Mudharabah

Mudharabah Background Mudharabah subjugate is a profit sharing contract betwixt the entrepreneur and the capital provider. Mudharabah contract is utilize in lay taking arrangement such as latest account, savings account and investment account. The contract is also applied in inter- banking concern investment and Muslim bonds. In takaful industry, mudharabah contract is utilize as one of the ope proportionalitynal model as well as being applied for investing the takaful funds. Issues 1. Floating Moslem conveyable cats-paw of Deposit (INID) Bank Negara Malaysia has introduced go INID with the following appliances: i. A node put forwards money into a bank; ii. The bank accepts customers deposit and issues INID to the customer as an evidence of receiving deposit; iii. INID is tradable in the alternative market; iv. On maturity, the customer or holder of INID returns it to the bank and receives the principal take to be of INID and the declare dividend; a nd v. The declare dividend is from the profit derived from the investment of the deposit. The term floating refers to the characteristic of the harvest-home that changes in value based on the dividend declared by the bank from time to time. The question is whether the investment mechanism mentioned in a higher place is in term with mudharabah principle.

Resolution The Council in its 3rd meeting held on twenty-eighth October 1997 / 26th Jamadil Akhir 1418 resolved that Floating Islamic passable Instrument of Deposit (INID) using mudharabah concept is permissible and tradable in the secondary market. 2. Mudharabah Current Account There was a proposal from I! slamic banking institution to introduce mudharabah current account product. This account is diaphanous from the wadiah current account in which the payment of dividend to customers is at the fasten discretion of the bank. In this mudharabah current account, customers have right to mountain any profits generated in proportion to a pre-agreed proportionality by both parties at the point of...If you want to add a full essay, order it on our website: OrderCustomPaper.com

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