FINANCIAL INTERMEDIATION IN THE FRAMEWORK OF SHARI'AH

Hussein Hamed Hassan
Additional contact information
Hussein Hamed Hassan: International Islamic University, Islamabad, Pakistan

Islamic Economic Studies, 1993, vol. 01-1, 21-35

Abstract: The paper seeks to examine the position of the shari'ah on the creation and transfer of financial instruments. In this connection, the paper also highlights the role of financial instruments as a method of mobilizing financial resources for investment and explains the rules and regulations governing the different contracts of investment, as well as their returns, from the viewpoint of shari'ah. The paper argues that financial instruments represent a common share in the ownership and that they have limited liability, but where financial instruments stand for debts payable by a third party, the negotiation of debts is stipulated by shari'ah. The paper argues that it is justified to issue several financial certificates for one single salam sale operation. Shari'ah does not, however, allow salam certificates to be sold at a price other than its face value before the delivery of the goods in question. It is maintained that financial instruments can be issued for specific and general types of investment having different maturities. The proceeds of financial instruments resulting from their sales can be invested through various modes of Islamic financing, such as leasing, equity participation, etc.

Date: 1993
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.irti.org/English/Research/Documents/IES/159.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:isecst:0138

Access Statistics for this article

Islamic Economic Studies is currently edited by Salman Syed Ali and Anis Ben Khedher

More articles in Islamic Economic Studies from The Islamic Research and Training Institute (IRTI) Contact information at EDIRC.
Bibliographic data for series maintained by IRTI Staff () and ().