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Contempoary Islamic modes of finance betweem the technicalities of contracts and Shariah objectives

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  • Abozaid, Abdulazeem

Abstract

Some contemporary Islamic banking and finance practices have raised legal controversies that arguably eliminate any substantial differences between them and their conventional counterparts. These practices seek their legitimacy from adherence to merely contractual requirements in terms of form and structure, far from considering and looking into the contractual substance and content. These controversial practices of Islamic banks are thought to pose a threat to this emerging industry, and they have somehow led to the distortion of the religion in the eyes of the discerning public and the non-Muslims. This paper examines, through a maqasidi approach, the most controversial financing modes adopted by different Islamic financial institutions, and discusses the various justifications provided to support their legitimacy. The paper also outlines the prospectus of what constitutes a genuine Shariah compatible product.

Suggested Citation

  • Abozaid, Abdulazeem, 2010. "Contempoary Islamic modes of finance betweem the technicalities of contracts and Shariah objectives," MPRA Paper 93408, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:93408
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    More about this item

    Keywords

    Islamic finance; Islamic banking; cash finance; controversial Islamic fianance.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • K1 - Law and Economics - - Basic Areas of Law

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