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Islamic Finance




Mubah


An Arabic term that translates as permissible or allowable or optional without any corresponding outcomes, thawab or iqab, desirable/ undesirable or pleasant/ unpleasant repercussions, under shari’ah. Mubah is whatever is left for the discretion/ preference of a Muslim person, without any imposition or restriction by shari’ah. Permissible (mubahah) acts are countless and innumerable: the essence in muamalat is permissibility (ibahah) according to the shari’ah maxim (all contracts and transactions are permissible, unless there is “substantiated” evidence indicating otherwise).

Examples of mubah include the determination of profit-sharing percentages in mudarabah transactions at the discretion of the two parties (while for losses, only rab al-mal bears all potential losses if occurred unless in very specific cases- negligence by mudarib, etc.).



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