A comparative study of inside money creation with »La-Zarar rule« (rule of the prohibition of detriment)

Document Type : Original Article

Authors
hadi arabi 1
said farahani 2
مهدی khoshakhlagh 3
1 دانشیار گروه اقتصاد اسلامی، دانشکده علوم اقتصادی و اداری، دانشگاه قم، قم، ایران
2 Qom University research assistant
3 student phd of qom university
10.30497/sj.2024.245337.1315
Abstract
A comparative study of inside money creation with »La-Zarar rule« (rule of the prohibition of detriment)

Inside money is a credit that created by commercial banks. Some jurists and Islamic economists disaccord with money creation by commercial banks. The »La-Zarar rule« is one of the important reason that is cited for the prohibition of creating inside money. This article reconsiders inside money creation whether it is analog channel of the »La-Zarar rule« so Inside money creation would be unlawful.

The article concludes that proscribing of inside money creation by »La-Zarar rule« necessitates the following preconditions:

- The inside creation of money almost leads to inflation

- Money is not a »Mesli commodity« (replaceable commodity )

- The »La-Zarar rule« precedence over the »Sultanate rule«.(absolute legal power of the owner to exercise dominion or control over their own property)

- Money considered a legal contract

- The inflation is sudden

- the »La-Zarar rule« includes positive and negative commandment of Shariah.
Keywords
Bank
Islamic banking
money creation
inside money creation
la-zarar rule

  • Receive Date 28 October 2023
  • Revise Date 23 January 2024
  • Accept Date 01 February 2024