Analysis on musyarakah model in managing interbank investment

Abstract

Musyarakah contract is a joint venture investment that considers profit and loss sharing and is a dynamic Islamic principle in investment but there are hardly musyarakah products in Malaysian banking system today. The research considers the current mudharabah model and musyarakah model in managing Mudharabah Interbank Investment, that is one of the Islamic Interbank Money Market instruments. The profit sharing rates for the profit earned from the acceptor’s investment portion is fixed for the acceptor and lender. Generally, musyarakah model gives more advantage to the acceptor since the acceptor can earn a higher profit as compared to the current mode.