Unrestricted mudarabah
A mudarabah that leaves the manager free to invest the capital in any permissible business at its discretion.
An unrestricted mudarabah, or mudarabah mutlaqah, gives the mudarib discretion to invest the capital in any activity its Shariah mandate allows it judges suitable, without limits set by the rabb al-mal. Bank Negara Malaysia's policy document contrasts it with restricted mudarabah. Unrestricted investment accounts at Islamic banks commonly use this form, with funds pooled in a portfolio that the bank manages.
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
Restricted mudarabahA mudarabah in which the capital provider limits where, how or for what the capital may be invested.Unrestricted investment accountAn investment account whose funds the bank may invest at its discretion and commingle with its own in a pooled portfolio.MudarabahA partnership of capital and work: profit is shared by an agreed ratio, while financial loss falls on the capital provider.Investment poolA group of assets funded by identified sources, such as shareholders or investment account holders, whose income is allocated to them.