Maximum Rate of Profit
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Definition of "Maximum Rate of Profit"
Relating to musharakah financing by banks in Pakistan, it is the rate above which the banks cannot receive anything as their share of profit on the finance provided by them. It is determined in the following manner: (i) averaged-out rate of profits on profit–loss sharing (PLS) of the longest term deposits paid by various banks; (ii) rate of service charges determined by the State Bank of Pakistan. Total of (i) and (ii) above would be the maximum rate of profit.