The Social Construction of Shar'a : Bank Interest, Home Purchase, and Islamic Norms in the West

Critical Muslim Intellectuals’ discourse and the issue of ‘Interest’ (ribā): Implications for Islamic accounting and banking

“…The issue of ribā and bank-interest still provokes controversial debates amongst the ulamā (Muslim jurists) (Caeiro, 2004;Salleh et al, 2012) 1 . The main controversy surrounding the issue is related to the different interpretations of the Qurānic injunctions in relation to ribā, where different schools of thought (Mālikī, Shāfiī, Hanbalī, Hanafī and Shiī) have had varied interpretations of the meaning of ribā (Noorzoy, 1982).…”

“…The main controversy surrounding the issue is related to the different interpretations of the Qurānic injunctions in relation to ribā, where different schools of thought (Mālikī, Shāfiī, Hanbalī, Hanafī and Shiī) have had varied interpretations of the meaning of ribā (Noorzoy, 1982). Debates are still taking place amongst Muslim ulamā on whether what is meant by ribā in the Qurān and Sunnah (the oral tradition attributed to the Prophet Muhammad) is usury or interest (Noorzoy, 1982;Caeiro, 2004). Caeiro (2004) explains that the ulamā's position regarding the issue of ribā and bank-interest ranges between three approaches: the idealist, the pragmatic and the liberal.…”

“…Debates are still taking place amongst Muslim ulamā on whether what is meant by ribā in the Qurān and Sunnah (the oral tradition attributed to the Prophet Muhammad) is usury or interest (Noorzoy, 1982;Caeiro, 2004). Caeiro (2004) explains that the ulamā's position regarding the issue of ribā and bank-interest ranges between three approaches: the idealist, the pragmatic and the liberal. The idealist approach 'restricts Islamic banking to the contracts allowed in classical Islamic Law (fiqh) and considers bank interest a grave sin'.…”

“…They argue for a zero interest rate on transactions (Noorzoy, 1982;Caeiro, 2004;Saeed, 2011) 2 . One of the most influential scholars, who has had a significant impact on the contemporary Islamic banking system and thought, is mufti Muhammad Taqi Usmani 3 .…”

“…Islamic banking, economics and finance have been largely connected to notions of independence as well as national and religious identity's issues (El-Gamal, 2003;Caeiro, 2004;Kuran, 2006). El-Gamal (2003) explains that despite this initial desire to develop an independent Islamic finance and economics, the fields have failed 'to escape the centripetal pull of Western economic thought, and has in many regards been caught in the intellectual web of the very system it set out to replace'.…”