Mudarib
The manager in a mudarabah, who runs the venture and earns a share of profit rather than a guaranteed fee.
The mudarib is the entrepreneur who manages mudarabah capital on behalf of the capital provider. The mudarib earns only a share of any profit, at the agreed ratio, and does not bear financial loss unless it results from misconduct, negligence or breach of the contract's terms. Its role is fiduciary, and Bank Negara Malaysia's policy document describes mudarabah as a contract based on a fiduciary relationship.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
MudarabahA partnership of capital and work: profit is shared by an agreed ratio, while financial loss falls on the capital provider.Rabb al-malThe capital provider in a mudarabah, who funds the venture, shares profit by the agreed ratio and bears financial loss.Fiduciary riskThe risk that an institution fails to meet the standards that apply to its duties as trustee or manager of others' funds.Profit sharing ratioThe agreed split of profit between partners, expressed as a ratio of actual profit, never as a fixed sum or a share of capital.