Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices

The objective of this study is to verify the Shari'ah position on the existence of capital in joint ventures based on musharakah and mudarabah, and its relevance and implications in the context of joint ventures formed between Islamic banks and clients in the course of financing on equity basi...

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Main Author:	Sadique, Muhammad Abdurrahman
Format:	Article
Language:	English
Published:	International Islamic University 2009
Subjects:	HG1501 Banking HG201 Money KBP173.25 Islamic law and other disciplines or subjects
Online Access:	http://irep.iium.edu.my/4356/ http://irep.iium.edu.my/4356/ http://irep.iium.edu.my/4356/1/IIUMJEMVol.17No.2%282009%29209-30.pdf

id	iium-4356
recordtype	eprints
spelling	iium-43562011-11-22T00:23:49Z http://irep.iium.edu.my/4356/ Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices Sadique, Muhammad Abdurrahman HG1501 Banking HG201 Money KBP173.25 Islamic law and other disciplines or subjects The objective of this study is to verify the Shari'ah position on the existence of capital in joint ventures based on musharakah and mudarabah, and its relevance and implications in the context of joint ventures formed between Islamic banks and clients in the course of financing on equity basis, especially in view of changes that have taken place in the nature and identity of money. The position of Islamic schools of law on the issue is ascertained from major works of Islamic law, and the implications of the Shari'ah requirement examined. The current practice of Islamic banks and the contemporary Shari'ah approaches to the issue are scrutinized; and the change in the nature and identity of money is analyzed to determine whether it is significant in this regard. According to the texts of Islamic law, a joint venture involving monetary capital could be set in motion on the basis of capital that is existent and present, with clear agreement regarding the share of each partner. While gradual release of capital is admissible, prior existence of capital is necessary. Due to credit supplementing real money in a substantial manner, the identity of money in the current fiscal environment appears to have undergone significant change, the nature and influence of which need to be reassessed through a separate study. This is crucial for determining the form in which the existence and presence of capital could be ensured. The emphasis placed in the Shari'ah on existence and presence of capital could indicate a measure for thwarting unwelcome monetary expansion, thus controlling inflation. This study only attempts to verify the Shari'ah position on existence of capital in the context of joint ventures financed by Islamic banks, based on their current practice. Broader research and academic effort is needed to assess the impact of the changed nature of money on related Shari'ah rulings. International Islamic University 2009 Article PeerReviewed application/pdf en http://irep.iium.edu.my/4356/1/IIUMJEMVol.17No.2%282009%29209-30.pdf Sadique, Muhammad Abdurrahman (2009) Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices. IIUM Journal of Economics and Management Sciences, 17 (2). pp. 209-230. ISSN 1394-7680 http://www.iium.edu.my/enmjournal/172art2.pdf
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking HG201 Money KBP173.25 Islamic law and other disciplines or subjects
spellingShingle	HG1501 Banking HG201 Money KBP173.25 Islamic law and other disciplines or subjects Sadique, Muhammad Abdurrahman Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices
description	The objective of this study is to verify the Shari'ah position on the existence of capital in joint ventures based on musharakah and mudarabah, and its relevance and implications in the context of joint ventures formed between Islamic banks and clients in the course of financing on equity basis, especially in view of changes that have taken place in the nature and identity of money. The position of Islamic schools of law on the issue is ascertained from major works of Islamic law, and the implications of the Shari'ah requirement examined. The current practice of Islamic banks and the contemporary Shari'ah approaches to the issue are scrutinized; and the change in the nature and identity of money is analyzed to determine whether it is significant in this regard. According to the texts of Islamic law, a joint venture involving monetary capital could be set in motion on the basis of capital that is existent and present, with clear agreement regarding the share of each partner. While gradual release of capital is admissible, prior existence of capital is necessary. Due to credit supplementing real money in a substantial manner, the identity of money in the current fiscal environment appears to have undergone significant change, the nature and influence of which need to be reassessed through a separate study. This is crucial for determining the form in which the existence and presence of capital could be ensured. The emphasis placed in the Shari'ah on existence and presence of capital could indicate a measure for thwarting unwelcome monetary expansion, thus controlling inflation. This study only attempts to verify the Shari'ah position on existence of capital in the context of joint ventures financed by Islamic banks, based on their current practice. Broader research and academic effort is needed to assess the impact of the changed nature of money on related Shari'ah rulings.
format	Article
author	Sadique, Muhammad Abdurrahman
author_facet	Sadique, Muhammad Abdurrahman
author_sort	Sadique, Muhammad Abdurrahman
title	Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices
title_short	Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices
title_full	Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices
title_fullStr	Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices
title_full_unstemmed	Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices
title_sort	existence of capital at the commencement of joint ventures: an analysis of the shari‘ah position in the context of modern money and banking practices
publisher	International Islamic University
publishDate	2009
url	http://irep.iium.edu.my/4356/ http://irep.iium.edu.my/4356/ http://irep.iium.edu.my/4356/1/IIUMJEMVol.17No.2%282009%29209-30.pdf
first_indexed	2023-09-18T20:12:32Z
last_indexed	2023-09-18T20:12:32Z
_version_	1777407573797896192

Existence of capital at the commencement of joint ventures: an analysis of the Shari‘ah position in the context of modern money and banking practices

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