Islamic Shariah defines ‘Mudaraba’ as ‘a contract between two parties’, in which one party is called
‘Sahib-Al-Maal’, i.e. owner of the fund, and the other party is called “Mudarib”, the
investor/entrepreneur. Mudarib runs the business on the condition that, the profit earned by the business
shall be distributed between them at a certain pre-agreed ratio. But the entire financial losses, if any, shall
be borne only by the Sahib-Al-Maal.
The Mudaraba Short Notice Deposit (MSND) account is opened according to Shari’ah Principles of
Mudaraba. According to Mudaraba principles, the Mudaraba depositor is the Sahib-Al-Maal (owner of
the fund) and the bank is the Mudarib (investor/entrepreneur of the fund). The bank is authorized by the
depositor to invest the Mudaraba fund at the risk of the Sahib Al-Maal.