An Introduction to Islamic Finance: Theory and Practice

50 AN INTRODUCTION TO ISLAMIC FINANCE The Qur’an (4:11–12) clearly specifi es the exact manner in which the shares of heirs are ...

The Economic System 51 As we have seen, Islam recognizes as inviolable the right of those unable to actualize their potential to ...

52 AN INTRODUCTION TO ISLAMIC FINANCE The incentive-motivation aspects of the Islamic system have their ori- gin in the basis of ...

The Economic System 53 through his soul, which is in ceaseless journey towards the fi nal meeting with Allah (swt). The sole dec ...

54 AN INTRODUCTION TO ISLAMIC FINANCE his daily life and in his dealings with others. It represents a defense mecha- nism, an “i ...

The Economic System 55 basic Islamic values, which, ipso facto, represent the growth of a Muslim per- sonality. The well-knit wa ...

56 AN INTRODUCTION TO ISLAMIC FINANCE See 16: 91-92; 17:34. See 23:8. See, for example, 5:1; 2:282; 6:151 153; 9:4; 16:91–4; 17 ...

57 CHAPTER 3 Riba vs. Rate of Return A s set out earlier, the Islamic economic system is a rules - based system founded on the p ...

58 AN INTRODUCTION TO ISLAMIC FINANCE THE CONCEPT OF RIBA IN ISLAM Literally, the Arabic term riba refers to excess, addition an ...

Riba vs. Rate of Return 59 Old Testament (Leviticus 25:37). Whereas the Old Testament prohibits quantitative increases, riba al ...

60 AN INTRODUCTION TO ISLAMIC FINANCE well documented. Considering that the economy during that time was pri- marily an agricult ...

Riba vs. Rate of Return 61 In refuting the claims that prohibition was meant for excessive interest only, Muslim scholars argue ...

62 AN INTRODUCTION TO ISLAMIC FINANCE The lending of money is a currency transaction that is treated as being simi- lar to the e ...

Riba vs. Rate of Return 63 in an agreed ratio whereas losses are borne in the ratio of the respective capital contributions. The ...

64 AN INTRODUCTION TO ISLAMIC FINANCE rates. Some also argue that human wisdom and comprehension are limited compared to the kno ...

Riba vs. Rate of Return 65 interest is a property right that falls outside the legitimate framework of individual property right ...

66 AN INTRODUCTION TO ISLAMIC FINANCE LACK OF THEORY OF INTEREST Islamic scholars advocating the elimination of interest from th ...

Riba vs. Rate of Return 67 economy, or that of any tenable scheme of social justice, for the state to attempt to enforce an unco ...

68 AN INTRODUCTION TO ISLAMIC FINANCE increase in the debt–equity ratio in the fi nancing of a given investment increases its ri ...

Riba vs. Rate of Return 69 womb, or a runaway animal. All such cases involve the sale of an item that may or may not exist. More ...