Exploring the Possibility of Adjusting the Fiqh Principle of Annulling the Usurious Sale to Banking Muzariba

Qanavati, Mohammadtaghi; Andalib, Mohammad

doi:10.30497/irj.2022.76388

Exploring the Possibility of Adjusting the Fiqh Principle of Annulling the Usurious Sale to Banking Muzariba

Document Type : Original Article

Authors

mohammadtaghi qanavati ¹

Mohammad Andalib ²

¹ Ph.D. student of Fiqh and Law, Imam Sadiq university, Tehran, Iran

² PhD student in economic sciences, Imam Sadiq University, Tehran, Iran

10.30497/irj.2022.76388

Abstract

Muzariba has been a very important type of contract much favored in usury free banking and has appeared in Iranian Usury Free Banking Act. The spirit dominating Islamic muzariba is sharing the transaction risk between the investor and the agency, a fact that has rendered the whole activity justice-based. Besides, some fiqh principles related to profit making prove the necessity of this kind of risk sharing to the extent that if neglected the whole financial contracts will be rendered void. The study is to seek how to adjust the principle of annulling the usurious sale to muzariba. According to this principle, in case the individual lacks guarantee in regard to his property, the ensuing profits do not belong to him. The results show the provision included in the contract denies guarantee for the bank as the owner of the capital, while it has been supposed to share the profit according to the contract. Hence, any “solh” or settlement provision in contract is practically breaching the principle and will lead to the annulment of muzariba.

Keywords

Profit without Liability

Muzariba

Guarantee

Banking