Mudharabah Financing FAS3 and Shari'ah

Which of the following is not included as the legal basis of Mudharabah as per Shari'ah

• The Quran

• The Sunnah

• The practice of Muslim society before

• Practice of the pre-Islamic times

Which of the below are correct statements related to Mudharabah muqayyadah?

• It is similar to an unrestricted investment account in the conventional banking industry

• There are restrictions that are put in place by the mudharib

• It is considered as a fee based contract under the same category as a Wakalah

• None of the options are correct

What is the widest application of Mudharabah in the current islamic banking industry?

• For savings accounts and investment accounts

• For Islamic mutual funds

• For working capital financing

• For Islamic micro financing

Below are correct statements related to FAS 3 on Mudharabah Accounting, except:

• The standard applies when the bank is the provider of capital

• It is recognised as Mudharabah financing if capital was paid in cash on the asset side of the balance sheet

• Losses, in case of Mudarib negligence, shall be recognized as a loss born by the capital provider

• Disclose in the notes if bank has made provisions for decline in value of Mudaraba assets.

Below are the necessary conditions of Mudharabah as per the AAOIFI Shari'ah standards, except:

• Profit is shared according to ratio agreed upon. A fixed amount is not allowed.

• Sub-mudarabah is not allowed without the permission of the first capital provider.

• Mudarib may claim any periodical salary or a fee or remuneration for the business in addition to the profit sharing .

• The capital provider cannot intervene day-to-day business operation.