Our Law Faculty member Asst.Prof.Dr. Cemal KALKAN addressed the issue of ‘Fiqh and Interest-Free Banking’ in his speech at the Paris Religious Services Attaché on March 5, 2022.
In his speech, KALKAN emphasized the relationship between law, economy and politics and the activities in all these fields with religion. Pointing out that the activities that will provide economic growth outlined in the Qur’an and Sunnah are defined and systematized in fiqh, KALKAN pointed out that the absolute prohibition of interest is accepted within the fiqh system. At this point, he talked about participation banks that realize interest-free banking practices today. He stated that today’s interest-free banking practices include the modern mudarabah practice. Drawing attention to the fact that money has no value on its own in Islamic finance, money is used as a means of exchange, KALKAN stated that in this banking system, which consists of three interconnected relationships, interest-free banks are institutions that organize the relationship between capital owners and manager mudaribs. He stated that the parties establish a partnership in which they share the profit and loss of the investment subject to financing. He stated that the funds collected for participation accounts based on the mudarabah contract are generally used by the murābaha method to the customers who request funds, and the income obtained from the funds used is recorded in the account.
He stated that in this system, which is carried out in accordance with the interest-free banking standards published by the Accounting and Supervision Agency for Islamic Financial Institutions, people who have access to participation banking can operate in accordance with the fiqh; however, there are parts of the system that need improvement and listed his suggestions.