Document Type : Science - Research (Islamic Banking)

Authors

• Sadegh Elham ¹
• Mohammad Mahdi Shariatinjad ²
• Muhammad Rasul Fakhreh ²

¹ Assistant Professor, Faculty of Theology, Islamic Studies and Guidance, Imam Sadiq University, Tehran, Iran

² PhD Student, Fiqh and Fundamentals of Islamic Law, Faculty of Theology, Islamic Education and Guidance, Imam Sadiq University, Tehran, Iran

Abstract

Money creation in the banking system is an important phenomenon, the quality and manner of which creates many effects in the economic system. Therefore, the analysis of many banking issues such as mudarabah depends on the nature and dimensions of money creation. Economists in their analysis of the process of money creation have defined it with two approaches: multiplier and endogenous money creation (money creation from nothing). Proponents of the multiplier approach define money creation as an operation dependent on deposits, and on the other hand, another group does not accept the dependence on deposits in money creation and believe that banks can create credit only by granting loans. This article, which is compiled with a descriptive and analytical method, is trying, since debt or commodity nature of money creation has serious effects on usury-free banking, it first adopts the basis of debt or commodity nature of money creation and then examines Permissibility or non-permissibility of debt mudarabah, apply these contents and draw a conclusion. Finally, after the investigations, this research confirms the validity of such a transaction with the money created by the banking system, emphasizing the famous ruling on the inadmissibility of mudarabah on debt.

Keywords

• Creating money
• mudarabah
• Islamic banking
• money
• wealth

Main Subjects

• Science - Research (Islamic Banking)