AlHuda-Centre of Islamic Banking and Economics (CIBE) is a well known name in Islamic Banking and Finance sector which focuses on training, awareness, advisory and publications on Islamic Banking & Finance in order to promote the industry. AlHuda CIBE has organized a successful Conference "3rd Global Islamic Microfinance Forum" held on 6th & 7th October, 2013 in Dubai. AlHuda CIBE is very much pleased to share the topics and presentations being held in the Forum.
An authentic and comprehensive presentation on Musharaka - the Islamic Finance instrument. The presentation covers the classic fiqh aspects of Shirqat and also Musharaka as we know it in Islamic banking parlance today.
An authentic and comprehensive presentation on Musharaka - the Islamic Finance instrument. The presentation covers the classic fiqh aspects of Shirqat and also Musharaka as we know it in Islamic banking parlance today.
This is an authentic presentation on the fiqh and practical applications of the Islamic financial instrument of Mudarabah. This is compiled from authentic sources and is relevant especially against the backdrop of Islamic banking.
The concept of musharakah and mudarabah envisaged in the books of Islamic Fiqh generally presumes that these contracts are meant for initiating a joint venture whereby all the partners participate in the business right from it’s inception and continue to be partners upto the end of the business when all the assets are liquidated . One can hardly find in the traditional books of Islamic Fiqh the concept of a running business where partners join and leave the enterprise without affecting in any way the continuity of the business. Obviously, the classical books of Islamic Fiqh were written in an environment where the large scale commercial enterprises were not in vogue and the commercial activities were not so complex as they are today. Therefore, they did not generally dwell upon the question of such a running business.
The group presentation is telling about the general description on Al Mudharabah (profit sharing partnership) transaction, which is classified under one of the Islamic Banking transactions.
This is an authentic presentation on the fiqh and practical applications of the Islamic financial instrument of Mudarabah. This is compiled from authentic sources and is relevant especially against the backdrop of Islamic banking.
The concept of musharakah and mudarabah envisaged in the books of Islamic Fiqh generally presumes that these contracts are meant for initiating a joint venture whereby all the partners participate in the business right from it’s inception and continue to be partners upto the end of the business when all the assets are liquidated . One can hardly find in the traditional books of Islamic Fiqh the concept of a running business where partners join and leave the enterprise without affecting in any way the continuity of the business. Obviously, the classical books of Islamic Fiqh were written in an environment where the large scale commercial enterprises were not in vogue and the commercial activities were not so complex as they are today. Therefore, they did not generally dwell upon the question of such a running business.
The group presentation is telling about the general description on Al Mudharabah (profit sharing partnership) transaction, which is classified under one of the Islamic Banking transactions.
Mudarabah is a special kind of partnership where one partner providers the capital (rabb-ul-maal) to the other (mudarib) for investment in a commercial enterprise.
AlHuda Center of Islamic Banking and Economics (CIBE) is a well established name in Islamic Banking and Finance with state-of-the-art advisory, consultancy, education, training, research and product development services. AlHuda CIBE has organized number of international customized training workshops on Islamic Banking and Finance to build the capacity of young Islamic finance professionals. As a matter of fact that Pakistan keeps enough potential for the growth of Islamic Banking and Finance, AlHuda CIBE is going to organize Training workshop on Islamic Banking for capacity building in Islamic Banking Professionals.
Uzbekistan Lessor Association (ULA) signed a Memorandum of Understanding (MoU) with AlHuda Center of Islamic Banking and Economics (CIBE), to implement promote Islamic leasing business in the country with the help of its association members.
AlHuda CIBE is going to organize "Three Days Specialized Training Workshop on Islamic
Banking, Takaful and Islamic Microfinance" on 17 - 18 June, 2019 at Tajikistan
AlHuda CIBE is pleased to announce Islamic Finance prestigious Training series in USA Titled: “Islamic Banking & Finance- 26-27 June, 2019 at Washington, DC” and “Islamic Finance & Islamic FinTech- 29-30 June, 2019 at San Francisco, USA”.
AlHuda CIBE is going to organize "Global Takaful Forum" on August 26, 2019 at Istanbul - Turkey.
The objective of the event is to provide adequate knowledge and benefits of Takaful industry to the relevant market. The platform will help analyzing the problems hindering rapid development of Takaful worldwide that would surely help increasing financial inclusion.
CIS Islamic Banking and Finance Forum Auspiciously Concluded in Tashkent.
CIS Islamic Banking and Finance Forum was successfully concluded in Tashkent-Uzbekistan, yesterday. The purpose of that forum was to promote, strengthen and unite the Islamic Banking and Finance industry of the CIS countries, the theme of the forum was “CIS as new destination for Islamic Finance” which also addressed financial inclusion, fintech, Sukuk, Takaful, Islamic capital markets Islamic Microfinance, potential and opportunities of Islamic finance in CIS countries. Distinguished Speakers and industry experts from well serving organizations related to Islamic banking and finance, Islamic insurance (Takaful), and banking industry participated in the event. The aim of the forum was also to discuss the potential of Islamic finance in CIS countries, Investment avenue’s, FinTech, Sukuk, Takaful and Islamic capital markets by gathering stakeholders under one roof. The forum was organized by AlHuda Centre of Islamic Banking and Economics in partnership with multilateral organization Islamic Corporation for Development of Private Sector (ICD) – Islamic Development Bank (IsDB), Uzbekistan Bank Association.
AlHuda CIBE is going to organize "CIS - Islamic Banking and Finance Forum" on 02 May, 2019 along with "Two days post event workshop on Islamic Banking, Takaful and Islamic Microfinance" on May 03 – 04, 2019 at Tashkent, Uzbekistan
AlHuda CIBE is going to organize "Two Days Specialized Training Workshop on Islamic Banking and Finance" on June 20 – 21, 2019 at London, United Kingdom
AlHuda CIBE is going to organize "Three Days Specialized Training Workshop on Islamic
Banking, Takaful and Islamic Microfinance" on 21 - 23 March, 2019 at Dakar, Senegal
AlHuda Centre of Islamic Banking and Economics (CIBE) is a recognized name in Islamic banking and finance Market for trainings, research and advisory over the last 13 years. The prime goal has always been to remain stick to the commitments and provide state-of the-art Advisory Consultancy and Education through various well recognized modes viz. Campus programs, Distance learning programs, Trainings Workshops, Awareness Programs and Islamic Microfinance Products Development all side by side through our distinguished and generally acceptable and known Publications in Islamic Banking and Finance. We are dedicated to serve the community as a unique institution providing trainings, education and consultancy in the field of Islamic Banking & Finance not only in Pakistan but all over the world. We have so far organized more than 300 trainings, 32 successful campus programs and training courses with numerous national and international students.
AlHuda CIBE is pleased to announce its upcoming event the "African Interest-free Banking and Finance Forum" on 6th February, 2019 followed by Post Event Workshop “Interest-Free Banking & Finance, Insurance & Microfinance” on 7th - 8th February, 2019 at Addis Ababa, Ethiopia. The aim of this forum is to address the latest trends, challenges, and opportunities in Finance Industry of Africa.
The aim of this forum is to address the latest trends, challenges and opportunities in Islamic Financial Industry of Africa. This forum will also give an opportunity to all the institutions, organizations and professional to network and exchange business ideas.
AlHuda CIBE going to organize Two days specialized training workshop on Islamic Banking & Finance in Azerbaijan
E: info@alhudacibe.com
http://www.alhudacibe.com/conference2018/
AlHuda CIBE going to organize Two days specialized training workshop on Islamic Banking & Finance on 06-07 September, 2018 at London - United Kingdom
E: info@alhudacibe.com
http://www.alhudacibe.com/conference2018/IBFUK/
AlHuda CIBE going to organize Two days specialized training workshop on Islamic Banking, Finance and Islamic Microfinance at Philippines on 04-05 October, 2018
E: info@alhudacibe.com
http://www.alhudacibe.com/conference2018/IBIMFPH/
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If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
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how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
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how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
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What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
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This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
4. Scope of the Presentation
Terminology of Musharaka
Types of Musharaka
Structure of Musharaka
Rules of Musharaka
Capital;
Profit and loss;
Termination
Security / Collateral in Musharaka
Concept of limited liability
Modern partnerships
Case in point
5. MEANING OF SHAIRKAT
The literal meaning of Musharakah is sharing.
The root of the word "Musharakah" in Arabic is
Shirkah, which means being a partner.
Under Islamic jurisprudence, Musharakah
means a joint enterprise formed for conducting
some business in which all partners share the
profit according to a specific ratio while the loss
is shared according to the ratio of the
contribution.
6. LEGITIMACY OF SHIRKAT
AllahSubhanao-Ta’ala
has
declared that He becomes a party
in
a
business
between
two
Musharakain until one indulges in
cheating
or
breach
of
trust
(Khayanah)
with
other
in
Musharakah.”
(Sunan-i-Abi
Daud,
Kitabul Buyuo)
8. Shirkat-ul-Milk (Joint ownership)
•
•
Joint ownership of two or more persons in
a particular property/ asset with out any
business intention.
This comes into being as a result of joint
purchase, joint acceptance of gift or a
bequest and inheritance of joint property
etc.
9. Types of Shirkat-ul-Milk
Shirkat-ul-Milk Optional (Ikhtiari)
This comes into operation through the act of
parties e.g., purchase of asset with mutual
consent.
Shirkat-ul-Milk
Compulsory
(Ghair
Ikhtiari)
This comes into operation without any action
on the part of parties e.g., ownership of heirs
on the inherited property.
10. Shirkat-ul-Aqd
(Joint venture/partnership).
Shirkat-ul-Aqd or Contract Partnership is
an Agreement between two or more
parties to combine their assets or to
merge their services or obligations and
liabilities with the aim of making profit.
It can also be referred to as a joint
commercial enterprise or activity
11. Difference between
Shirkat-ul-Aqd and Shirkat-ul-Milk
In Shirkat ul Aqd both parties create
partnership for sharing profit earned by
Shirkah asset, while in Shirkat ul milk both
partners do not intend to earn profit from
Shirkah asset.
In Shirkat ul Aqd, each partner is an agent of
others while in Shirkat ul Milk each partner is
stranger with respect to other’s share.
13. Shirkat-ul-Amwal
Where all the partners invest some capital
into a commercial enterprise and share its
profits according to agreement.
14. Shirkat-ul-Aamal
Where all the partners jointly undertake to
render some services for their customers, and
the fee charged from them is distributed among
them according to an agreed ratio.
For example, if two persons agree to undertake
tailoring services for their customers on the
condition that the wages so earned will go to a
joint pool which shall be distributed between
them
15. Shirkat-ul-Wujooh
Where the partners have no investment at
all, they purchase commodities on
deferred price by their goodwill and sell
them on spot. Their capital is their credit
worthiness and reputation.
16. Types of Shirkat-ul-Aqd
All the three are further divided in to two types:
Shirkat-ul-Amwal
Shirkat-ul-Mufawadah
Shirkat-ul-Aamal
Shirkat-ul-Wojooh
Shirkat-ul-Inan
17. Subdivision of Shirkat-ul-Aqd
1-Shirkat-ul-Mufawadah:
Where capital, profit, loss and management are
equal among the partners.
2-Shirkat-ul-Inan :
Partners’ share capital, management, profit and
risk are not equal and may differ for each
partner. This is common type of partnership.
19. Rules of Shirkat-ul-Milk
Each partner is a stranger with respect to the
share of the others.
The partners are not allowed to undertake any
act of disposal with respect to the other’s share
except with the latter’s permission.
Each partner can sell his own share without
the other partners’ consent, except in cases
where share of one partner can not be
distinguished from the other.
20. Rules of Shirkat-ul-Milk
Profit & loss will be according the ratio of
ownership.
Expenses related to ownership will be borne
by all partners according to the ratio of
ownership.
Every partner has the right to sale/gift/lease to
the extent of his share.
One partner can promise to purchase the
share of other partner at any price, may be at
face value, market value or pre-agreed price.
21. Shirkat-ul-Ammwal
Definition:
It is an agreement between two or more
persons to invest a sum of money in a
business and share its profits according to
agreement. The investment of this
partnership consists of capital contributed
by the partners.
22. SHIRKAT-UL- AMWAL:
Capital of Musharakah
It should be known, ascertained and available at the
time of contract.
The value should be agreed upon in case of kinds;
Capital paid in different currencies should be valued into the
currency of Shirkah;
Capital advanced by the parties. Should be uniform
(currency of partnership).
Share capital in a Musharakah can be contributed
either in cash or in the form of commodities
In the letter case the market value of the commodities
shall determine the share of the partner in the capital.
23. Capital of Musharakah
Capital of partnership is Amanat in the
hands of partners. If loss occurred due to
negligence, the partner responsible for
loss, will compensate the loss.
24. Management of Musharakah
Each partner has right to take part in Musharakah
management.
The partner may appoint a managing partner by mutual
consent.
One are more of the partners may decide not to work for
the Musharakah and work as a sleeping partner.
It is not allowed to specify a fixed remuneration to a
partner Musharaka who manages funds or provides
some form of other services, such as accounting;
However, it is permissible to give him a greater share of
profit than he would receive solely on the basis of his
share in the partnership capital;
25. Distribution of Profit
The ratio of profit distribution must be agreed at
the time of execution of the contract.
It is not necessary for sharing profit according to
proportionate capital contribution;
It is not allowed to defer the determination of
profit until realization of profit.
The ratio must be determined as a proportion
on the actual profit earned by the enterprise.
1.
2.
Not as percentage of partner’s investment.
Not in lump sum amount.
It is not allowed to defer the determination of profit
until realization of profit.
A sleeping partner cannot share in the profit more than
the percentage of his capital.
26. Rules of Profit
Determination/Distribution
No guarantee can be given by the partners for the
payment of profit or capital.
Different partners may be given different weightings
according to amount and period of their investment.
Tiered profit sharing ratios can also be agreed.
•
Profit ratio can either be fixed or variable according to the
tiers;
Both partners can agree that first 6-month profit e.g.
will be distributed at ratio of 50% : 50% and next 6month profit will be distributed at ratio of 30% : 70%.
27. Rules of Loss
Determination/Distribution
Sharing of Loss:
As a matter of principle the loss has to be shared according to
the ratio of capital contribution;
Partners are not allowed to adopt any other mechanism except
the mechanism that ensure distribution of loss among partners
on pro rata basis;
Any other arrangement, even agreed upon by partners, will be
invalid and void.
It is not allowed to hold one partner or group of partners liable
for entire loss.
28. Guarantees in Shirkah Contracts
- All partners in Shirkah maintain the assets of the partnership as a
trust.
- No one is liable except in cases of breach of the contract, misconduct
or proven negligence.
- Negligence will be considered to have occurred in any of the
following three cases:
(i) A partner does not abide by the terms and conditions of the contract;
(ii) A partner works against the norms of the concerned business; and
(iii) The established ill-intention of a partner.
- The profit or even capital of any partners cannot be guaranteed by the
co-partners.
- One partner can demand from another partner to provide any surety,
security or pledge to cover the case of misconduct and negligence.
29. Rules of Musharakah – termination
Musharakah terminates in any of the following event:
Death of a partner during the Musharakah;
Heirs of the deceased partner have option either to draw the share
of the deceased from the business, or to continue with the contract
of Musharakah;
If any one of the partners becomes insane or otherwise becomes
incapable of effecting commercial transactions, the Musharaka
stands terminated.
In normal course of business, every partner has a right to terminate the
Musharakah at any time after giving notice to other partner;
In this case, if all the assets of the Musharakah are in cash form then
they will be distributed pro rata between the partners;
In case they are mixed assets the partners may agree either on:
Physical distribution of the assets among partners; or
Liquidation of the assets in open market (market price); or
Internal liquidation i.e. purchasing from one partner share of other at
any agreed price between them;
30. Rules of Musharakah – termination
with one partner
In case a partner wishes termination of the Musharakah, while
others do not, this can be achieved by mutual consent;
The partners who wish to run the business may purchase the share
of the other partner who wants termination;
The reason is that the termination of Musharakah with one partner
does not imply its termination between other partners;
However, in this case, the price of the share of the leaving partner
has to be determined by mutual consent;
In case of dispute on the valuation of the share the leaving partner
may compel other partners on the distribution of the assets;
However, if they are not divisible then the partner may an arbitrator
to solve the dispute;
31. Musharakah – application
Musharakah
is
top
preferable
mode
of
financing
recommended by Islam;
It one of the important factors that help in achieving ‘distribution of
wealth’ which is a key feature of Islamic financial and economic
system;
As Mudarabah, Musharakah is also not a vastly practiced Islamic
mode of financing by Islamic IMFs due to certain reasons;
However, Musharakah could easily be used as a vast mode
of financing for almost every financial need;
Below are some fields where this mode can easily be
applied:
Long-term Finance;
Running Finance (limited scope);
Investment IMFing;
Project Financing;
Private Equity Investment;
Redeemable capital investment.
34. Scope of the Presentation
Definition
Mudaraba Capital
Profit / Loss Distribution
Types of Mudaraba
Capacities of Mudarib
Participation from Mudarib
More than one Rabbul Maal
Termination of Mudaraba
Mudaraba Vs Musharakah
Problems and risks
35. Mudaraba Introduction - Definition
“Mudaraba” is a kind of partnership where
one partner gives money to another for
investing in profitable avenues.
The investor (fund supplier) is called
“Rabb-ul-Mal” ( ) رب اﻟﻤﺎﻝwhile the person
who utilizes this fund (the fund manager)
is called “Mudarib” ( ) ﻣﻀﺎربwho is
exclusively responsible for management of
the business.
36. Types of Mudaraba
• Al Mudarabah Al Muqayyadah (Restricted Mudarabah)
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.
• Al Mudarabah Al Mutlaqah (Unrestricted Mudarabah)
Rab-ul-Maal gives full freedom to Mudarib to undertake
whatever business he deem fit.
Mudarib is authorized to do anything normally done in
the course of business.
37. Capacities of Mudarib
Mudarib has different capacities for which
rules are different. Listed down are his
roles:
Ameen (trustee):
Mudarib holds money and assets of Mudarabah as trustee;
Therefore, he is responsible for management of assets honestly;
In case of actual loss he is responsible for nothing;
Wakeel (Agent):
Mudarib manages Mudarabah as an agent of owner;
Therefore his actions are considered as of Rabbul Maal;
Actual loss is born by Rabbul Maal in case it happens;
Shareek (partner):
Mudarib becomes partner in the profit that Mudarabah generates;
38. Capacities of Mudarib
Zamin (liable/guarantor):
In situation of loss due to misconduct / negligence
Mudarib has to bear it;
Ajeer (employee):
Mudarib gets a fee if Mudarabah becomes void
due to any reason;
39. Mudaraba Introduction – Mudaraba
capital
Mudaraba Capital:
The capital of Mudaraba should be in form of known cash as a
matter of principle;
However, tangible assets could also be accepted if valued with
mutual consent.
In such case the determined value of the assets will be the
Mudaraba capital;
The Capital of Mudaraba should be clearly known to the
contracting parties and defined in terms of quality and quantity;
The capital should be in hand, therefore, receivables (debt etc.)
can not be capital of Mudaraba;
40. Mudaraba Introduction – Mudaraba
capital
Mudaraba Capital:
The capital should be handed over to Mudarib;
Simple segregation of funds for Mudaraba is not
enough;
Therefore, increase in value of Mudaraba capital
before start of Mudaraba will account for increase in
Mudaraba capital and will not be treated as Profit;
41. Mudaraba Introduction - profit &
loss distribution
Profit and Loss distribution:
The Mudaraba contract should mention profit sharing ratio in
defined and clear terms;
The profit sharing ratio should be:
specific;
of the expected profit;
Apart from the agreed proportion of the profit, the Mudarib cannot
claim any periodical salary or a fee or remuneration for the work
done by him for the Moradabad.
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.
42. Profit & Loss Distribution
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 Raab-ul-Maal or vice versa.
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 profit, if any, shall be distributed between the
parties according to the agreed ratio.
43. Mudaraba – participation from
Mudrib
Mixing of funds by Mudarib
The basic feature of Mudaraba is that the Mudarib performs only
business operations and does not add capital;
The capital is provided by Rabbul Maal and the Mudarib is
responsible for the management only;
But the Mudarib may also add capital into the business of Mudaraba
with permission of Rabbul Maal;
In such cases Musharaka and Mudaraba are combined;
For example, “A” gave to “B” Rs.100,000/- in a contract of
Mudaraba. B added Rs. 50,000/- from his own pocket with the
permission of A;
This type of partnership will be treated as a combination of
Musharaka and Mudaraba;
Here the Mudarib may allocate for himself certain percentage of
profit as partner (Sharik), and at the same time he may allocate
another percentage for his management and work as a Mudarib.
44. Mudaraba – more than one Rabbul
Maal
Mudaraba can be between two prsons: Rabbul Maal and
Mudarib;
But Rabbul Maal may also be more than one;
If a Mudaraba starts by provision of funds from one
Rabbul Maal and after the start Mudarib wishes to add
some more funds from others, this would be allowd if
Rabbul Maal permits;
In such case all funds providers (Rabbul Maals) are
partners among themselves;
The share for Rabbul Maal will be divided among them
as per their contribution ratio;
45. Mudaraba – termination
Termination of Mudaraba:
The contract of Mudaraba can be terminated at any time by either of the
parties;
This termination should be with consent of concerned parties;
A notice to the other party is also sufficient if it was agreed at the time of
inception of Mudaraba;
Termination of Mudaraba means that the Mudarib cannot purchase new goods
for the Mudaraba. However, he may sell the existing goods that were purchase
before termination.
If all assets are in form of cash and some profit has been earned on the
principle amount, it shall be distributed between the parties according to the
agreed ratio;
If the assets of the Mudaraba are in other form the Mudarib shall be given an
opportunity liquidate them and the actual profit may be determined after
liquidation:
If there is a profit, it will be distributed between Mudarib and Rab-ul-Maal.
If no profit is left, Mudarib will not get anything.
46. Mudaraba Vs Musharaka
. Mudaraba:
1. The contribution comes
from Rabbul Maal (the
investor);
2. The
Rabbul
Maal
(investor) is not permitted
to manage the business;
3. The Mudarib manages
the business only;
4. The Mudarib can also
invest in the capital of
Mudarabah.
Musharaka:
1.
The contribution comes
from all partners in form of
cash,
commodities,
services or liability in case
of reputation partnership;
2.
The work, as a general
rule, is to be done jointly
by the parties;
3.
A
partner
or
some
partners may be sleeping;
47. Mudaraba – application
Scope of Mudaraba for IMF System:
Mudaraba
is
second
recommended by Islam;
preferable
mode
of
financing
It helps in achieving ‘distribution of wealth’ which is a key
feature of Islamic financial and economic system;
Mudaraba as a mode of financing used by Islamic IMFs for the
following purpose:
Relationship of Islamic IMFs with depositors, depositors
provide deposits to IMF as Rabb-ul-Mal, these deposits are
to be invested by Islamic IMF as Mudarib;
Islamic IMFs sometimes use Mudaraba with some of their
customers;
Islamic IMF provides the adequate finance as a capital
owner in exchange of a share in the profit to be agreed
upon;
Mudaraba can be easily used for Large Enterprise financing;
Project Finance
Mudaraba basis;
does
have
potential
for
financing
on
48. Mudaraba – IMF application
Asset side:
Short / medium / long term financing;
Project financing;
Small and medium enterprise setup financing;
Large enterprises setup financing;
Import financing;
Import bills drawn under import Lcs;
Inland bills drawn under inland Lcs
Bridge financing;
LC without margin;
Export financing;
Working capital financing;
Running accounts financing/ short term advances.
49. Mudaraba & Musharakah on
Liability side
Liability
side:
All types of saving / investment accounts;
Inter- bank acceptance and placement;
Term Finance certificates;
Certificate of investment;
Special rate deposits;
Calculation is attached.
50. Problems and Risks for Islamic
IMFs
Problems and Risks for Islamic IMFs:
Since Mudaraba is a profit and loss sharing way of
financing, it is considered a high risk financing activity;
Collateral can be asked but could not be used in case
of real loss;
IMF’s existing competencies in project evaluation and
related techniques are limited;
Dual book keeping trends in market also a threat;
Legal mechanism for treatment with Mudarabah as a
mode of financing by Islamic IMFs, is not in place;