Prohibition of Riba interest and its philosophy : Islamic monetary operations instruments

Fatawa Question

[Question one] : Dear Mr. Monzer Kahf, Hope you are doing well, and your flight from Bishkek was enjoyable. I also hope that you liked our country. As you remember, we had a conversation about Islamic monetary operations instruments and you suggested that liquidity absorbing instruments based on Qard-Hasan and al-Wadiah agreements are not advisable to use. I would be very grateful to you if you could provide me with more detailed information on why it is not advisable to use these instruments. And also I would be very grateful to you if you could provide me with some information about Islamic monetary operations instruments that are in standard practice. Thank you in advance. Looking forward to hearing from you soon. Faithfully yours, [Question two] : Dear Mr. Monzer Kahf, Assalamu Alaykum Wa Rahmatu Allahi Wa Barakatuh Thank you indeed for your answer. It is very valuable for us. So Qard Hassan cannot be used as monetary operations instrument, but still I have a question concerning Wadiah Yad Dhamanah. I studied Malaysian Islamic monetary instruments and i found out that in Malaysia they widely use Wadiah agreement as a liquidity absorbing instrument. I would be very grateful to you if you could give your point of view on this. cid : image001.jpg@01CA0A40.559 BD0A0 Faithfully yours, Aibek

Fatwa

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Publication Date

2009-07-22

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Derivative securities
• Liquidity(Economics)
• Usury
• al-Qard al-Hasan

No. of Pages

5

Data Type

Fatawa

Language

English

Record ID

BIM-729582

• APA
• MLA
• AMA