Islamic Finance and Banking

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Types of Mudaraba: There's types of Mudaraba, and they are mentioned below:

(one). Al Mudaraba Al-Muqayadah:

Rab'ul-Maal may specify a specific business or a specific place for the Mudaarib, in which case they will invest the funds in that particular business or place. This is called Al Mudaraba Al-Muqayadah (restricted Mudaraba).

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(two). Al Mudaraba Al Mutlaqah:

However if Rab'ul-Maal gives full freedom to Mudaarib to undertake whatever business they deems fit, this is called Al Mudaraba Al Mutlaqah (unrestricted Mudaraba). However Mudaarib cannot, without the consent of Rab'ul-Maal, lend funds to somebody. Mudaarib is allowed to do anything, which is normally completed in the work of business. However in the event that they require to have an strange work, which is beyond the normal technique of the traders, they cannot do so without express permission from Rab'ul-Maal. They is also not authorized to:

a) keep another Mudaarib or a partner

Conditions of Offer & Acceptance are applicable to both. A Rab'ul-Maal can contract Mudaraba with over person through a single transaction. It means that they can offer his funds to 'A' and 'B' both so that each of them can act for him as Mudaarib and the capital of the Mudaraba shall be utilized by both of them jointly, and the share of the Mudaarib.

b) mix his own investment in that particular Modarabah without the consent of Rab-ul Maal.



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