Sadique, Muhammad Abdurrahman (2024) Methods of profit sharing in Interest-Free Banking: identifying areas of concern. In: International Conference on Science, Innovations and Global Solutions, 31st July 2024, Poland.
|
PDF (Full Paper)
- Published Version
Download (727kB) | Preview |
Abstract
It is essential that interest-free banks strive to move away from the currently adopted capital / period based calculation mechanism for determining its own profit share, to an objective method aimed at determining the profit sharing ratio in the participatory venture as a whole. Ideally, a profit sharing ratio could be fixed for an individual venture considering relevant aspects that are of importance to each partner, based on independent negotiation. This would result in a fair share of the profit accruing to the bank, in proportion, at least partially, to the amount of funds invested and any expertise extended, while the client, too, secures a fair return for his input in the form of capital or labour. Although there could be no bar to using the rate of return / period method for purposes of analysis and comparison, adopting it as the very basis of profit share calculation does not seem to be reflective of the spirit of equity participation.
| Item Type: | Proceeding Paper (Plenary Papers) |
|---|---|
| Additional Information: | 5640/114440 |
| Uncontrolled Keywords: | interest-free, banking, financing, profit, sharing, equity, investment, joint-venture |
| Subjects: | BPH Islamic Economics > BP322.3 Musharakah - Partnership BPH Islamic Economics BPH Islamic Economics > BPH156.3 Musawamah - Negotiation Of A Selling Price BPK Islamic law. Shari'ah. Fiqh |
| Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): | Ahmad Ibrahim Kulliyyah of Laws Ahmad Ibrahim Kulliyyah of Laws > Department of Islamic Law |
| Depositing User: | Dr Muhammad Abdurrahman Sadique |
| Date Deposited: | 17 Sep 2024 14:17 |
| Last Modified: | 20 Sep 2024 11:55 |
| URI: | http://irep.iium.edu.my/id/eprint/114440 |
Actions (login required)
 |
View Item |
Download Statistics
Download Statistics