---
title: "What is Restricted mudarabah? | IslamicOpenFinance™"
description: "A mudarabah in which the capital provider limits where, how or for what the capital may be invested."
url: https://islamicopenfinance.com/glossary/restricted-mudarabah/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Partnership and investment](https://islamicopenfinance.com/glossary/#partnership)

Partnership and investment

# Restricted mudarabah

A mudarabah in which the capital provider limits where, how or for what the capital may be invested.

A restricted mudarabah, or mudarabah muqayyadah, is one in which the rabb al-mal imposes restrictions on the mudarib, for example on the sector, location, period or type of investment. Bank Negara Malaysia's policy document distinguishes it from unrestricted mudarabah on this basis. If the mudarib breaches the agreed restrictions, it becomes liable for the resulting losses.

## Sources

- [Bank Negara Malaysia, Mudarabah policy document, 2015: types of mudarabah](https://www.bnm.gov.my/documents/20124/938039/Mudarabah.pdf)

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

[**Unrestricted mudarabah** A mudarabah that leaves the manager free to invest the capital in any permissible business at its discretion.](https://islamicopenfinance.com/glossary/unrestricted-mudarabah/) [**Restricted investment account** An investment account whose holder limits where, how or for what purpose the bank may invest the funds.](https://islamicopenfinance.com/glossary/restricted-investment-account/) [**Mudarabah** A partnership of capital and work: profit is shared by an agreed ratio, while financial loss falls on the capital provider.](https://islamicopenfinance.com/glossary/mudarabah/) [**Rabb al-mal** The capital provider in a mudarabah, who funds the venture, shares profit by the agreed ratio and bears financial loss.](https://islamicopenfinance.com/glossary/rabb-al-mal/)

**Partnership and investment**

1. [Mudarabah](https://islamicopenfinance.com/glossary/mudarabah/)
2. [Musharakah](https://islamicopenfinance.com/glossary/musharakah/)
3. [Diminishing musharakah](https://islamicopenfinance.com/glossary/diminishing-musharakah/)
4. [Rabb al-mal](https://islamicopenfinance.com/glossary/rabb-al-mal/)
5. [Mudarib](https://islamicopenfinance.com/glossary/mudarib/)
6. [Profit sharing ratio](https://islamicopenfinance.com/glossary/profit-sharing-ratio/)
7. [Unrestricted mudarabah](https://islamicopenfinance.com/glossary/unrestricted-mudarabah/)
8. [Wakalah bil-istithmar (investment agency)](https://islamicopenfinance.com/glossary/wakalah-bil-istithmar/)

[All 221 terms](https://islamicopenfinance.com/glossary/)