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Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
Al huda presentation on mudarbah by aamir malik
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Al huda presentation on mudarbah by aamir malik

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  • 1. THE CONCEPT OF MUDARBAH Aamir Malik Head of Product Development Present at : Post Diploma on Islamic Banking and finance Class
  • 2. <ul><li>This is a kind of partnership where one partner gives money to another for investing in a commercial enterprise. </li></ul><ul><li>The investment comes from the first partner who is called “Rabb-ul-Maal” ( Investor) while the management and work is an exclusive responsibility of the other, who is called “Mudarib” ( Working Partner) and the generated profits are shared in a predetermined ratio. </li></ul>Definition
  • 3. Types of Mudarabah <ul><li>Al Mudarabah Al Muqayyadah </li></ul><ul><li>(Restricted Mudarabah) </li></ul><ul><li>Al Mudarabah Al Mutlaqah </li></ul><ul><li>(Unrestricted Mudarabah) </li></ul>
  • 4. Al Mudarabah Al Muqayyadah (Restricted Mudarabah) <ul><li>In Al Mudarabah Al Muqayyadah, the Rabb-ul-Maal specify a particular business or a particular place to mudarib . </li></ul>
  • 5. Al Mudarabah Al Mutlaqah (Unrestricted Mudarabah) <ul><li>Rabb-ul-maal gives full freedom to Mudarib to undertake whatever business he deems fit, this is called Al Mudarabah Al Mutlaqah (unrestricted Mudarabah ) </li></ul>
  • 6. Profit & Loss Distribution <ul><li>Profit is clearly mentioned in contract in percentage not Lump sum or the percentage of capital. </li></ul><ul><li>It is not permissible to earn a share of profit in addition to a fee in Mudarbah contract. </li></ul><ul><li>consent of partners on profit distribution </li></ul><ul><li>it is permissible to amend the contract and set the duration of contract. </li></ul>
  • 7. <ul><li>If the profit ratio not decided at the conclusion of contract then </li></ul><ul><ul><ul><li>Custom practice </li></ul></ul></ul><ul><ul><ul><li>Equal distribution </li></ul></ul></ul><ul><ul><ul><li>Market Rate of Services </li></ul></ul></ul><ul><li>Demand of Lump sum Amount, contract will be void. </li></ul><ul><li>It is not permissible for the Capital Provider to provide two amount one for Mudarib and other for himself profit and financial period as well. </li></ul>
  • 8. <ul><li>It is not permissible to assign the profit of specific transaction. </li></ul><ul><li>Profit Distribution will be after the maintained Capital. </li></ul><ul><li>Loss is compensate first </li></ul><ul><li>If the total losses are greater then the total revenues, they will be deduct from capital and Mudarib receive nothing. </li></ul>
  • 9. <ul><li>Net profit is distribute </li></ul><ul><li>It is permissible for Mudarib to Invest capital in Mudarbah contract and also can enjoy the profit on share and Mudarib. </li></ul>
  • 10. Duties and Powers of Mudarib <ul><li>Best efforts to achieve goals </li></ul><ul><li>Mudarib is free to manage if the contract is unrestricted. </li></ul><ul><li>appointment of another person </li></ul><ul><li>Selection of market and places to minimize the risk. </li></ul><ul><li>funds are under custody of trustworthy person or institution. </li></ul><ul><li>Selling and buying on Deferred payments </li></ul>
  • 11. <ul><li>Minimization of risk </li></ul><ul><li>Custody of trustworthy place or person </li></ul><ul><li>Buying and selling on deferred basis </li></ul><ul><li>Restrictions on Mudarib by Rab ul Mall </li></ul><ul><li>it is not permissible for Rab ul Mall to stipulate Mudarib to act in Management but Mudarib can refer some activities. </li></ul>
  • 12. <ul><li>Capital Provider cannot lay down restriction on the action of Mudarib like the partnership of another party or to stipulate to invest his funds in Mudarbah contact. </li></ul><ul><li>Mudarib responsibilities are set in the contract and if one of them activity is out sourced </li></ul>
  • 13. <ul><li>Conversion of Mudarbah into Musharka </li></ul><ul><li>Mudarib can accept the funds from third party. </li></ul><ul><li>It is permissible for capital provider to place the restrictions on the action of mudrib (time, place, sectors,)but their availabity should be common. </li></ul><ul><li>Capital provider cannot stipulate on the right to work. </li></ul>
  • 14. <ul><li>Mudarib can assign some activities. </li></ul><ul><li>Capital provider can not impose the condition which restrict the movement of Mudarib like he or she must enter in Musharkah contract. </li></ul><ul><li>Mudarib cannot outsource liability. </li></ul><ul><li>Cannot sell the less than market price or buy on high price. </li></ul><ul><li>Loan or gift are not permissible </li></ul><ul><li>Living expenses but as per approval of capital provider. </li></ul>
  • 15. Liquidation of Mudarbah <ul><li>Non binding contract can be terminated unilaterally. </li></ul><ul><li>With the agreement of both parties </li></ul><ul><li>On the date of maturity </li></ul><ul><li>In case of losses </li></ul><ul><li>Death of Mudarib or the liquidation of institution acts as the Mudarib </li></ul>

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