An Arabic term that denotes restricted mudarabah; a mudarabah contract that is used in conjunction with restricted investment accounts (RIAs), where the banks acts as an agent for the investment account holders and is subject to specific restrictions as to how it will invest their funds and in what types of investments. In this sense, the funds available to the bank from investment account holders are not entirely under the control of the bank because the account holders have the right to determine the purpose, manner, and vehicles of investing their funds. Restrictions may include separating the funds raised under mudarabah muqayyadah from those of the bank’s shareholders and depositors.

The share of restricted investment account holders (RIAHs) in profits is set based on an agreed profit-sharing ratio. This ratio is applied only to the returns earned on a designated investment portfolio that is made up solely of the funds of restricted investment account holders. If the contract is based on wakalah (agency for investment), the agent (bank) would receive an agency fee. Otherwise, mudaraba profits will be distributable to the bank and RIAHs according to the agreed profit sharing ratio.