Abstract

This paper investigates the views of Sunni and Shi‘a jurisprudents on adjusting the repayment amount of loans (qard, pl. qurud) and debts (dayn, pl. duyun) in accordance with a price index. Classical and contemporary Islamic jurists fall into two groups regarding this matter. The first group argues that loans and debts should be adjusted according to the customary value of a currency in accordance with the Qur’anic verse saying to give full measure when selling. However, the second group rejects the idea of adjusting the repayment amount of debts and loans with a price index; instead, they emphasize that Islamic law requires loans and debts to be paid in their exact, original amounts, and any excess in repayment would be seen as interest, which is strictly prohibited in Islamic law. After examining both sides of this debate, the authors conclude that the preferable shari‘ah view is that correlating loans and debts with a price index should not be allowed. However, debts and loans may be repaid according to the value of the currency in cases where payment of indemnity is necessitated.

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Additional Information

ISSN
2051-557X
Print ISSN
1748-9423
Pages
pp. 289-306
Launched on MUSE
2013-08-19
Open Access
No
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