Mudarabah is a partnership between two parties where one party (Fund Provider, Investor) providing a specified amount of capital, and the Mudarib (Fund Manager/ CLC IBD), mange the funds with a view to earn profit. It is a special kind of partnership where one partner gives money to another for investing in Shari’ah compliance businesses. The earned profit will be divided between the investor and the Mudarib at a pre-determined profit sharing ratio that has been agreed by both parties. CLC Islamic Business Division offers a range of ethical Shari’ah compliant Investment options described as per below.
With a “Wakala” Fixed Term investment, a master “Wakala” agreement is signed between the Investor and the CLC IBD. The investor appoints IBD as an agent in order to invest in “Sharia’ah” compliant investments on his or her behalf at a mutually pre-agreed profit rate, to be paid monthly or annually or along with the principal on maturity. If the agent managed to conclude a surplus (higher than agreed profit rate), he may retain it as an incentive as agreed on the Wakala Agreement.
Note: Minimum investment value for Wakala – Rs. 5Mn onwards.