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Islamic Finance




Reserve


An amount that is taken out of an Islamic bank’s income (mudaraba income, investment account holders’ income, etc) as a precaution against future losses or income uncertainty. More specifically, a reserve is a component of equity (of either investment account holder and/ or shareholders) and is made up of amounts appropriated out of income. In general, reserves in an Islamic bank subdivide into two types: profit equalization reserves and investment risk reserves.



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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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