Mudarabah is a kind of Islamic financial transaction in which there is a contract between two parties. One party will give the capital and the other will provide the work. This type of partnership of Islamic finance is in accordance with Sharia law. This agreement is a type of incentive and profit sharing is established before the contract is signed. On the liabilities, Feisal Khan argues that there is a “long-established consensus” that debt financing is superior to equity investment (PLS is equity) because of the asymmetry of information between the financier/investor and the borrower/entrepreneur – the financier/investor must determine precisely the creditworthiness of the borrower/entrepreneur seeking credit/investments (the borrower/entrepreneur). Solvency determination takes time and is expensive, and bond contracts with important collateral minimize the risk of not having information or having enough.  In the words of the rector of Al-Azhar Muhammad Sayyid Tantawy, “Silent unions [mudarabah] follow the conditions set by the partners. We are now living in a period of great dishonesty, and if we do not indicate a fixed profit for the investor, his partner will swallow his fortune.  The Mudarabah contract is a commercial partnership contract, and Mudarabah can be defined in the Islamic banking system as “a partnership in which one partner invests in a company while the other runs the company. The person who invests is Called Rabb-ul-maal, the person who runs the business, is called Mudharib, and the investment is called “Raas-ul-Maal”.” (At least one scholar – M.S. Khattab – questioned the basis of Islamic law for the two-tiered medarabah system and said there were no cases where mud transferred funds to another mudharib. [Note 3] According to Mufti Taqi Usmani, a Mudarabah agreement differs from the Musharakah in several respects: in principle, the owner of the capital has no right to interfere in the management of the company, which is the sole responsibility of Agent x. But he has every right to set conditions that would ensure better management of his money.
That`s why Mudaraba ends up being called a sleep partnership. An important feature of Mudaraba is the organization of the interest. The benefits of a Mudaraba agreement can be shared in any proportion agreed in advance between the parties. However, the loss is fully borne by the owner of the capital. In the event of a loss, the owner of the capital bears the loss of money and the agent loses the reward of his sentence. Mudaraba can be individual or flexible. A – The Board sees no legal obstacle to the combination of the capital of two or more mudarabah operations in a single account held in accordance with the Shari`ah of Islam, as long as the profits and losses are distributed in relation to the percentage of each shareholder`s investment in Mudarabah.