Deferment of Both Counter Values in Financial Transactions Maqasid Analysis and Its Impact on Money Exchanges

Abstract

Shariah texts forbid deferment of both counter values in the commutative transactions. However, it is obvious that contemporary juristic opinions abide by this prohibition without appreciating its Shariah objectives. This is evident as some of these opinions unjustifiably differentiate between similar applications, or they violate the prohibition by allowing stratagems that eventually lead to having both values deferred. The paper comes to analyze the Shariah objectives of the prohibition of such transactions, and then to investigate the contemporary applications that relate to this prohibition particularly to money exchanges. Based on the identified Shariah objectives, and based on the extent of the contemporary need to these applications, the paper goes then to use that as criteria to determine the acceptable and the unacceptable applications of money exchange, indicating their positive or negative effects. The study primarily indicates that while some transactions pertaining to the point of discussion can with conditions be validated in view of various considerations, the Shariah for riba and gharar reasons cannot condone some other transactions. The paper recommends that the Shariah scholars collaborate with the Muslim economists and financial experts to reexamine the excising structures of Islamic financial law on Maqasid basis, in order to remove unnecessary rigidity and achieve genuine observance of the applicable Shariah rules.

Keywords

• islamic finance
• riba
• gharar
• deferment of counter values
• money exchange