BANKING AFFAIRS

Detailed explanation-1: -Also known as mudarabah, modarabah, and modaraba. An Islamic finance technique in which a lender or investor (rab al maal) and a borrower or investment manager (mudareb) establish a profit-sharing partnership to undertake a business or investment activity.

Detailed explanation-2: -A Mudarabah is an Investment partnership, whereby the investor (the Sahibul Mal) provides capital to another party/entrepreneur (the Mudarib) to undertake a business/ investment activity. While profits are shared on a pre-agreed ratio, any loss of investment is born by the investor only.

Detailed explanation-3: -Basically, Mudarabah is defined as a profit-and-loss sharing principle applied normally to a business or commercial contract between the party that provides the fund or capital and the party that manages the business.

Detailed explanation-4: -equity-based profit and loss sharing methods within Islam known as mudaraba (trust financing), musharaka (participating finance), murabaha (cost plus trade financing) and sukuk (Islamic. bonds).