Mudaraba Short Term Deposit

Mudaraba Short Term Deposit (MSTD) is a profit bearing Mudaraba deposit intended for those customers who are involved in business or whose transactions are frequent but does follow a pattern, enabling them to operate a kind of Current Account which incurs profit. Like in other Mudaraba deposit products, the depositor acts as the capital supplier of the investment and the Bank acts as the investor/mudarib. Here, profit is calculated on daily basis and accrued on half yearly interval.  

In Mudaraba Deposit products the Bank as the investor declares a provisional rate of profit to be given to the depositors every year. Then after year end the total investment profit is calculated and distributed as per yearly declared ratio, which is currently 70% (Depositor) : 30% (Bank). From the actual portion of profit the actual rate of profit is calculated for each Mudaraba product of the Bank. The actual rate of profit usually differs with the provisional rate. If the actual rate is lower than that of the provisional rate then it is said to have incurred loss otherwise profit is made.

The following types of Mudaraba Short Term Deposit (MSTD) accounts are operated in our Bank.

01.

Individual/Joint Current Account

02.

Proprietorship/Firm Account

03.

Partnership/Firm Account

04.

Private Limited Co. Account

05.

Public Limited Account

06.

Club/Society/School/College & Trustee Account

Some Important features of Mudaraba Short Term Deposit

01.

This is a profit and loss bearing product.

02.

Profit is calculated on daily basis and credited on half yearly basis using the provisional rate of profit.

03.

After year end the accounts are adjusted with actual rate of profit. If the actual profit rate is greater than that of provisional then the extra profit is credited to the accounts or to sundry account if any account has closed during the year. In case where the actual rate is lower than the provisional rate the loss amount is debited from the client’s account or notice can be send to the client to rebate the loss amount if the account is closed during the year.

04.

After profit is being credited to accounts income tax is deducted / debited from the accounts. The rate of income tax is 10%.

05.

Depending on the amount of deposit there is a yearly excise duty to be charged on this type of account.

06.

There is also a specific amount of service charge, chargeable on half-yearly basis.

07.

As it is a cheque bearing product, all the rules associated with Negotiable Instrument Act applies.

Amount

Provisional Rate of 2007

Below Tk. One (1) crore

5.00%

Tk. One (1) crore and above but below Tk. Ten (10) crore

6.00%

Tk. Ten (10) crore and above

8.15%