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Viability cf implementing direct interest-free credit clearance system in Muslim countries

This study aims to examine the possibilities of implementing direct interest-free credit clearance (DIFCC) system,which is one of the viable alternatives to solve the problems of contemporary currency system. The DIFCC, which is based ona netting system,has been implemented successfully by several c...

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Main Authors: Jaafar, Syammon, Abdullah, Adam, Hassan, Rusni, Mydin Meera, Ahamed Kameel
Format: Article
Language:English
Published: IIUM Institute of Islamic Banking and Finance (IIiBF). 2016
Subjects:
HG Finance
HG201 Money
HG3691 Credit
Online Access:http://irep.iium.edu.my/55734/1/v12_n3_article8.pdf
http://irep.iium.edu.my/55734/
http://ibtra.com/journal_index.php
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spelling my.iium.irep.557342017-03-07T02:05:28Z http://irep.iium.edu.my/55734/ Viability cf implementing direct interest-free credit clearance system in Muslim countries Jaafar, Syammon Abdullah, Adam Hassan, Rusni Mydin Meera, Ahamed Kameel HG Finance HG201 Money HG3691 Credit This study aims to examine the possibilities of implementing direct interest-free credit clearance (DIFCC) system,which is one of the viable alternatives to solve the problems of contemporary currency system. The DIFCC, which is based ona netting system,has been implemented successfully by several countries in the conventional setting, not to replace the current fiat money system, but rather as a parallel complementary currency. In this system, the distribution of credit as money will not be monopolized by the commercial banks, rather the distribution ison a mutual basis as long as there are products or services that can be offered to others among the members. As such, the system is fairer compared to the fiat money system and is free from the prohibited elements in Islamic finance such as riba, gharar and maysir as it requires exchange of real goods and services. In the context of the Muslim countries, the negative socio-economic effects of using the fiat money will not allow the countries to attain the objectives of the Shari’ah(maqasid al-Shari’ah). This study discuss the viability of implementing the DIFCC model which essentially applies the concepts of muqasah (nett-off) and hiwalah (transfer), apart from assessing the Shari’ah-compliancy of the model to be implemented as an innovative product in Islamic finance. IIUM Institute of Islamic Banking and Finance (IIiBF). 2016-09 Article REM application/pdf en http://irep.iium.edu.my/55734/1/v12_n3_article8.pdf Jaafar, Syammon and Abdullah, Adam and Hassan, Rusni and Mydin Meera, Ahamed Kameel (2016) Viability cf implementing direct interest-free credit clearance system in Muslim countries. Journal of Islamic Economics, Banking and Finance, 12 (3). pp. 190-215. http://ibtra.com/journal_index.php
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HG Finance
HG201 Money
HG3691 Credit
spellingShingle HG Finance
HG201 Money
HG3691 Credit
Jaafar, Syammon
Abdullah, Adam
Hassan, Rusni
Mydin Meera, Ahamed Kameel
Viability cf implementing direct interest-free credit clearance system in Muslim countries
description This study aims to examine the possibilities of implementing direct interest-free credit clearance (DIFCC) system,which is one of the viable alternatives to solve the problems of contemporary currency system. The DIFCC, which is based ona netting system,has been implemented successfully by several countries in the conventional setting, not to replace the current fiat money system, but rather as a parallel complementary currency. In this system, the distribution of credit as money will not be monopolized by the commercial banks, rather the distribution ison a mutual basis as long as there are products or services that can be offered to others among the members. As such, the system is fairer compared to the fiat money system and is free from the prohibited elements in Islamic finance such as riba, gharar and maysir as it requires exchange of real goods and services. In the context of the Muslim countries, the negative socio-economic effects of using the fiat money will not allow the countries to attain the objectives of the Shari’ah(maqasid al-Shari’ah). This study discuss the viability of implementing the DIFCC model which essentially applies the concepts of muqasah (nett-off) and hiwalah (transfer), apart from assessing the Shari’ah-compliancy of the model to be implemented as an innovative product in Islamic finance.
format Article
author Jaafar, Syammon
Abdullah, Adam
Hassan, Rusni
Mydin Meera, Ahamed Kameel
author_facet Jaafar, Syammon
Abdullah, Adam
Hassan, Rusni
Mydin Meera, Ahamed Kameel
author_sort Jaafar, Syammon
title Viability cf implementing direct interest-free credit clearance system in Muslim countries
title_short Viability cf implementing direct interest-free credit clearance system in Muslim countries
title_full Viability cf implementing direct interest-free credit clearance system in Muslim countries
title_fullStr Viability cf implementing direct interest-free credit clearance system in Muslim countries
title_full_unstemmed Viability cf implementing direct interest-free credit clearance system in Muslim countries
title_sort viability cf implementing direct interest-free credit clearance system in muslim countries
publisher IIUM Institute of Islamic Banking and Finance (IIiBF).
publishDate 2016
url http://irep.iium.edu.my/55734/1/v12_n3_article8.pdf
http://irep.iium.edu.my/55734/
http://ibtra.com/journal_index.php
_version_ 1643614791508426752
score 13.211869

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