN Transfer of Funds to other Local Banks
International Remittances to all countries (Except Sanction countries)
$2,000 Or Equivalent AFN Withdrawal Through ATMs
Currency Exchange Facility
Option for Joint and Shared account
24/7 Customer Connection Channels – Through Call center and Social media
4
Islamic Mudarabah Saving Account is based on the Mudarabah concept which
generates profit on customers average daily account balances. The most important
difference between this account and conventional saving accounts is that the
customers’ funds are invested in Shariah Compliant Islamic assets and customers
benefit from the profit that these assets generate.
Features and Benefits of Islamic Mudarabah Saving Account include:
Approved by SAB’s Shariah Committee
A periodic statement is provided to record account transaction details
Availability of debit card with unlimited transactions anywhere in the world, that
supports Mada Pay and is available as a physical or virtual card
4
https://www.sab.com/en/everyday-banking/accounts/islamic-mudaraba-account/
Supports standing instructions being placed
Account can be opened in all major currencies
Profit is calculated based on daily average balances maintained during the month
Free access to your account at any time via SAB Mobile, SAB Phone (telephone
banking) and SAB Online (internet banking)
Islamic Mudarabah Account
Example: Expected monthly profits based on monthly average balance
Monthly Average Balance AER Period Expected Profit Amount Frequency of Profit
payment
SAR 50,000 0.10 1M SAR 4.16 Monthly
Monthly Average Balance AER Period Expected Profit Amount Frequency of Profit
payment
SAR100,000 0.10 1M SAR8.33 Monthly
Monthly Average Balance AER Period Expected Profit Amount Expected Maturity
Amount
SAR 250,000 0.10 1M SAR20.83 Monthly
*AER : is an Annual Equivalent Rate, is a figure which shows what the profit rate on an
account would be if profit was paid for a full year and compounded.
Minimum average required is SAR 5,000 or its equivalent

Mudaraba Mudaraba
Al Wadiah Foreign
Savings Term Mudaraba Scheme Account
Account Account
Account Account
› Current › Savings › Mudarabah

› Alo › Bondhon › FC
Deposit Deposit Term Deposit
› Mudarabah
› Shomman › Onkur Monthly Profit › Niramoy › Unnoti › RFCD
Scheme
› FSIB
› Morjada › Projonmo › MMDS › Ghoroni › NFCD
Murobbi
› MMDS -
› Prapti › Mahiyasi › Swadesh › ERQ
Gold
› FSIB
› Probin › Agroshor › Haj › NITA
Sanchay
› Double
› Mehonoty › Uddipon › Musafir › Other
Benefit
› Sanchaye
› SND › Proyash › Aboshor
Shukh
› Smart
› Century › Durbar › Merchant
Account
› Smania › Ehsan
› Utshob
› Utshob- 24
› Mudarabah
Smart Deposit
Double
Scheme
Considering the contribution of Senior Citizen in high esteem, FSIB offers a unique moderate
saving account for their convenience.
Key Features:
 A savings account for senior citizen aged 60 years or above.

 Initial Deposit Tk. 5,000/-.
 Highest Profit rate on deposit.
 Free VISA Debit Card *
 Free Cheque Book. *
 Attractive profit rate.
 Online banking facilities.
 Internet Banking.
 SMS Banking.
 20% Discount on Locker Services (applicable for branches having locker facility).
 FSIB Cloud apps and many more…
Documents needed for availing the service:
1. Two copies passport size photograph of the applicant (photograph must be attested by
the Introducer).
2. One copy passport size photograph of the nominee (photograph to be attested by the
applicant).
3. Photocopies of National ID Card/Passport/Driving License of both applicant and
nominee.
4. TIN Certificate (if applicable).
5. Copy of recent utility bill (Gas, Electricity, Wasa, Telephone) as a proof of mailing
address.
Eligibility:
 Minimum Age: 60 years.

 Citizen of Bangladesh.
*Condition(s) apply
Nigeria
Jaiz Savings Account is operated based on the principle of Mudarabah (Partnership).

The account allows customers earn profit on their deposits. Account holders are
considered as investors while the Bank act as the Fund Manager and invest funds into
financially profitable, socially responsible and commercially viable business ventures
which are Shariah compliant. Gross profit made from the investment is distributed at
the end of every month based on customer's account balance and pre-agreed
profitsharing ratio between the Bank and Customer.
Features
Monthly profit payment
Instant Debit Card (Verve or Mastercard) issuance
Access to Internet, Mobile and USSD banking services Cheque/Dividend lodgment

Warrant (up to N2 Million face value)
Free monthly E-Statement of Account
JAPSA Term Deposit Account (Mudarabah)
At Jaiz Bank, building your wealth ethically is always a priority. JAPSA Term deposit is
an innovative product designed specially to meet your investment needs. The Term
Deposit offers you the option of higher profit rates at tenures which suit your needs.
Account holders are considered as investors while the Bank acts as the Fund Manager
and invest the depositors' funds into financially profitable, socially responsible and
commercially viable business ventures which are Shariah compliant. Gross profit made
from the investment is distributed at the end of every month based on preagreed
profit sharing ratio.
Features
Opening balance of N500,000
Attractive returnsInvestment period (tenure) is a minimum of 30 days and a maximum

of 360 days.
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Egypt
AIDB Egypt
5
Mudaraba Investment Deposit
Mudaraba is a contract for sharing profit, where a capital provider receives a share of
the profit against his capital and an entrepreneur receives a share of the profit
against YOUR BENEFITS INCLUDE
Islamic Shari’a Compliant
Competitive expected profit rates
Possibility of profit withdrawal through ATMs 24/7
Possibility of redemption based on early redemption table
FEATURES
Short term liability product
DURATION
1 month / 2 months / 3 months / 6 months / 12 months
CURRENCY
EGP / USD / EUR / GBP / SAR
TYPES OF MUDARABAT
Minimum balance in Local currency: EGP 3,000
Minimum Balance in Foreign currency: USD 1,000, EUR 1,000, GBP 1,000, SAR 1,000
PROFIT CALCULATION BASED ON ISLAMIC SHARI’A GUIDELINES AND TERMS AND

CONDITIONS OF THE MUDARABA CONTRACT:
Profit is calculated based on the actual number of days depending on deposit duration
his labor and/or management.
REQUIRED DOCUMENTS
5
https://www.adib.eg/personal-banking/accounts/mudaraba-deposit
Account Opening Form
Mudaraba Application request
Wekala Investment Agreement
Copy of national ID or passport copy with a valid residence visa for (for Non Egyptians)
Recent utility bill
Proof of business
Evidence of residence (utility bill) in case of it’s different from the national ID
ELIGIBILTY
Offered to both Individuals and Non-Individuals
Offered to Egyptians and foreign residents
Offered to minors under the guardianship of their parents
Investment Deposits
6
Ahli United Bank’s Sharia-compliant Investment Deposits are based on Mudharaba,
and offer a wide range of tenures, ranging from 7 days to 1 year, to suit your
investment plans. You can opt for attractive profit rates that can be paid monthly,
quarterly, or upon maturity with a facility for auto renewal
Benefits
Flexible time period to suit you
Auto rollover facility for same period of deposit
Financing/Credit Card available against deposit
6
https://www.ahliunited.com/bh/personal/mysavings/investment-deposit/
Flexible profit payout options
Available for Bahrainis
and expats
Flexible Profit Payout Options

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https://docs.oracle.com/cd/E94300_01/html/Mudarabah_Creation/Mudarabah01_Creation.

A Mudarabah is an Investment partnership, whereby the investor (the Sahibul Mal)

There are two types of Mudarabah transaction: 1) Mudarabah Mutlaqah and 2)

agriculture; or gold mining; or restaurants; or other business specified and agreed by

The Mudarabah Muqayyadah transaction may be offered by an Islamic bank to bring

Presently, the use of Mudarabah Muqayyadah contracts by Islamic banks in Indonesia

There are 2 types of Mudarabah namely:

1. Al Mudarabah Al Muqayyadah: Rab-ul-Maal may specify a particular business or

2. Al Mudarabah Al Mutlaqah: However if Rab-ul-maal gives full freedom to

In Mudarabah, Rab-ul-maal provides the investment and Mudarib the management

1. a) Oversee the Mudarib’s activities and

Assets other than cash can be used as an intermediate step.

1. a) whether he is traveling or doing business in his city, will not be entitled to

Distribution of Profit & Loss

The remaining amount will be called (Profit).

This profit will be shared in the agreed (pre-agreed) ratio.

Roles of the Mudarib:

Wakeel (Agent) : To purchase from the funds provided by Rab-ul-Maal

Shareek (Partner): Sharing in any profit

Uses Of Musharakah / Mudarabah :

Asset Side Financing

 Short/medium/long - term financing

Liability Side Financing

 For current /saving/mahana amdani/investment accounts (deposit giving Profit

on Mudaraba accept the funds in investment accounts. Mudaraba is mostly translated

Q - Where an Islamic Bank owing to its position in the international banking

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Q - It is a well-established fact in international economics that the greater the

Q - To what extent will it be lawful to include the following condition in a contract

A - There is no legal impediment to placing a minimum on the daily balance in the

Q - Is it lawful to transfer mudarabah contracts from one agent manager to another,

A - It is lawful to transfer mudarabah contracts in the light of the legal principle

A - Such an investment is not lawful, regardless of whether the deposit is kept in a

Q - Will it be lawful to distribute monthly or periodical profits to investors in long-

A - There is no legal impediment to an agent-manager's distribution of profits from

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Back to the top

Q - Is it lawful for the working partner in a mudharabah operation to sell the

Private Mudarabah Savings Account:

Required Documents & Initial Deposit

Original NID (Tazkira)

Second ID (Passport, Driving License, Employment ID, School Certificate, Business

Source of Income (Employment ID/Contract)

Address Verification (Electricity Bill, Municipality tax registration document ‫کتابچ ه‬

Update Passport size Photo

Initial Deposit for AFN Account AFN 8,900

Initial Deposit for USD Account $100

Free Monthly Maintenance fee for AFN Account

Free Monthly Maintenance fee on USD Account

Free Printed statement for AFN Account

For Printed statement on USD Account $5

Additional Services & Benefits Included

Products and Services:

Free Online Banking Service

Type of Accounts (Qard Current, Mudharabah Saving, Mudharabah Term Deposit)

ATM Services Facility

Islamic Credit Card Issuance

Free SMS Banking