islamic banking & financial services (isb 655

8/2/2019 Islamic Banking & Financial Services (Isb 655

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NAME MATRIC NO

1. NUR FAHEZZA BT MUSA 2010108559

2. NORFAJRINA BT ISMAIL 2010521411

3. SITI NORHASIMA BT MOHD YUSOF 2010126529

4. NURUL AIN BT MOHD ANUAR 2010730561

5. NURUL HANISS BT MANAB 2010127963

Prepared by:

Prepared for: Miss Mardziyana bt Maalom


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DEFINITION

TYPES OF MUDARABAH

LEGITIMACY OF A MUDARABAH

PILLARS & CONDITIONS OF MUDARABAH

DIFFERENCE BETWEEN MUDARABAH & MUSYARAKAHCONTRACT

TERMINATION OF A MUDARABAH CONTRACT


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Literally : derived from the phrase al-darb fi al-ard which meansto make a journey

Technically : is a kind of partnership where one partner givesmoney to another for investing in a commercialenterprise

The profit will be shared between them at a mutually ratio

If loss, it will be borne by the Rabbul-Mal (capital provider) and theMudarib will lose his efforts

This is a kind of partnership where one partner gives money toanother for investing in a commercial enterprise


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... And others who travel in the land seeking ofthe bounty of Allah

(73:20)

there is no blame on you in seeking bountyfrom your lord

(2:198)

but when the prayer is ended, they disperseabroad in the land and seek Allahs grace

(62:10)


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The Narration of Ibnu Abbas

Ibnu Abbas r.a. reported that:

When our leaderAbbas Ibn Abd al-Mutallib gives hisproperty to someone for Mudarabah, he stipulatedconditions for his partner not to bring the capital throughout thesea; and not to bring with him the capitalcrossing a valley; and not to buy livestock with the capital;and if his partner violates the conditions,he should guarantee the loss occurred. These conditions

have been brought to the attention of Prophet Muhammad(SAW) and he approved them. (Mujam Al-Awsat; Al-Tabrani)


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The Narration of Suhayb

Suhayb r.a. reported that the ProphetMuhammad (SAW) said:

Three matters that have the blessing (of

Allah): A deferredsale,Muqaradah (Mudarabah), mixingthe wheat with barley for domestic useand not for sale. (Sunan Ibn Majah).


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The Tacit Approval of the Prophet

Muhammad (SAW)

Mudarabah venture has being practisedbefore the Prophets (SAW) first

revelation and he did not raise or showany objections against the practice. Thisis considered a tacit approval by the

Prophet Muhammad (SAW).


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The Muslim jurists have reached Ijma amongthem upon conducting Ijtihad on thepermissibility of theMudarabah contract.

It has also been established that the companions of the Prophet Muhammad(SAW) such as Umar, Uthman, Ali, Abdullah Ibn Masud, Abdullah Ibn Umar, Ubaydullah Ibn Umar

and A`ishah have placed the property oforphans under theMudarabah contract with no objections fromother companions .


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PILLARS OFMUDARABAH

SUBJECTMATTER

CONTRACTINGPARTIESCONTRACT

(SIGHAH)


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CONDITIONS OFMUDARABAH

RELATED TO THECONTRACTING

PARTIES

RELATED TOSUBJECTMATTERS

RELATED TOSIGHAH


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Generally, the condition related to the

sighah of mudarabah is similar to those of

other contracts which constitute offer and

acceptance.

Offer is done by uttering the terms of

Mudarabah, Muqaradah or any terms tothat effect.

1. CONDITIONS RELATED TO SIGHAH

(IJAB & QABUL)


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Offer and acceptance can be doneverbally, in writing or through any means

of communication that is acceptable byboth contracting parties.


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Both Mudarib and Rabbul Mal must bequalified persons under the law.

(e.g: sound mind)


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a) Mudarabah capital

Shall be in the form of cash money.

Immovable or movable properties cannot serve

as the capital of mudarabah due to the fact thatthere is gharar(uncertainty).

Lead to a dispute (al-niza) between contractingparties.


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Ibn Abi Layla and Al-AwzaI are of the

opposite opinion. (the capital need not bein terms of cash money only);

i. The capital must be present during theconclusion of the contract.

ii. The capital must be determined in terms of

its value and be delivered to the mudarib.


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b) Mudarabah profit

i. The distribution of profit must be on the

basis of an agreed percentage of the profitand not on the basis of a lump sum or

percentage of capital.

- Although the ratio of profit must be fixed

upfront, it can always be changed orstructured on different tiers with mutual

consent of both mudarib and rabbul mal.


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ii. AAOIFI states in its Shariah Standard No. 13,Clause 8/2 - The mudarib cannot claim any

periodical salary or a fee or remuneration for thework done by him.

- It is permissible for the two parties to construct a

separate agreement independent of themudarabah contract, assigning one party toperform, for a fee, a business activity that is not bycustom part of the mudarabah operations.


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c) Labour of the contract

- The mudarabah contract can be divided,

from the work of the mudarib perspective,

into 2 categories:

Al-Mudarabah Al-Mutlaqah

Al- Mudarabah Al-Muqayyadah


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Al-MudarabahAl-Mutlaqah

The capital providerpermits the mudarib to

administer a mudarabahfund without restrictions.

The mudarib has a widerange of trade or business

freedom.

The Shafiiyyah & theHanabilah are the opinionthat the mudarib can onlyenter into this kind of act

with permission of therabbul mal.

Al- MudarabahAl-Muqayyadah

The capital providerrestricts the action of the

mudarib.


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Mudarib Rabbul mal

MudarabahCompany

Profit / LossFinancial loss is borne

byrabbul mal. Themudarib lost his effort

Distributed according to

agreed PSR

Profit

LOSS


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Mudarabah Musharakah


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Mudarabah Musharakah

Investment is the sole responsibilityof rabbul-mal (capital provider)

The investment comes from all thepartners

The rabbul-mal has no right toparticipate in the managementwhich is carried out bythe mudarib only

All the partners can participate inthe management of the businessand can work for it

The loss is suffered by the rabbul-mal only, because the mudaribdoes not invest anything

All the partners share the loss tothe extent of the ratio of theirinvestment

The liability of rabbul-mal islimited to his investment, unless hehas permitted the mudarib toincur debts on his behalf

The liability of the partnersin musharakah is normallyunlimited

All the goods purchased by themudarib are solely owned bythe rabbul-maal, andthe mudarib can earn his share in

the profit only in case he sells thegoods profitably

The partners mix up their capitalin a joint pool, all the assets of themusharakah become jointlyowned by all of them according

to the proportion of theirrespective investment


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Givenotice

Set atimelimit

Exhausted/sufferlosses

Death ofmudarib

Insanity


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If all assets of the Mudarabah are in cash format the time of termination, and some profit

has been earned on the principal amount, itshall be distributed between the partiesaccording to the agreed ratio.

If the assets of Mudarabah are not in cashform, they will be sold and liquidated so thatthe actual profit may be determined.


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If there is a profit, it will be distributedbetween Mudarib and Rab-ul-Maal.

If no profit is left, Mudarib will not getanything.


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