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Collateral (Al-Rahn) as Practiced by Muslim Funds of North India الرهن كما تتعامل به الصناديق الإسلامية في شمال الهند

Author

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  • JAVED AHMED KHAN

    (Academy of the Third World Studies , Jamia Millia Islamia ,New Delhi, India , and Department of Economics, Aligarh Muslim University, Aligarh, India)

  • SHARIQ NISAR

    (Researcher Department of Economics Aligarh Muslim University Aligarh, India)

Abstract

The present study, aims at highlighting the issues related to collateral as practiced by the five leading representative Muslim Funds of Northern India, which is a densely Muslim populated area. The study, in particular, examines the need for collateral, its composition, safety and costs involved, modus operandi, socio-economic impacts and its legal status in the context of India. It must be noted here that despite the non-recognition of al-rahn under the Indian law, these Funds have done impressive works by providing interest free loans to the needy people. As for their modus operandi, it has been argued that these Funds must follow the prescribed rules and regulations in order to fully expand in India’s current liberalized financial market. This study also highlights the great potential of the expansion of these Funds in the area of equity and venture finance. هذه الدراسة تركز على الصناديق الإسلامية، وتهدف إلى إبراز القضايا المتعلقة بالرهن كما هو معمول به في خمسة صناديق إسلامية رئيسية في شمال الهند، وهي منطقة يقطنها عدد كبير من المسلمين. ويحاول الباحثان في هذه الدراسة بيان الحاجة إلى الرهن وعناصره، وسلامته ، وتكلفته ، وكيفية استخدامه، وآثاره الاجتماعية والاقتصادية، ولوائحه في القانون الهندي. وجدير بالذكر أن الرهن المعمول به في الصناديق الإسلامية، وإن كان لا يعترف به القانون الهندي ، إلا أنه يلعب دورا مهما في توفير القروض بلا فوائد للمحتاجين. وأما ما يتعلق بطريقة استخدامه، فالدراسة تؤكد على ضرورة اتباع القوانين والضوابط المشروعة لتوسيع أعمالها في السوق المالي الهندي القائم على النظام الحر. كما تشير الدراسة إلى إمكانيات كبيرة لهذه الصناديق في مجال التمويل المبني على رأس المال والتمويل المغامر.

Suggested Citation

  • Javed Ahmed Khan & Shariq Nisar, 2004. "Collateral (Al-Rahn) as Practiced by Muslim Funds of North India الرهن كما تتعامل به الصناديق الإسلامية في شمال الهند," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 17(1), pages 17-34, January.
    • Handle: RePEc:abd:kauiea:v:17:y:2004:i:1:no:2:p:17-34
    DOI: 10.4197/islec.17-1.2
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    References listed on IDEAS

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    1. Munawar Iqbal & David T. Llewellyn (ed.), 2002. "Islamic Banking and Finance," Books, Edward Elgar Publishing, number 2499.
    2. Khan, Tariqullah, 1995. "Demand For And Supply Of Mark-Up And Pls Funds In Islamic Banking: Some Alternative Explanations," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 3, pages 1-46.
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