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Abstract

There are different aspects of the distribution of profit in the Islamic Economic System. A keen reviewis required to evaluate the accuracy of this profit distribution. This article examinessome of these aspects. Islamic banks keep a portion of the profit as a reserve but thisprofit is not given to the client who is leaving the bank, instead, it is awarded to anew client who is replacing the old one. This study suggests conferring this profit tothe old client as it is earned by his money, not by the wealth of a new depositor. Allconditions of partnership also show the same view. This study will also providedetailed Sharī‘ah aspects of 'Mutual business' practiced in Islamic banks,which is mostly the combination of 'Ijarah' and 'Bai'. It is also necessary for banksto provide details of profit and loss to the depositors; to inform them about thetransactions in which negligence of the bank is involved and not to make thedepositors habitual to get the profit forever. This study also condemns theviewpoint to provide a guarantee to the depositor for their principal amount.In this article, it is described that the people own mutual business(money, luggage) and they all can do their business mutually and they are partners in both `profit & loss`. In recent times it is a custom that people are trading and doing business with cooperation. Muslim scholars especially Maulana Ahmad Raza Khan have described the merits and demerits of mutual business very well which we will discuss in the article.