Guidelines for Islamic Modes of Finance, SBP

B whenever the circumstances so require consult with

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Unformatted text preview: b) whenever the circumstances so require consult with the Client in any matter with a view to determining the policy to be followed in order to ensure the proper implementation of this Agreement, but without any obligation of the Institution to compromise its right, hereunder. c) perform its obligations under this Agreement without violation of the principles of Islamic Shariah. 8. PARTICIPATION IN PROFIT a) The participation in profit will be in accordance with the following ratio: (i) [ ]% of the profit will be for the Management Services and payable to the Client. (ii) [ ]% of the profit will be payable to the Institution. b) On Termination Date, the accounts of the Modaraba shall be drawn up in accordance with accepted accounting principles, and the profit if any due to the Client and the Institution shall be worked out and paid in the proportion specified above, subject to adjustment of any provisional payments made, (plus the amount paid by the Institution after deducting loss if any). c) At the sole discretion of the Institution, the Client may file:///C|/Documents and Settings/Administrator/D...nes for Islamic Modes by SBP/mudaraba finance.htm (5 of 8) [2/24/2008 12:04:28 AM] State Bank of Pakistan - The Central Bank become entitled to receive a Good Performance Bonus at a rate to be determined by the Institution. 9. LOSSES a) (i) 100% of the loss in the Project will be borne by the Institution (ii) The client will receive no compensation for his Management Services, and will be liable for the loss if it is proven that he has breached his obligations or is proven to be failing in the discharge of his obligations under this Agreement. b) In the event of the Project showing losses during the currency of this Agreement the client shall forthwith give notice of such losses to the Institution together with all accounts and details pertaining thereto and such other information and records as may be required by the Institution. Notwithstanding the above, the Institution shall only be liable for the losses in the manner specified if the said losses have not been caused due to misconduct on the part of the Client in out the Project ’ s business and operations or as a result of his negligence or inefficiency, including non-compliance with the terms and conditions of this Agreement 10. TAXATION On behalf of the Project, the Client shall be liable for and shall punctually and regularly pay all taxes, duties, cesses and other charges relating to the Project ’ s business and operations. 11. TERMINATION a) Subject to other provisions of this Agreement, it is agreed that upon full payment on Termination Date or earlier, if proceeds have been received, the Modaraba shall stand redeemed. b) While the amount invested by the Institution must be repaid on the due date, mentioned above, the accounts of the Modaraba will be drawn up within 7 days thereof and the agreed share the Institution ’ s profit will be promptly paid....
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b whenever the circumstances so require consult with the...

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