Shariah Structure

The proposed shariah-based structure by the MRHB Shariah Governance Board (SGB), is exclusively for EMPLIFAI V1 only.

In V1, MRHB will offer this product to the users through a software-as-a-service (SaaS), where the users will have full access and control over the management of their funds. They will be able to deposit and withdraw their funds at any time they want. The product will offer different shariah compliant strategies (vaults), with full disclosure of associated risks and rewards. These strategies are based on the structures and products offered by third parties.

SaaS is a computer program application offering model in which a vendor offers the computer application, and the users have the right to use it. Normally, the users have access to it through a web browser via the Internet.

From the shariah perspective, the product (EMPLIFAI) and strategies will be continuously reviewed and monitored. This is an ongoing process due to the dynamic aspects of the proposed strategies.

As for providing the software-as-a-service (SaaS), according to the Shariah Standard No. 28: Banking Services in Islamic Banks:

• It is permissible for the Institutions to provide banking services that do not involve interest-based lending and borrowing, because such services serve a permissible interest of the clients.

• Institutions may charge fees for providing banking services, because the fees so charged constitute a remuneration which the Institutions deserve for the tasks they perform, since it is permissible in Shariah to get reward for performing tasks that result in permissible benefits to others.

• The fee charged by the institutions may be a lump sum amount or a percentage of the value of the service, because when the percentage remuneration is calculated it becomes like the lump sum amount.

Based on the above points, this type of service falls under the concept of Al Ujrah An Al Khidmah

Hence, MRHB may charge fees for providing such services, because the fees so charged constitute a remuneration which MRHB deserves for the tasks the product (EMPLIFAI) performs, since it is permissible in Shariah to get reward for performing tasks that result in permissible benefits to others. AAOIFI standard also allows the fees to be charged as a percentage. In MRHB’s case, it is the combination of percentage of the deposits (deposit fee) and the percentage of compounding revenue (performance fee).