Subject:                 Essentials for Islamic Finance
Submitted to:                   Yousuf Ibnul Hasan
Submitted   By :                       Zain Akhtar
Date of submission:           25th   Dec 2010
Registration #:                                                     13563
REPORT# :                                                                                       1
Program :                                                           MBA Morning
Timings :               12:00 p.m to 3:00 p.m(Monday)
Date of repot :                     29th Nov 2010

Topic of report
The concept of Modaraba in 2000 century application and viability. Minimum 2000 words maimum 6000 words.

Islam, being a complete religion, has prohibited "riba" or "interest", in all forms and manifestations in the absence of any blueprint or a workable model of interest free economic system, utmost care with collected gradualness will have to be exercised to bring about a smooth switchover without disrupting the process of capital formation. 
Basically, the task of Islamising the financial system revolves around, institutional arrangements, which, on the other hand, reconcile the freedom of the individual with the optimum use of total resources and on the other, do not conflict with the Islamic tenets of equity and fairness. It appears that financial system is based on principles of profit and loss sharing may meet these requirements. While this may cleanse the financial system from the evil of "riba". Its total elimination will be possible only when the savers earn their income out of "halal" activity and the entrepreneurs do not cross the limits of "halal" business and "halal" profits. Again, an Islamic system would be as much in need of optimum capital formation as any other economic system, be it capitalist or socialist or mixed economy. 
As an Islamic state, Pakistan has embarked on the task of building a socio-economic order based on the principles of equity and...