Research Information System
in: Contemporary Issues in Islamic Law, Economics and Finance: A Multidisciplinary Approach, Flavia Cortelezzi Alessandro Ferrari, Editor, Routledge, London/New York , Turin, pp.13-30, 2022
There is a consensus among economists about the crucial role of
financial markets in economic development by allocating savings into investment
channels. However, some of the allocation mechanisms of conventional financial
markets conflict with Islamic teachings. These conflicts raise dilemmas for
true Muslims who want to simultaneously improve their economic status and live
in accordance with the teachings of Islam.
Primary sources of Islam have failed to provide definite answers for
these dilemma, leading Muslims to turn to Islamic jurists for a more comforting
answer. However, their answers were far from uniform. One group of jurists argued
that conventional financial instruments are compliant with Islam and allowed Muslims
to use them, whereas another group did not. Whereas some were satisfied with
the arguments of the first group, followers of the second group have been
pleased to see that jurists, in cooperation with financial professionals and
lawyers, have developed new financial instruments that are claimed to be compatible
with Islamic values. This development was followed by debates regarding the compliance
of these new financial instruments with Islam. This chapter presents an
overview of these discussions and argues that involvement in an Islamic
financial transaction is far from an easy task for an inquisitive Muslim who
wants to live a life in harmony with Islamic principles.