Case Study 4 Mudaraba For more case studies : http://ifinanceexpert.wordpress.com/ Dr.

. Faleel Jamaldeen An Islamic Commercial Bank has the following accounts with current available balances. Both the stockholders fund and investment account holder funds, pooled for investment purpose. The pool works based on Mudaraba contract. The bank is the Mudarib and the investment account holders and stockholders are rab al maal (investors) Fund contributors Stockholders Account holders Savings accounts Investment accounts 3 months Investment accounts 6 months Investment accounts 1 years Investment accounts 5 years Total Funds available Fund balances 270,000,000 900,000,000 650,000,000 475,000,000 245,000,000 220,000,000 2,760,000,000 Investment rate 100% 50% 60% 70% 80% 90%

The bank agreed with an investment account holders when opening the account to share the profit and loss on the following basis. Account holders Savings accounts Investment accounts 3 months Investment accounts 6 months Investment accounts 1 years Investment accounts 5 years Mudarib share 30% 25% 20% 15% 10% Rab al maal share 70% 75% 80% 85% 90%

The Islamic bank earned $ 135,870,000 for the period. Find distributable profit for each account holder and profit rate. (The investors with long maturity period of investment accounts are given priority, given more share of profit. The investment rate can be used to find the weighted average for each investment account)