Investment platform, I-invest, has announced the launch of the Mudarabah Term Deposit (MTD) on its mobile application towards inclusive and faith-aligned investing.
Mudarabah, a revered Islamic financial concept, epitomises a partnership contract between an investor who provides capital and an investment manager.
This distinctive arrangement involves the capital provider entrusting funds for investment to be skillfully managed by the investment manager. The resulting profits are then shared based on a pre-agreed Profit-Sharing Ratio (PSR).
In the banking sector, Mudarabah has evolved into an investment product, offering a Shariah-compliant alternative to conventional fixed deposit products, aptly named Mudarabah Term Deposit (MTD). In this arrangement, customers act as investors, depositing funds into their accounts.
The profit sharing ratio is collaboratively determined by the parties, ensuring a transparent and mutually agreed-upon structure. The deposited funds are then strategically deployed to permitted investment sectors by the partner bank. At the end of the period, the gross profit is shared between the customer and the bank based on the predetermined sharing ratio.
