This investment account is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).
Restricted Investment Account (‘RA’) refers to a type of Investment Account (‘IA’) where the Investment Account Holder (‘IAH’) provides a specific investment mandate to the Islamic Financial Institution (‘IFI’) such as purpose, asset class, economic sector and period for investment. RA is clearly distinct from Unrestricted Investment Account (‘UA’); as the asset creation is dependent on the placement of RA fund.
Musyarakah refers to a partnership between two or more parties, whereby all parties will share the profit and bear the loss from partnership.
Restricted Investment Account on Musyarakah Venture (‘RAM’) would allow AmBank Islamic (‘AmBI’) to take placement of fund under Restricted Investment Account (‘RA’) via Mudarabah contract (RAM-Liability) from an Investment Account Holder (‘IAH’) and disburse it as capital to a Venture via Musyarakah contract (RAM-Asset).
According to Musyarakah contract, the Entrepreneur would also contribute an amount to form the total capital for the Venture. The Musyarakah Venture would allow AmBI to manage the returns from the RA fund being used by the Entrepreneur and subsequently distribute the profit/ loss accordingly back to the IAH.
Key Product Features
a) Tenure and Profit Payment Frequency
Tenure is stated in terms of years. Maximum 12 years.
Profit frequency is flexible subject to the agreement between all parties.
b) Profit Sharing Ratio (PSR) & Capital Contribution Ratio (CCR)
i. Mudarabah Level
The PSR will be based on the ratio to be agreed upon between IAH and the Fund Manager based on Mudarabah contract. The CCR between IAH and the Fund Manager will always be 100:0.
ii. Musyarakah Level
The CCR shall be based on the agreement between the Fund Manager and the Entrepreneur. The profit distribution shall be based on the agreed PSR.
c) Loss Incidence
For the Mudarabah between the IAH and the Fund Manager, any losses will be borne by IAH, in line with the Mudarabah concept.
For the Venture, losses will be shared based on CCR between the two capital contributors (e.g. AmBI and the Entrepreneur), in line with the Musyarakah concept.
d) Reinvestment
Reinvestment is not applicable. Parties wanting to extend the relationship shall enter into a new agreement.
AmBank Islamic Berhad
A PIDM member
