SYARIAH CONCEPT IN ISLAMIC BANKING

(PROFIT-SHARING CONTRACT)

Profit from the outcome of the

DEFINITION
A form of partnership between
one who provides funds (Rabbul
Mal) and the other who provides
management expertise
(Mudarib)
venture is shared between two
parties according to mutually agreed
profit sharing ratio
Financial losses are borne by the
owner of capital (Rabbul Mal) that
such losses are not due to the
Mudarib's misconduct, negligence or
breach of specified terms

MUDARABAH
CAPITAL
CONCEPT

The capital shall be

contributed by the capital
provider and shall be managed
by the manager to generate
Owner of TRUST ENTREPRENEUR income.
(expertise)
capital

The capital of Mudarabah may
be in the form of monetary or
non-monetary assets.
Monetary assets of different
PROFIT / LOSS currencies shall be valued
according to an agreed

currency at the time of signing
loss
the Mudarabah contract

TYPES OF
MUDARABAH

AL MUQAYYADAH AL MUTLAQAH
(RESTRICTED MUDARABAH) (UNRESTRICTED MUDARABAH)

Owner of capital (Rabbul Mal) may Owner of capital (Rabbul Mal)

specify a particular business or gives a full freedom to
particular place for the entreprenuer (Mudarib) to
entreprenuer (Mudarib) undertake whatever business he
deems fit.

NATION OF MUDARA
RMI BAH
TE
Mudarabah can be terminated any time by either of the two
parties by giving notice.

If Mudarabah was for a particular term, it will terminate at the

end of the term

Termination of Mudarabah means that the Mudarib cannot

purchase new goods for the Mudarabah. However, he may sell
the existing goods that were purchased before termination.
 SYARIAH CONCEPT IN ISLAMIC BANKING

(Cost-plus Financing)

DEFINITION The bank will purchase the goods

that is wanted by the customer
Sell of goods at a price which includes and sell the goods at a higher
a profit margin which have been price
agreed by both parties (including the profit margin)
(the seller and the buyer)
Buyer will make payment at a
single amount

COMPONENTS OF MURABAHAH
Seller
Price
Contracting Parties
01 The contracting parties shall have the
legal capacity to enter into the murabahah Buyer
contract.

Sighah
Asset
Asset to be traded in a murabahah
contract shall the asset is recognised by
02
the Shariah, valuable, identifiable and
Merchandise
deliverable. or goods

PILLARS
Price
03 The price and the currency used shall be
OF MURABAHAH
determined and mutually agreed at the
time of entering into the murabahah
contract.

ES OF MURABAHAH AG
RUL REE
IC ME
AS Conditional sale:
NT

A condition which is the requirement of

sale (Valid).
Reasonable condition for the safety of
Subject matter (Valid).

Unreasonable condition but in

accordance with

normal market practice (Valid).

A condition that is Against the
requirement of sale, not in accordance
with the market practice Beneficial for
the seller or purchaser (void)

Condition Expenses of
of Murabahah
Subject matter

Price of Murabahah

URABAHAHAH CO TYPES OF MURABAHAH

ES OF M NTR
AG AC
ST T

Ordinary Murabahah Sale

Promise stage Agency stage Two parties : the seller and the buyer, where the seller as an
ordinary trader purchases the goods from the market
without depending on any order and promise to buy the
STAGES same from him and sells those to a buyer for cost plus profit.
OF
MURABAHAH

Acquiring
Murabahah based on Order and
Possession Execution Promise

Three parties: buyer, seller and the Bank as an intermediary

trader where the Bank upon receipt of order from the buyer
with a prior outstanding promise to buy the goods from the
Bank, purchases the ordered goods and sells those to the
ordering buyer at a cost plus agreed profit.