Monday, January 16, 2017

Islamic finance in Europe (23)

Continuation
The author writes:
Some scholars have argued that the prohibition of riba refers to practices adopted in the pre-Muslim “time of ignorance” (riba al-jahiliyya).
That it should not apply to all forms of interest.
Islamic scholars have also tried to provide a theoretical basis for the ban, in terms of:
§  ethics;
§  and economics.
There is no consensus amongst scholars on how to identify the illah (effective cause).
It constitutes the criterion for acceptability or non-acceptability in accordance with Shari’ah rulings on the prohibition of riba.
However, the prohibition of interest is based on the assumption that there can be no gain without risk-taking.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)

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