Jurisprudential Developments in Loan Provisions: An Analytical Study of Contemporary Financial Issues

Abstract

This research paper addresses the contemporary jurisprudential developments related to loans and credit transactions, which are essential aspects of social and economic life. The study emphasizes that Islamic Sharia places significant importance on financial transactions to prevent the unlawful consumption of wealth and to ensure justice among individuals. The research identifies the nature of loans as charitable contracts intended for assistance and social solidarity, rather than for generating profit. It meticulously examines five contemporary financial issues: lending via bank checks and the conditions for their validity, employee saving associations (the "Jam'iyah") and the differing views of Maliki and Hanbali scholars regarding their permissibility, the combination of currency exchange and bank transfers, repaying loans in a different currency based on the exchange rate at the time of settlement, and the permissibility of returning a loan with an unconditioned gift. The study concludes that Muslims must understand Sharia rulings before engaging in these transactions to ensure they remain free from Riba and ambiguity.