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Debate on Tawarruq: Historical Discourse and Current Rulings

Ahmed, H.; Mohammad, A.N.

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A.N. Mohammad


One of the controversial products used by the Islamic financial sector is organized tawarruq. As the substance of this product resembles that of an interest-based loan, there is a debate on its permissibility from a Shari’ah perspective. While discussions on tawarruq have arisen due to the emergence of the practice in Islamic finance, there have been deliberations on this transaction in the past starting immediately after the emergence of Islam. The aim of the article is to provide an overview of the historical discourse on tawarruq and examine the rulings on it by two contemporary jurisprudential bodies to assess the practice of the transaction in Islamic finance. The discussions show that the current rulings concur with the majority view of the past scholars. The practice of organized tawarruq by the Islamic financial industry, however, appears to be inconsistent with both the contemporary and historical rulings.


Ahmed, H., & Mohammad, A. (2014). Debate on Tawarruq: Historical Discourse and Current Rulings. Arab Law Quarterly, 28(3), 278-294.

Journal Article Type Article
Online Publication Date Sep 23, 2014
Publication Date Jul 1, 2014
Deposit Date Nov 24, 2014
Publicly Available Date Dec 2, 2014
Journal Arab Law Quarterly
Print ISSN 0268-0556
Electronic ISSN 1573-0255
Publisher Brill Academic Publishers
Peer Reviewed Peer Reviewed
Volume 28
Issue 3
Pages 278-294
Keywords Islamic law, Islamic finance, Tawarruq, Inah, Riba.
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