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Depositor’s Profit After IRR
The system displays the depositors profit after deducting the Investment Risk Reserve (IRR)
amount.
3.5.1.4 Profit Equalization Amount
Specify the following details.
Profit Equalization Amount
If credit is selected then the Amount specified in the LCY field and Percentage mentioned in the
PEA % for dep investment will be added to the total depositor profit amount (in case of loss
amount will be debited from the PEA GL & distributed to the depositor).
If Debit is selected then the Amount specified in the LCY field and Percentage mentioned in the
PEA % for dep investment will be deducted from the total depositor profit amount (In the
months that your bank makes more-than-expected profit, you can set aside some profit as ‘Profit
Equalization Amount’. You can use this amount to distribute to the depositors in the months of
losses).
Lcy
You can also specify the PEA as a fixed amount in the bank’s local currency.
PEA % for DEP Investment
In the months that your bank makes more-than-expected profit, you can set aside some profit as
‘Profit Equalization Amount’. You can use this amount to distribute to the depositors in the months
of losses. Specify the PEA as a percentage of the depositors’ profit.
Investment Risk Reserve
Specify the following details.
Credit/Debit
Indicate whether the IRR amount should be deducted from or added to the depositor’s profit.
Select one of the following options:

Credit - Choose this to add the IRR amount to the depositor’s profit.

Debit - Choose this to deduct the IRR amount from the depositor’s profit.
Lcy
Specify the IRR amount that should be deducted from the depositor’s profit after allocation of
PEA and before deduction of the Mudarib fee. Alternatively, if you have specified the IRR% for
depositor’s investment, the system will compute the IRR amount in local currency and display it
here when you click the save icon.
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