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Mudaraba: It
is partnership between two parties, the capital provider, the
depositor in this case and the provider of skill and labor, here the
bank. In Islamic terms the depositors are the “Shahib-Al-Maal” and
the Bank is “Mudarib”. In this kind of partnership the profit of
investment is divided as per agreed upon ratio and the loss is borne
by the provider of capital, the depositor in this case. According to
Banking laws depositors money should always be protected and be
deliverable on demand. Thus, Mudaraba mode of deposit, for profit
and loss, capital is not considered rather it is subject to the
projected profit rate. |
