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Islamic Finance




Agency-Based Contract for Investment


An investment contract that is based on investment agency (wakalatul istithmar/ wakalah bil istithmar) where the investment account holder appoint the Islamic financial institution (e.g., Islamic banks) as agent (wakil) for investing their funds for a specified fee in addition to a share of profit if returns exceed a minimum level, the latter being an incentive for the agent to achieve a return higher than expected or normal market benchmarks.



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The last three decades have witnessed the modern rebirth of Islamic finance both in terms of literature and practice. Islamic banks and ...
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