Modarabas

Modaraba is one of the prime modes of Islamic Financial System. In Pakistan the process of Islamization of the economy was initiated in 1980 when the Government introduced the concept of Modaraba for Islamization of the economy in the banking and corporate sector by promulgating the Modaraba Companies & Modaraba (Floatation & Control) Ordinance, 1980 and Modaraba Companies and Modarabas Rules 1981.

Amongst other activities, the law provides that a Modaraba can undertake Ijara, Morabaha, Musharaka financing activities, trading of Halal Commodities, project financing activities, investment in the stock market and can act as a special purpose vehicle and a venture capital company.

For further information regarding Registration and formation of a Modaraba Company and Modaraba,