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Product Description

Musharaka means partnership. Two or more persons jointly contribute capital and share profit as per agreed ratio and loss as per capital ratio. Under this mode Bank participates with its client as a partner of an enterprise. The Islamic Shariah principle of Musharaka is Shirkat-Al-Inan which means profit is divisible as per agreed ratio irrespective of capital contribution whereas loss is borne strictly on the basis of capital contribution of the partners involved.

Features
  • Both Bank and the client jointly contribute capital.
  • The entrepreneur will manage the enterprise.
  • The Bank shall take part in the policy and decision making as well as oversee the operation of the enterprise. The Bank shall appoint suitable person(s) at the cost of the enterprise to manage and maintain the books of accounts properly, if felt necessary.
  • As the entrepreneur shall manage the enterprise, the Bank may pay more of profit to him than that of proportionate capital investment.
  • Loss, if any, shall be shared on the basis of equity ratio.
  • A written agreement incorporating therein all the terms and conditions shall be executed by the parties involved.

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