Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks
While it is generally ensured in equity based Islamic banking facilities that the profit sharing ratio is fixed at the inception of the contract, certain measures are seen to be adopted sometimes, that result in affecting the mechanism of profit sharing. These include reserving at the outset of the...
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| Format: | Proceeding Paper |
| Language: | English |
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Zes Rokman Resources
2018
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/69043/ http://irep.iium.edu.my/69043/1/69043_Prior%20agreement%20on%20revising%20the%20profit%20sharing.pdf |
| _version_ | 1848787045795758080 |
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| author | Sadique, Muhammad Abdurrahman |
| author_facet | Sadique, Muhammad Abdurrahman |
| author_sort | Sadique, Muhammad Abdurrahman |
| building | IIUM Repository |
| collection | Online Access |
| description | While it is generally ensured in equity based Islamic banking facilities that the profit sharing ratio is fixed at the inception of the contract, certain measures are seen to be adopted sometimes, that result in affecting the mechanism of profit sharing. These include reserving at the outset of the contract the option to alter the profit sharing ratio before the finalisation of the venture. The paper analyses a provision envisaging the possibility of adjusting the profit sharing ratio prior to liquidation of the partnership, with reference to accepted Islamic legal sources. It argues that such a provision does not seem appropriate in the prevalent environment of interest based banking, as it could become a means of defining the return of a partner, similar to interest based facilities. Introduction of such measures should be subject to careful assessment and revision by relevant bodies so as to avoid their harmful effects. |
| first_indexed | 2025-11-14T17:18:42Z |
| format | Proceeding Paper |
| id | iium-69043 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T17:18:42Z |
| publishDate | 2018 |
| publisher | Zes Rokman Resources |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-690432019-01-31T08:13:43Z http://irep.iium.edu.my/69043/ Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks Sadique, Muhammad Abdurrahman HB126.4 Islamic Economics HF5601 Accounting. Bookkeeping HG3368 Islamic Banking and Finance KBP639 Muʻāmalāt While it is generally ensured in equity based Islamic banking facilities that the profit sharing ratio is fixed at the inception of the contract, certain measures are seen to be adopted sometimes, that result in affecting the mechanism of profit sharing. These include reserving at the outset of the contract the option to alter the profit sharing ratio before the finalisation of the venture. The paper analyses a provision envisaging the possibility of adjusting the profit sharing ratio prior to liquidation of the partnership, with reference to accepted Islamic legal sources. It argues that such a provision does not seem appropriate in the prevalent environment of interest based banking, as it could become a means of defining the return of a partner, similar to interest based facilities. Introduction of such measures should be subject to careful assessment and revision by relevant bodies so as to avoid their harmful effects. Zes Rokman Resources 2018-12-22 Proceeding Paper PeerReviewed application/pdf en http://irep.iium.edu.my/69043/1/69043_Prior%20agreement%20on%20revising%20the%20profit%20sharing.pdf Sadique, Muhammad Abdurrahman (2018) Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks. In: 17th Kuala Lumpur International Business, Economics and Law Conference 2018 (KLibel), 22nd-23rd December 2018, Putrajaya. http://www.klibel.com |
| spellingShingle | HB126.4 Islamic Economics HF5601 Accounting. Bookkeeping HG3368 Islamic Banking and Finance KBP639 Muʻāmalāt Sadique, Muhammad Abdurrahman Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks |
| title | Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks |
| title_full | Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks |
| title_fullStr | Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks |
| title_full_unstemmed | Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks |
| title_short | Prior agreement on revising the profit sharing ratio during the tenure of the contract in Musharakah and Mudarabah of Islamic banks |
| title_sort | prior agreement on revising the profit sharing ratio during the tenure of the contract in musharakah and mudarabah of islamic banks |
| topic | HB126.4 Islamic Economics HF5601 Accounting. Bookkeeping HG3368 Islamic Banking and Finance KBP639 Muʻāmalāt |
| url | http://irep.iium.edu.my/69043/ http://irep.iium.edu.my/69043/ http://irep.iium.edu.my/69043/1/69043_Prior%20agreement%20on%20revising%20the%20profit%20sharing.pdf |