Mudarabah Muqayyadah

Mudarabah Muqayyadah (Restricted Mudarabah) is a profit-sharing investment contract in which the capital provider (Rab al-Maal) specifies restrictions on the investment manager's (Mudarib's) deployment of funds — limiting the types of permissible investments by asset class, geographic region, sector, counterparty, or investment horizon. Unlike Mudarabah Mutlaqah where the Mudarib has full discretion, Mudarabah Muqayyadah constrains the mandate to a defined investment universe. Examples of restrictions include: investing only in real estate, only within a specific country, only in Shariah-compliant equities, or only in short-term commodity transactions. AAOIFI Shariah Standard No. 13 permits all such restrictions provided they are specified clearly at contract inception and do not make the investment impractical. In Islamic banking, Mudarabah Muqayyadah underpins Restricted Investment Accounts (RIA), where the bank acts as Mudarib under investor-specified mandates — these accounts are typically off-balance-sheet for the bank, as losses are borne entirely by the account holder (not the bank). IFSB-1 differentiates RIA from URIA for capital adequacy purposes. RIA structures are commonly used for Shariah-compliant equity funds, sukuk portfolios, and direct investment mandates. The IOF ISLAMIC_FUNDS rail supports Mudarabah Muqayyadah with configurable investment policy statements, mandate tracking, breach alerts, and restricted-universe compliance verification.