By Uzair Ashraf Usmani
Abstract:
With the growing use of financial services in international trade, the importance of bill discounting is not beyond comprehension. It is undoubtedly one of the most important tools of trade financing. Now, it has become very easy for importers and exporters to sale any product to a complete stranger anywhere in the world and get the bill against it discounted before its maturity date. That is why; this tool is in the practice of all conventional banks. But, regarding Shariah rulings, the prevailing practice in conventional banks is not Shariah compliant as this transaction consists of debt sale and interest. But, due to its vital need, Islamic Shariah jurists have stepped forward with its different alternatives based on Murabaha, Wakalah, Musharkah and Bai Salam in currency. In this article, we have covered the rationale behind the Shariah rulings of prevailing bill discounting in conventional banks and addressed the Bai Salam as an alternative in currencies and its executive model in Islamic banks. Furthermore, we have discussed the different opinions of modern scholars regarding these issues.
Comments are closed.