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ISR (Income Sharing Ratio) Module of Islamic Banking
The Income Sharing Ratio (ISR) is a unique module for income distribution among the Mudaraba Depositors, where the rate of profit is directly linked to the investment income of Islamic Banking operations. According to this module, Bank Asia Islamic Banking does not offer any kind of Fixed Rate or Provisional Rate to the depositor; but only can offer an Income Sharing Ratio (ISR) which will work out the profit rate from our Investment at the end of each month. The rate of profit, in our case, is an output (result), not input. For example, the ISR of ‘Depositor/ Client: Bank = 70:30’ means that 70% of distributable investment income is to be shared by the concerned depositors and the rest 30% to be shared by the Bank.
The ISR between each type of Mudaraba depositor (Sahib al Mal) and the Bank (Mudarib) are duly disclosed at the time of account opening or at the beginning of the concerned period. Profit rate is emerged at actual, as derived from the concerned income fetched from deployment of the concerned fund. In other words, our rate of profit on deposit under Islamic Banking is nothing but a post facto expression of the respective agreed ratios.
The present ISR on Mudaraba deposits is as follows (November 2017):
Sl. Types of Mudaraba Deposit Tenure Distributable Investment Income Sharing Ratio (ISR)
Client Bank
01. Mudaraba Savings Account (MSA) - 45% 55%
02. Mudaraba Corporate Privileged Savings Account (MCPSA) - 45% 55%
03. Mudaraba Special Notice Deposit Account (MSNDA) - 35% 65%
04. Smart Junior Saver (School Banking Account) N/A 60% 40%
05. Mudaraba Term Deposit Accounts (MTDA) 1 Month 60% 40%
06. Mudaraba Term Deposit Accounts (MTDA) 2 months 60% 40%
07. Mudaraba Term Deposit Accounts (MTDA) 3 Months 75% 25%
08. Mudaraba Term Deposit Accounts (MTDA) 6 Months 77% 23%
09. Mudaraba Term Deposit Accounts (MTDA) 1 Year 85% 15%
10. Mudaraba Term Deposit Accounts (MTDA) 2 Years 85% 15%
11. Mudaraba Term Deposit Accounts (MTDA) 3 to 5 Years 85% 15%
12. Mudaraba Hajj Savings Scheme(MHSS) 1 to 10 years 87% 13%
13. Mudaraba Deposit Pension Scheme(MDPS) 3 to 10 years 85% 15%
14. Mudaraba Monthly Profit Paying Deposit Scheme (MMPPDS) 1Year 70% 30%
15. Mudaraba Monthly Profit Paying Deposit Scheme (MMPPDS) 2 years 72% 28%
16. Mudaraba Monthly Profit Paying Deposit Scheme (MMPPDS) 3 to 5 years 72% 28%
17. Cash Waqf Perpetual 87% 13%
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