The Mudarabah Contract Executed By Al Salam Bank Algeria

Abstract

This study investigates the extent to which the Mudarabah contract adopted by Al Salam Bank in Algeria aligns with the Shariah Standard on Mudarabah issued by the Accounting and Auditing Organization for Islamic Financial Institutions. The central question addressed is how effectively Islamic financial institutions incorporate standardized Shariah frameworks into their contractual structures. The research employs both a comparative methodology—analyzing the contract's clauses against the AAOIFI standard—and a descriptive-analytical approach, which involved gathering and examining relevant contractual documents and appendices issued by the bank. Supplementary qualitative interviews were also conducted with institutional stakeholders and certified Shariah auditors. The findings demonstrate substantial consistency between the contract and the standard in areas such as profit distribution, legal capacity, capital validity, and the fiduciary role of the investment agent. Nonetheless, the study identifies critical gaps, notably the absence of clear provisions governing premature termination and profit allocation for elapsed periods. These insights underscore the bank’s considerable compliance with Shariah principles while highlighting areas for structural improvement.