Musharika


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Musharika

A partnership in Islamic finance in which all partners contribute capital. For example, if Joe wants to start a business, he may form a musharika into which he places $20,000. A bank may then contribute $40,000 and split profits with Joe based upon some agreed-upon formula.

Musharikas are important in Islamic finance in part because they are the most straightforward. That is, a musharika does not attempt to imitate a debt product, which is controversial. Rather, it simply involves equity financing by an investor. However, musharikas are difficult to structure in some non-Muslim countries, especially the United States, because some banks are not permitted to make equity financing arrangements.
References in periodicals archive ?
It was told that Mufti Ehsan-ul-Haq, CEO Ms Fayazi Gujranwala Industries PVT LTd and others have swindled Rs 8 billion of public on the pretext of Modarba and Musharika.
Takaful companies can invest in Shari'ah compliant Government Securities, Immoveable property, Joint Stock Companies, Redeemable Capital, Mutual Funds, Musharika Certificates, Term Finance Certificates and Participation Term Certificates etc, he added.
In the last year or so we have introduced Sharia-compliant microfinance, both murabaha [microcredit] and musharika, [comparable to short-term joint-venture financing].
Other types would include Sukuk Al Musharika and two tiered sukuk.
However, to some of us, it will be doubtful Islamic transaction where a musharika finance does not share in the loss of their partners.
During investigation, it has transpired that the accused persons induced public at large to invest the amount in their illegal Modarba/ Musharika business against attractive profits and thus looted the general public at large.
Forex Private Limited Wah Cantt cheated public at large and looted billions of rupees from innocent people fraudulently through his network of agents in the name of Mudariba / Musharika Business, said a press release of NAB KP.
In the sphere of interest-free banking and commerce, the government introduced the profit and loss (PLS) accounts, Participation Term Certificates (PTC), Modaraba and Musharika (1981-82).
e for purchase of goods by banks and their sale to clients at mark up in price on deferred payment oasis, (d) leasing and hire-purchase (Ijara) which is a contract allowing use of land, building, equipment of other fixed assets for a specified period in exchange for payment in form rent and is broadly classified as Finance Lease and Operating Lease, (e) Musharika, which is an arrangement of partnership between the bank and its client under which bank provides capital finance as per terms agreed, with profit and loss shared in agreed ratios, and (f) rent sharing.
In this case, the accused Mufti Mohammad Ehsan Ul Haq, CEO of M/s Fayazi Gujranwala Industries Pvt Ltd and others are involved in illegal business of Modarba and Musharika and have received heavy investments and cheated public at large to the tune of Rs.
NAB has so far received 42819 complaints/claims from affectees of Modarba/ Musharika scam.
The said business is being carried out in the shapes of Ander-Palay, Neta, Double Shah, Muzariba and Musharika causing to erupt different kind of monetary related disputes and sometime leads to criminal and even murdered cases among the parties concerned," he added.