ACHIEVING GLOBAL SUSTAINABLE ECONOMIC DEVELOPMENT THROUGH MUDARABAH PRODUCTS OF ISLAMIC BANKING AND FINANCE INSTITUTIONS

Abstract

The best way to acquire wealth and strive for material improvement is through Mudarabah products as one of the Islamic lawful business means. This paper aims to observe the development of Mudarabah products, contract and practice under the Islamic banking institutions. It focuses to re-direct the man’s attention towards useful ethical principles of Shariah on business transactions. The paper stresses that Mudarabah products of Islamic banking institutions is a financial intermediate that brings together the providers of capital with the users of the capital in accordance with the principles of Islamic law. Islamic banks are very unique therefore, their activities are regulated by concepts of Shariah. It further explains the system used by Islamic banks in generating liquidity which they use to perform their investment processes through Mudarabah contract which is a profit sharing and loss bearing contract. The paper presents literature on Mudarabah as the products of Islamic banking and finance institutions. The study contributes in uphold integrity among the rabul maal and amil in order to strengthen Mudarabah contract of Islamic banks. The study discovers that with Mudarabah contract, Islamic banks are able to provide necessary financing to support building successful individual and corporate customers, which are the engine of growth and development in many developing and developed countries. It is also sacrifice needed to reduce poverty, restore normalcy in the society and prepare the people for the challenges ahead.