Riba in Islamic Jurisprudence: The Role of 'Interest' in Discourse on Law and State
Netzer, Miriam
2004
- Submitted in partial fulfillment of the degree Master of Arts in Law and Diplomacy at the Fletcher School of Law and Diplomacy. Abstract: The study of Islamic Finance provides a unique opportunity to examine both the evolution of Islamic legal science, and the current struggle between fundamentalist and moderate movements over the role of Shari'a law in the modern legal system of the Islamic state. ... read moreShari'a compliant financial instruments are those that do not contravene prohibitions in Islamic revelatory texts against riba, 'interest,' and gharar, 'speculation,' in business transactions. Although making profit off loans is illicit according to the Quran, several classical jurisprudential methodologies have been employed to create financial instruments, which concur with the letter of the law, if not the spirit. The existence of these products points to a tension between textualism and essentialism at the core of Islamic legal theory. The tendency to apply a rigid 'textualist' framework on to Shari'a law in the area of finance is countered by the growing significance of Islamic Economics, which concerns itself with wider issues of economic and social justice and permeates religious/political discourse today. The issuance of a fatwa in December 2003 by the premier institute of Sunni legal scholarship, Al-Azhar University of Cairo, permitting pre-specified fixed rate bank deposits, ignited a stormy debate whose backdrop is the 40-year struggle in the State of Egypt between proponents of positive and divine law - a debate which is being settled in the Egyptian Supreme Constitutional Court. It is with surprising tenacity that the issue of Riba inserts itself into contemporary discourse about authority and authenticity in Islam. It is well worth an examination.read less
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