Two-tier mudarabah
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Definition of "Two-tier mudarabah"

A system of mudarabah being used by the Islamic banks. The savers enter into a mudarabah contract with the bank. In a second mudarabah contract, the bank provides finance to entrepreneurs. The profit of loss in the second contract is shared by the bank and the entrepreneurs. The bank shares its profit or loss from the second contract with the savers.

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