Tawwaruq Variants in Islamic Finance - Thematic Analysis and Shariah Interpretation

Authors

  • Muhammad Farhan ul Haq Usmani, Dr. Muhammad Ishtiaq, Dr. Rummana Zaheer Author

Abstract

Classical sharia compliant tools of Islamic finance i.e., trade, rental, participatory and service modes, supported with ancillary non-compensatory contracts are tactfully adapted to satisfy market demand of banking and finance industry. The classical structures of these contracts with careful sharia compliant modification such as independent hybrid contracts are whole-heartedly accepted by majority of sharia scholars and sharia conscious stakeholders but some modifications and extensions in murabaha and tawarruq named as organized tawarruq (OT) are a matter of concern, particularly in the academic and scholarly world.This study aims to look into the sharia interpretation of classical tawarruq (CT) and organized tawarruq (OT). Thematic analysis is conducted comparing various regulations and market practices of OT in different jurisdictions to elaborate the interpretation of tawarruq variance in the context of Sharia. CT and OT can be adopted with some adaptations and precautionary measures to validate these transaction from both aspects i.e., ‘substance’ and ‘form’ until the time some better solution is devised to substitute current objectionable structure of OT.

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Published

2021-06-30

How to Cite

Tawwaruq Variants in Islamic Finance - Thematic Analysis and Shariah Interpretation. (2021). COMSATS Journal of Islamic Finance, 6(1). http://ojs.cuilahore.edu.pk/index.php/cjif/article/view/57