Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions

Islam has prohibited riba (interest) on loan given. When a lender lends money to another person, he is allowed to get back the capital amount only and not any additional amount which is usually fixed interest on the capital. Taking interest on loan given caused cruelty and injustice to poor people...

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Main Authors:	Jalil, Md Abdul, Rahman, Muhammad Khalilur
Format:	Article
Language:	English
Published:	Centre for Promoting Ideas, USA 2010
Subjects:	HG Finance
Online Access:	http://irep.iium.edu.my/3267/ http://irep.iium.edu.my/3267/ http://irep.iium.edu.my/3267/1/Islamic_Financial_Transactions_IJBSS.pdf

id	iium-3267
recordtype	eprints
spelling	iium-32672011-10-10T02:13:22Z http://irep.iium.edu.my/3267/ Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions Jalil, Md Abdul Rahman, Muhammad Khalilur HG Finance Islam has prohibited riba (interest) on loan given. When a lender lends money to another person, he is allowed to get back the capital amount only and not any additional amount which is usually fixed interest on the capital. Taking interest on loan given caused cruelty and injustice to poor people in the society during prophet Muhammad’s time who were unable to pay back the capital and the interest. So, Prophet Muhammad encouraged the rich people to give qard al-hasan (interest free loan) to the poor and needy people to help them to solve their problems. That’s why Allah (the Creator) prohibited taking interest but encouraged people who have money to invest the money in business. The profit obtained from business is permitted (halal) but fixed rate interest taken on loan given to a person is riba (interest) and it is prohibited. As Allah (the Creator) has prohibited interest, Muslims are prohibited to give interest, to take interest and to write down the interest transaction. Hence, Muslim scholars have invented some Islamic transactions which do not involve interest and Islamic banks are adopting these Islamic transactions. The objective of this paper is to narrate and analyze the Islamic banking transactions which are interest free and they are considered as alternatives to the conventional banking transactions. Centre for Promoting Ideas, USA 2010-12 Article PeerReviewed application/pdf en http://irep.iium.edu.my/3267/1/Islamic_Financial_Transactions_IJBSS.pdf Jalil, Md Abdul and Rahman, Muhammad Khalilur (2010) Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions. International Journal of Business and Social Science, 1 (3). pp. 220-234. ISSN 2219-1933 (P), 2219-6021 (O) http://www.ijbssnet.com
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG Finance
spellingShingle	HG Finance Jalil, Md Abdul Rahman, Muhammad Khalilur Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions
description	Islam has prohibited riba (interest) on loan given. When a lender lends money to another person, he is allowed to get back the capital amount only and not any additional amount which is usually fixed interest on the capital. Taking interest on loan given caused cruelty and injustice to poor people in the society during prophet Muhammad’s time who were unable to pay back the capital and the interest. So, Prophet Muhammad encouraged the rich people to give qard al-hasan (interest free loan) to the poor and needy people to help them to solve their problems. That’s why Allah (the Creator) prohibited taking interest but encouraged people who have money to invest the money in business. The profit obtained from business is permitted (halal) but fixed rate interest taken on loan given to a person is riba (interest) and it is prohibited. As Allah (the Creator) has prohibited interest, Muslims are prohibited to give interest, to take interest and to write down the interest transaction. Hence, Muslim scholars have invented some Islamic transactions which do not involve interest and Islamic banks are adopting these Islamic transactions. The objective of this paper is to narrate and analyze the Islamic banking transactions which are interest free and they are considered as alternatives to the conventional banking transactions.
format	Article
author	Jalil, Md Abdul Rahman, Muhammad Khalilur
author_facet	Jalil, Md Abdul Rahman, Muhammad Khalilur
author_sort	Jalil, Md Abdul
title	Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions
title_short	Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions
title_full	Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions
title_fullStr	Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions
title_full_unstemmed	Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions
title_sort	financial transactions in islamic banking are viable alternatives to the conventional banking transactions
publisher	Centre for Promoting Ideas, USA
publishDate	2010
url	http://irep.iium.edu.my/3267/ http://irep.iium.edu.my/3267/ http://irep.iium.edu.my/3267/1/Islamic_Financial_Transactions_IJBSS.pdf
first_indexed	2023-09-18T20:11:02Z
last_indexed	2023-09-18T20:11:02Z
_version_	1777407479276109824

Financial transactions in Islamic banking are viable alternatives to the conventional banking transactions

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