Assignment of a Portion of Shareholders’ Profit to Depositors
If required, the shareholders may allocate a portion of their own profit to a specific deposit category(s) or all Investment account holders in the form of donation (Hiba). This allocation could be done to enhance market competitiveness by offering more attractive returns or to encourage a specific category of depositors.
Profit Equalization Reserve (PER) & Investment Risk Reserve (IRR)
Mudaraba-based Deposits
The Bank as Mudarib reserves the right to deduct 0.05% of the profit in the joint investment before allocation of profit between depositors and Bank (Mudarib), to create PER for the purpose of profit stabilization/smoothing, for the benefit of the depositors.
The Bank, as Mudarib, also reserves the right to deduct 0.30% from the profit of the depositors in the joint investment pool after deducting the Mudarib’s share, to create IRR solely for the benefit of the depositors.
Wakala-based Deposits
The customer as Muwakkil authorizes the Bank as Wakil, to deduct 0.05% of the Profit in the joint investment pool before deducting Muwakkil’s share, to create PER for the purpose of profit stabilization / smoothing for the benefit of the Muwakkil (customer).
The customer as Muwakkil also authorizes the Bank as Wakil, to deduct 0.05% of the Muwakkil’s Profit in the joint investment pool after deducting the Wakil’s share to create IRR solely for the benefit of the Muwakkil.
Treatment of reserves
The reserves shall be deducted, held, and distributed in accordance with the approval of the Internal Shari’ah Supervision Committee of the Bank.
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