ISSN: 2222-6990
Open access
This paper aims to discover the wisdom behind Qur’anic approaches in dealing with the issue of riba (interest) and how these approaches could provide insight for modern Islamic finance players. Based on library research, this study applies the inductive method in dealing with related works of literature. The findings reveal that the prohibition of riba in the Qur’an has occurred gradually, involving four stages. Understanding this wisdom, it is learned that to ensure the growth of the Islamic finance industry, four aspects should be considered: (i) education and information; (ii) regulation and governance; (iii) innovation and research; and (iv) spiritual and awareness. Even though this study relies on secondary sources, it may benefit Islamic finance players in this industry in terms of introducing new policies, developing products, and sustaining operations based on the philosophical perspective of the Qur’an in dealing with riba.
Razak, A. S. A. (2014). “Islamic” or “Islamizing” Banking Product? Reconsidering Product Development’s Approaches in the Malaysian Islamic Banking Industry. Universität Erfurt.
Adis, D. (2014). Contemporary Muslim Reformist Thought and Maq??id cum Ma?la?a Approaches to Islamic Law: An Introduction. In Maqasid Al-Shari’a and Contemporary Reformist Muslim Thought. New York: Palgrave Macmillan.
Adwan, A. A. A. (2008). Bay?al-?Inah wa Hukmuhu f? Islam. Majallah Al-Fath, 32.
Agha, E. (2018). Hidden Traps in Shariah Decision Making. ISFIRE, (December).
Al-Kail?n?, Al-Rahman. (2008). Al-Ta?b?q al-Maq??id? li al-Ahk?m al-Shar?iyyah. Al-Majallah Al-Urduniyyah F? Al-Dirasah Al-Islam?yyah, 3(4).
Al-Qa??an, M. (2006). Mab?h?s f? ?Ul?m al-Qur?n. Beirut: Muassas?h al-Ris?lah al-Nash?run.
Al-Qar??wi, Y. (1980). Al-Hal?l wa al-Har?m f? al-Islam. Beirut: Al-Maktabah al-?sl?m?.
Al-Qar??w?, Y. (2010). Al-Fat?wa al-Sh?zah. Cairo: D?r al-Shuruq.
Al-Qur?ub?, M. (2006). Al-J?mi? li al-Ahk?m al-Qur’?n (A. Al-Turki, Ed.). Beirut: Muassas?h al-Ris?lah al-Nash?run.
Al-??b?n?, M. (2000). Raw?’i al-Bay?n. Beirut.
Al-Sa?d?, A. R. (2013). Taisir al-Karim al-Rahman Fi Tafsir Kalam al-Manan. Maktabah D?r al-Sal?m.
Al-Sh?tib?, I. (2004). Al-Muw?faq?t f? Us?l al-Shar??ah (?Abdullah Al-Darraz, Ed.). Beirut: D?r al-Kutub al-?Ilmiyah.
Al-?obar?, M. (1997). J?mi’ al-Bay?n f? Ta’wil al-Qur?n (?ol?h Al-Kh?lid?, Ed.). Damascus: D?r Q?lam.
Al-Zamakhshari, M. (2006). Tafsir al-Kashaf. Beirut: D?r al-Kutub al-?Ilmiyah.
Al-Zuhaili, W. (2007). Tafsir al-Munir. Beirut: D?r al-Fikr.
Al-Zu?ayl?, M. M. (2000). Al-Tadarruj F? al-Tashr?? Wa al-Ta?b?q F? al-Shar??ah al-Isl?miyyah.
Ariff, M. (1988). Islamic Banking. Asian-Pacijlc Economic Literature, 2(2), 48–64.
Ariff, M., & Iqbal, M. (2011). The Foundations of Islamic Banking: Theory, Practice and Education. Cheltenham: Edward Elgar.
Azmi, Wan, W. N., & Madden, R. (2014). “Dare to Lead : Transformation of Bank Islam Malaysia Berhad.” Asian Institute of Finance (AIF), 1–20.
Bank Negara Malaysia. (2010). Shariah Resolution in Islamic Finance. In Bank Negara Malaysia.
Bank Negara Malaysia. (2017). Islamic Finance Development. In Bank Negara Malaysia. Retrieved from http://www.bnm.gov.my/index.php?ch=en_publication&pg=en_fspr&ac=23&en
Bayindir, S., & Ustaoglu, M. (2018). The issue of interest (riba) in the Abrahamic religions. International Journal of Ethics and Systems, 34(3), 282–303.
https://doi.org/10.1108/ijoes-09-2017-0148
Bhatti, M. I. (2014). Why interest-free banking and finance movement failed in Pakistan. (May). https://doi.org/10.1108/08288660610703320 C.L.J. Arab-Malaysia Finance Bhd vs Taman Ehsan Jaya Sdn Bhd, (2009). 2009.
Chapra, M. U. (2006). The Nature of Riba in Islam. Journal of Islamic Economics and Finance (Bangladesh), 2(1).
Choudhury, M. A., Rahman, A. A. B., & Hasan, A. (2018). Trade versus riba in the Qur’an with a critique of the role of bank-saving. International Journal of Law and Management, 60(2), 701–716. https://doi.org/10.1108/IJLMA-03-2017-0021
Darraz, A. (1951). Riba fi Nazar al-Qanun al-Islami.
DIAW, A. (2015). The Global Financial Crisis and Islamic Finance: A Review of Selected Literature. Journal of Islamic Accounting and Business Research, 6(1), 94–106.
Farooq, M. O. (2005). The Riba-Interest Equation and Islam: Re-examination of the Traditional Arguments.
Farooq, M. O. (2012). Exploitation, profit and the riba-interest reductionism. International Journal of Islamic and Middle Eastern Finance and Management, 5(4). https://doi.org/10.1108/17538391211282818
Hasan, A. (2003). An Introduction to Collective Ijtihad (Ijtihad Jama’i): Concept and Applications. American Journal of Islamic Social Sciences, 20(2), 26–49.
Ibn-Kath?r, I. (2008). Tafs?r al-Qur?n al-?A??m. Beirut: Muassas?h al-Ris?lah al-Nash?run.
Ibn-Qud?mah, ?Abdullah. (1997). al-Mughn?. Riyad: d?r al-?Alam al-Kutub.
Iqbal, M. M. (2010). Prohibition of Interest and Economic Rationality. Arab Law Quarterly, 24(3), 293–308.
Iqbal, Z., & Mirakhor, A. (2007). An introduction to Islamic Finance, theory and practice. Singapore: John Wiley & Sons (Asia) Pte Ltd.
Ishak, M. S. I. (2018a). The Principle of Considering Ma’alat in Islamic Rules?: Do Ends Justify Means?? International Journal of Islamic Thought, 14(Dec), 52–59.
Ishak, M. S. I. (2018b). The Principle of Ma’?l?t as a Response to Ma?la?ah in Islamic Banking: A Theoretical and Empirical Study. University of Aberdeen.
Ishak, M. S. I. (2019). Shar??ah issues on ta?widh in Malaysia. International Journal of Islamic and Middle Eastern Finance and Management, 12(4), 523–531. https://doi.org/10.1108/imefm-03-2018-0117
Ishak, M. S. I., Zain, M. N. A. B., & Ahmad, A. A. (2021a). The ?Urf of Hibah on Deposits: An Analysis in the Light of New Trends in Islamic Financial Industry in Malaysia. International Journal of Fiqh and Usul Al-Fiqh Studies, 5(1), 74–81. Retrieved from https://journals.iium.edu.my/al-fiqh/index.php/al-fiqh/article/view/22
Ishak M. S. I., Robbi, M. A. A., & Nasir, M. N. S. (2021b). The Principle of Tadarruj in Islamic Finance: A Conceptual Review. Journal of Islamic Finance, 10(1), 15–24. Retrieved from https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/558
Islamic Financial Services Board (IFSB). (2010). Islamic Finance and Global Financial Stability. Global Financial Crisis, 27.
ISRA. (2010). Islamic Financial System: Principles & Operations. Kuala Lumpur: ISRA.
Kamali, M. H. (2016). Principles of Islamic Jurisprudence (Vol. 15). Retrieved from http://www.jstor.org/stable/1051529?origin=crossref
Kwan, S. (2011). Financial Modernization and Banking Theories. FRBSF Economic Letter.
Lahsasna, A. (2014). Shar??ah Issues and Resolutions on Contemporary Islamic Banking and Finance. Kuala Lumpur: IBFIM.
Laldin, M. A., & Furqani, H. (2018). Islamic Financial Services Act (IFSA) 2013 and the Shar??ah-compliance requirement of the Islamic finance industry in Malaysia. ISRA International Journal of Islamic Finance, 10(1), 94–101. https://doi.org/10.1108/IJIF-12-2017-0052
MIFC. (2015). Islamic Finance Talent Development?: Global Initiatives. Kuala Lumpur.
Muda, M., & Jalil, A. (2007). Islamic Financial Product Development: Shariah Analysis. In IIUM International Conference on Islamic Banking and Finance.
Muslim, M. bin H. (2000). ?ah?h Muslim. Riyad: Darussalam.
Nader, J. (n.d.). Islamic Finance in Luxembourg. Global Asset Management & Servicing Review.
Razi, N. (2014). Socio-Ethical Dimensions of Islamic Economy and Issue of Modern Interest and riba: An Analysis in the Light of the Economy of the Muslim World. Journal of Islamic Banking and Finance, 2(2), 27–42.
Shaharuddin, A. (2015). Harmonizing Shari’ah Rulings in Islamic Finance: Startegies and Challenges. The Journal of Muamalat and Islamic Finance Research (JMIFR), 12(1).
Shib?r, M. (2007). Al-Mu??mal?t al-M?l?ah al-Mu???iroh f? al-Fiqh al-Islam?. Amman: D?r al-Naf?is.
Suharto, U. (2018). Riba and interest in Islamic finance?: semantic and terminological issue. International Journal of Islamic and Middle Eastern Finance and Management, 11(1), 131–138. https://doi.org/10.1108/IMEFM-08-2016-0109
Ali, S. (2007). Financial Distress and Bank Failure: Lessons From Closure Of Ihlas Finans in Turkey. Islamic Economic Studies, 14(1–2), 1–52.
Syed, E. A., & Omar, M. (2017). Hiyal in Islamic Finance: A Recognition of Genuine Economic Need or Circumvention of Riba? Qualitative Research in Financial Markets, 9(4), 382–390. Retrieved from 0041.
Haji, T. (n.d). Tabung Haji Background. Retrieved September 20, 2017, from http://www.tabunghaji.gov.my/background.
Usman, H., Tjiptoherijanto, P., Balqiah, T. E., & Agung, I. G. N. (2017). The role of religious norms, trust, importance of attributes and information sources in the relationship between religiosity and selection of the Islamic bank. Journal of Islamic Marketing, 8(2), 158–186. https://doi.org/10.1108/JIMA-01-2015-0004
Wardhany, N., & Arshad, S. (2012). The Role of Shariah Board in Islamic Banks: A Case Study of Malaysia, Indonesia and Brunei Darussalam. In 2nd ISRA Colloquium “Islamic Finance in a Challenging Economy: Moving Forward.” Kuala Lumpur.
Yan?kkaya, H., & Pabuçcu, Y. U. (2017). Causes and solutions for the stagnation of Islamic banking in Turkey. ISRA International Journal of Islamic Finance, 9(1), 43–61. https://doi.org/10.1108/IJIF-07-2017-005
Yusof, S. M. (2017). A Study on Bay’ al-Mur?ba?ah in Islamic Law and Its Application in Malaysian Islamic Banks. University of Aberdeen.
Zaman, R., Roudaki, J., & Nadeem, M. (2018). Religiosity and corporate social responsibility practices: evidence from an emerging economy. Social Responsibility Journal, 14(2), 368–395. https://doi.org/10.1108/SRJ-10-2017-0204.
Iqbal, Z., & Mirakhor, (2007). An Introduction to Islamic Finance: Theory and Practice, Second Edition pp.113-136.
In-Text Citation: (Nasir & Ishak, 2021)
To Cite this Article: Nasir, N. S. M., & Ishak, M. S. I. (2021). Replacing Conventional Finance with Islamic: A Wisdom from the Qur’an. International Journal of Academic Research in Business and Social Sciences, 11(11), 617 – 632.
Copyright: © 2021 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode