What does Wakala mean?

What does Wakala mean?

A wakala is a structure that utilizes the idea of principal and agent theory. The principal provides the capital, and the agent gets hired to provide expertise and labor. Under a wakala, the capital provider receives the profits from the venture, less an agreed-upon fee that goes to pay the agent.

What is the difference between Wakala and Mudaraba?

While the wakala (agency) structure has some similarities with the mudaraba structure, the main difference is that unlike a mudaraba, in which profit is divided between the parties according to certain ratios, an investor via a wakala structure will only receive the profit return agreed between the parties at the …

Is Wakala a supporting contract?

Wakalah is one of the many supporting contracts that is used in the Islamic finance sphere. It comes from the root word wakkala, which means to perform a task on the behalf of another, that is, the delegation of duties or job to another person/entity.

What is Mudharabah deposit?

Mudarabah Term Deposit (MTD) is a profit sharing product. The bank receives deposit on Mudarabah principle and invests it in Halal (permissible in Isalmic Shariah) business. Profit is shared as per pre-agreed ratio and loss if any, goes to the account of the depositor.

What is a Wakala fee?

The investment manager or agent (known as a wakeel) is entitled to a pre-agreed fixed fee or a fee calculated as a percentage of the net asset value of the investment. The fee may be paid on account with a reconciliation made on a winding up of the investment. The investment manager may also be paid an incentive fee.

What is Wakala card?

Wakala Service Akbar Travels holds the authoritative Wakala card, an authorization letter that has been issued by the respective company or private establishment with local sponsor in KSA We recruit manpower from India and handle complete procedures from enquiry to the the arrival of the Indian expatriate at KSA.

Is Wakala halal?

The Godwin Capital Wakala investment instrument is the first Shariah compliant investment product that Godwin Capital have launched, offering investors competitive expected profit rates.

What is riba Gharar and Maysir?

While comparing Islamic and conventional accounting Velayutham (2014) confirms that the Islamic principle that has had the greatest impact on Islamic economics is the prohibition on the payment of interest (Riba), sale of risky assets (Gharar) and gambling or speculation (Maysir).

What is Wakala contract?

Wakalah literally means protection, delegation, or authorization. Legally, wakalah refers to a contract in which a person who has complete legal capacity authorizes another to conclude a certain well-defined permissible contract on behalf of that person.

What is Mudaraba and musharaka?

Mudarabah (مضاربة) refers to “trustee finance” or passive partnership contract, while Musharakah (مشاركة or مشركة) refers to equity participation contract. Other sources include sukuk (also called “Islamic bonds”) and direct equity investment (such as purchase of common shares of stock) as types of PLS.

What is Bai Bithaman Ajil concept?

Bai’ Bithaman Ajil (BBA) refers to a sale and purchase transaction of an asset to be paid on later date (deferred payment) based on a price, which include a profit margin agreed to by both contracting parties.

What is Wakala model?

The Wakala Model Under this model, the operator charges a fee for fund management and performance. This fee is determined by the Shariah advisory board of the company. The Wakala model is basically used to distinguish between the operating company (wakeel) and the takaful fund.