Theory of Gharar and its interpretation of Risk and Uncertainty from the perspectives of Authentic Hadith and the Holy Quran: A Qualitative Analysis

Waeibrorheem Waemustafa () and Suriani Sukri

MPRA Paper from University Library of Munich, Germany

Abstract: The inconclusive definition of Gharar as risk and uncertainty can be commonly found in the contemporary literatures. The difference in the meaning of Gharar is generally thought to be due to the difference in the jurisprudence point of views. The current practice is that there is no standard in defining the terms. Hence, this study introduces steps in defining terminology namely; dictionary definition, Arabic linguistic definition and jurisprudence definition. However, the philosophy of risk as stated in the Holy Quran and Hadith differs from the concept of risk in conventional finance. The finding reveals that risk in Islamic banking refers to a wider interpretation covering the concepts gharar. mysir, mukhatarah, al ghunm bil ghurm and al kharajbil daman than the element of uncertainty as in the conventional finance.

Keywords: Gharar; Mukhatarah; Mysir; al ghunm bil ghurm and al kharaj bil daman. (search for similar items in EconPapers)
JEL-codes: G00 G02 G29 G32 K00 P4 P40 P5 P51 (search for similar items in EconPapers)
Date: 2015-07-21, Revised 2016-01-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in International Journal of Economic Perspectives 2.10(2017): pp. 1-27

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