Proposed in the model of interest-free banking by some. Normally to be issued by the state, they are an instrument for obtaining funds from the private sector for investment in the public sector on the basis of partnership. The holders of these share certificates are the owners of the respective enterprises in which their funds have been invested. These shares are transferable and marketable.

Profit-loss sharing counters opened from 1 January 1980 at the five nationalized banks of Pakistan. The counters accepted deposits for varying duration and used them for financing on the basis of al-musharkah, al-mudarabah, bai al-muajjal and bai almurabahah.

Profit-loss sharing ratio used in the interest-free banking model of the Council of Islamic Ideology, Pakistan (1980). The PLS ration is the ratio of financiers' funds with the entrepreneurs' funds. It has been suggested as a monetary tool in lieu of the interest-based bank rate.

Profit-loss sharing system proposed by the Panel of Economists and Bankers and endorsed by the Council of Islamic Ideology, Pakistan (1980). The PLS system is the main plank of Islamization of banks in Pakistan. Under the system the savers deposit their funds on the basis of profit-loss sharing. The banks provide finance on the basis of approved modes such as musharakah, mudarabah, mark-up, mark-down, leasing, lease-purchase and rent-sharing.

A contract of mudarabah wherein the owner of a commodity raw material gives the material to an artisan/worker to manufacture a certain product with the stipulation that the finished product will be sold and the profit will be shared by them.

A proposed instrument of riba-free banking. The certificate would be offered by commercial banks to savers. A profit-sharing certificate involves investing a certain sum of money into short term operations. Its maturity can vary from sixty days to one year. It offers diversification among short-term placements. All these characteristics would make it especially marketable and relatively attractive to savers who desire to stay closer to the higher edge of the liquidity spectrum

Financial instrument of riba-free economy. Indicates deposits with commercial banks on the basis of profit sharing.

Relating to the musharakah financing by banks in Pakistan, it means the rate which is determined after deducting a good management fee from the projected rate of profit and after taking into account the weight age, if any, given to any of the funds deployed. See good management fee.

See profit-sharing certificates.

See profit-sharing deposits.

Participation Term Certificate, a financing instrument used by Islamized banks in Pakistan to replace debentures. Holders of the PTC share in the profit or loss of companies raising finance. Usually issued for a maximum period often years, secured by a charge on the assets of the company, the PTCs have a prior claim on the profits of the company. Any loss is first met from past reserves, and any left-over loss is shared by all providers of the capital including PTC holders. In practice, PTC has imbibed the spirit of interest. The PTC scheme requires a 'preproduction discount rate' on long-gestation period projects. Similarly, when the company does not have profits to pay to holders of PTCs, then it is required to issue additional PTCs in .the name of existing holders, the amount being equal to the expected profit of the PTC holders. In certain cases, the PTC holders may also get equity holdings equal to the loss of the company. The PTC holder does not suffer a loss in any case. Thus the PTC is against the Islamic principles of trade and is more akin to riba.