Mudharabah transaction is derived from a partnership based on risk and profit sharing. This partnership is a collaboration between an investor (Rabbul Mal) and an entrepreneur (Mudharib) under which the former provides funds to the latter for the purpose of investment and profit sharing. This is how it works in practice - customer, the investor will deposit an amount of money with the bank, which acts as the entrepreneur.

This investment is utilised as business capital by the bank. In this contract customer have no authority to interfere in the management of his investment. On the other hand, the bank will have the right to manage his investments as it thinks fit by placing it into businesses that are permissible in Islam, and which it thinks are profitable. Depending on the tenure of customer investment, he will be offered a profit sharing ratio which will form the basis of the agreement made between him and the bank. On the date that his investments mature, the bank will distribute his share of accumulated profit into his investment account. If the bank suffers a loss in that business transaction it shall be borne by the customer (investor).

Mudarabah term deposit is based on the Islamic concept of Mudarabah (Partnership). Under this arrangement the customer is the Rab-ul-maal (Investor) and the bank is the Mudarib (Fund manager). The deposit will be invested in profitable business ventures which are legal and Shariah compliant. The profit will be shared as per a pre determined ratio. As fund manager the bank will be entitled to a part of the profit, whereas profit distribution amongst the depositors and the shareholders will be made according to the weightage assigned at the beginning of each month to their investments. Through this arrangement customer can enjoy attractive profits strictly on halal terms. However any loss on the transaction shall be entirely borne by the customer from the investment amount provided.

Minimum Amount of Deposit can be Afghani 10,000 and no upper limit is prescribed for maximum deposit. Minimum lock in period is 6 months and maximum period of deposit is 60 months. No profits shall be payable if the deposit is withdrawn before lock in period. Profits shall be administered by bank after arriving at net profit from the portfolio. Similarly loss shall entirely be attributed to the depositors after arriving at the net loss from the portfolio.