Mudsasi

Mudharabah Background Mudharabah start out is a profit sharing contract amidst the entrepreneur and the capital provider. Mudharabah contract is applied in desex taking arrangement such as current describe, nest egg account and investment account. The contract is also applied in inter-bank investment and Muslim bonds. In takaful industry, mudharabah contract is used as one of the ope rational model as well as being applied for investing the takaful funds. Issues 1. Floating Islamic negotiable Instrument of Deposit (INID) Bank Negara Malaysia has put downd floating INID with the following mechanisms: i. A guest binds money into a bank; ii. The bank accepts nodes fasten and issues INID to the customer as an evidence of receiving deposit; iii. INID is tradable in the secondary market; iv. On maturity, the customer or holder of INID returns it to the bank and receives the principal value of INID and the declare dividend; and v. The stated dividend is from the profit derived from the investment of the deposit. The term floating refers to the characteristic of the produce that changes in value based on the dividend declared by the bank from time to time. The question is whether the investment mechanism mentioned to a higher place is in line with mudharabah principle.

Resolution The Council in its 3rd meeting held on 28th October 1997 / 26th Jamadil Akhir 1418 indomitable that Floating Islamic transportable Instrument of Deposit (INID) use mudharabah concept is permissible and tradable in the secondary market. 2. Mudharabah Current count There was a proposal from Islamic banking institution to introduce mudharabah current! account product. This account is antithetical from the wadiah current account in which the payment of dividend to customers is at the resole discretion of the bank. In this mudharabah current account, customers have right to administer any benefit generated in proportion to a pre-agreed ratio by two parties at the point of...

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