Issuing a Secondary Currency by Islamic Banks and its Impact on the Execution of Interest-free Loans: A Case Study of Buy and Sell Model
إصدار نقود ثانوية للمصارف الإسلامية وأثره على تنفيذ القروض الحسنة: البيع والشراء أنموذجًا
Keywords:Secondary Currency, Islamic Banking, Interest-free Loans, Usury, Buy and Sell
The problem of usury in loans will not be solved as long as a single currency is used in the payment and repayment of the loan. Therefore, this research aims to propose a new system that complies with Sharīʽah standards in dealing with financial contracts for loans. The research uses the deductive and historical approaches to discuss the problem. The research concluded that it is necessary to issue a secondary currency by the Islamic banks as an alternative legitimate solution to treat usurious transactions, with the aim of dealing with it in the loan contract in particular and some aspects of other financial contracts in general, as long as this currency can be exchanged among people, used for valuation of things, and storage of value. This research proposed a new loan repayment mechanism based on the buy and sell model, in which the bank can lend the debtor in a special currency, which the debtor can then sell and be paid in the local official currency. The debtor can then spend the loan as per his/her interest. When the loan is due for repayment, the debtor can buy the special currency from the bank using the official currency and repay the loan with the same special currency. The difference or increase (i.e. profit) that enters into the bank - when the customer purchases the secondary currency with the government currency - will be a part of the capital that comes to the bank through sale or purchase.
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