Why an Interest-Free Economy was Instituted from Early Religious Zeal?
At the end of 19th century, the Muslim scholars realized that the current banking system and economy was interest-based (riba) in all forms of transactions whether commercial or non-commercial. After the 20th century, proponents of Islamic economics put forward the establishment of a modern banking system that adhered to sharia principles and banned all forms of riba. It is important to note that the restriction on interest (riba) was also prevailed even among the non-Muslims and the origins of interest prohibition can be traced back to the Jewish and Christian faiths. However, the issue of prohibiting interest in modern financial system is still a matter of debate among Islamic jurists and this often cause confusion and inconsistency as to which the case of riba can be applied. This article argues that, whereas riba is expressly prohibited in all aspects of religion in the classical religious context, the modern practice of the interest system in Islamic finance is still debated in the context of contemporary society.
Ahmad, Abu Umar Faruq. Developments in Islamic Banking Practice: The Experience of Bangladesh. Universal Publisher, 2010.
Ahmad, Abu Umar Faruq, and M Kabir Hassan. "The Time Value of Money Concept in Islamic Finance." American Journal of Islamic Social Sciences 23, no. 1 (2006): 66.
Alrifai, Tariq. Islamic Finance and the New Financial System : An Ethical Approach to Preventing Future Financial Crises. Singapore: Wiley, 2015.
Arfazadeh, Homayoon. "A Practitioner's Approach to Interest Claims under Sharia Law in International Arbitration." In Interest, Auxiliary and Alternative Remedies in International Arbitration, edited by Filip De Ly and Laurent Levy, 211-16: International Chamber of Commerce, 2008.
Bhatti, Maria. Islamic Law and International Commercial Arbitration. Milton: Routledge, 2018.
Djamil, Fathurrahman. Metode Ijtihad Majlis Tarjih Muhammadiyah [the Method of Ijtihad of Majlis Tarjih Muhammadiyah]. Jakarta: Logos, 1995.
Iqbal, Zamir, and Abbas Mirakhor. An Introduction to Islamic Finance : Theory and Practice. Hoboken, Singapore: John Wiley & Sons, Incorporated, 2011.
Islahi, Abdul Azim. "History of Islamic Banking and Finance." Intellectual Discourse 26, no. 2 (2018): 403-29.
Kaiser, Walter C., Tremper Longman, and David E. Garland. Exodus: The Expositor's Bible Commentary. Zondervan, 2017.
Khan, Muhammad Akram. What Is Wrong with Islamic Economics?: Analysing the Present State and Future Agenda. Edward Elgar Publishing, 2013.
Nyazee, Imran Ahsan Khan. The Concept of Riba and Islamic Banking. 2 ed.: CreateSpace Independent Publishing Platform, 2016.
Rahman, Khalid, and Mushfiq Ahmed. Towards Islamic Banking Experiences and Challenges: A Case Study of Pilgrims Management & Fund Board, Malaysia Edited by 1. Islamabad: Institute of Policy Studies, 2000.
Saeed, Abdullah. "Indonesian Islamic Banking in Historical and Legal Context." In Indonesia: Law and Society, edited by Tim Lindsey, 323-38. Leichardt, NSW.: The Federation Press, 1999.
———. Islamic Banking and Interest: A Study of the Prohibition of Riba and Its Contemporary Interpretation. Studies in Islamic Law and Society. 2nd ed. Leiden: E.J. Brill, 1999.
Shahar, Wan Shahdila Shah, Wan Shahzlinda Shah Shahar, Nooraimi Mohd Puad, Nurauliani Jamlus Rafdi, Sri Wahyu Sakina Ahmad Sanusi, and Wan Suraya Wan Hassin. "The Historical Development of Islamic Banking." Paper presented at the The 4th International Conference on Management and Muamalah Putrajaya, Malaysia, 7 November 2017 2017.
Smith, William B, and Donald Haggerty. Modern Moral Problems: Trustworthy Answers to Your Tough Questions. Ignatius Press, 2012.
Usmani, Muhammad Taqi. An Introduction to Islamic Finance. Muftitaqiusmani, 1998.
Yusuf, Muhammad Yasir. "Dinamika Fatwa Bunga Bank Di Indonesia: Kajian Terhadap Fatwa Mui, Muhammadiyah Dan Nahdlatul Ulama [the Variety of Fatawa on Bank Interest in Indonesia: The Analysis of Fatwa Mui, Muhammadiyah and Nahdlatul Ulama]." Media Syariah 14, no. 2: 151-59.
Copyright (c) 2021 Romi Adetio SETIAWAN
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under Creative Commons Attribution NonCommercial No Derivatives 4.0 Australia that allows others to share the work with acknowledgement of the work’s authorship and initial publication in this journal.