Towards a just monetary system
Subtitle: a discussion of money, banking, and monetary policy in the light of Islamic teachings
By: M. Umer Chapra.
Series: Islamic economics series ;; 8
Publisher: Islamic Foundation
Published: 1985
Place of publication: Leicester, UK
Language: eng
Number of pages: 292
Subjects: Banks and banking -- Islamic countries.; Monetary policy -- Islamic countries.; Banks and banking -- Religious aspects -- Islam.; Economics -- Religious aspects -- Islam.; Islam -- Economic aspects.
Description: CONTENTS
Foreword - Khurshid Ahmad
9
Preface
15
Introduction: The Perspective.
19
Roots of the Crisis
19
Role of the Banking System
22
The Dilemma
24
The Human Dimension
25
The Islamic Blueprint.
26
Scope of the Book.
30
Chapter 1: The Goals and Strategy
33
THE GOALS
Economic Well-being with Full Employment and
'Optimum' Rate of Growth
34
Socio-Economic Justice and Equitable Distribution
of Income and Wealth
36
Stability in the Value of Money
37
Indexation.
39
Unemployment and Inflaiton Trade-off.
42
Mobilisation of Savings.
44
Rendering Other Services
44
THE STRATEGY
45
Chapter 2: The Nature of Ribā
55
The Prohibition of Ribā
56
The Meaning of Ribā
56
Ribā al-Nasī’ ah
57
Ribā al-Fadl
58
Consumption and Production Loans.
62
Concluding Remarks
64
5
Chapter 3: The Alternative
67
Equity Financing.
68
Channels of Equity.
69
Sole Proprietorship
69
Partnership.
71
A Combination of Sole Proprietorship and Partnership.
72
Joint Stock Companies.
73
Cooperation
74
Historical Experience.
75
Chapter 4: Some Fundamental Reforms
81
Saving and Investing
82
Moderation in Spending
82
Elimination of Hoardings.
85
Efficient Use of Savings.
86
Government Spending.
86
Increased Equity Financing
87
Reducing the Power of Banks
90
A Sane Stock Market
95
Concluding Remarks.
100
Chapter 5: Objections and Rationale
107
Allocation of Resources
107
Savings and Capital Formation
111
Stability
117
Economic Growth.
122
Losses Incurred on Deposits
125
Short-Term Loans
129
Instalment Credit
131
Government Borrowing Needs
133
Chapter 6: Institutional Setting
147
The Central Bank.
147
Functions
148
Crisis Handling
149
Supervision
151
Allocation of Credit
152
Pioneering Role
152
Commercial Banks
154
The Essential Differences
154
6
Some Issues.
157
Resource Mobilisation
159
Resource Use.
160
Forms of Investment
164
Mudārabah, Shirkah and Corporation.
165
Other Forms of Investment
166
Lease Finance.
167
Investment Auctioning.
169
Bay‘ al-mu’ajjal and Bay‘ al- murābahah
170
The Remaining Alternatives
172
Social Welfare Dimension
174
Non-Bank Financial Institutions (NBFIs)
175
Specialised Credit Institutions
178
Deposit Insurance Corporation (DIC)
179
Investment Audit Corporation (lAC)
181
Chapter 7: Monetary Policy.
187
The Strategy.
187
Sources of Monetary Expansion.
190
Fiscal Deficits
190
Commercial Bank Credit Creation
193
Balance of Payments Surplus or Deficit
193
Instruments of Monetary Policy
194
Target Growth in M and Mo
194
Public Share of Demand Deposits
196
Statutory Reserve Requirement
197
Credit Ceilings
199
Value-Oriented Allocation of Credit.
199
Other Techniques
201
Conclusion.
205
Some Questions
206
Chapter 8: Evaluation
215
The Islamic Approach
215
Capital Formation, Growth and Stability.
216
Monetary Health
219
Discipline in Government Spending
220
Justice with a Bountiful Bonus
221
Chapter 9: The Transition
223
7
The Three Characteristics
223
The Revival of Values.
225
Reforms Related to the Banking System.
227
The Different Steps
228
Major Obstacle.
231
Appendix I: Ribā in the Qur’ān, Hadīth and Fiqh
235
1.1 Ribā in the Qur’ān.
235
1.2.Ribā in hadīth
236
General.
236
Ribā al-nasī’ah
237
Ribā al-fadl
238
1.3 Ribā in Fiqh
240
Appendix ll: Mudārabah, Shirkah and the Corporation
247
Mudārabah
247
Shirkah
251
The Corporation.
255
Glossary of Arabic Terms Used in the Book.
261
Selected Bibliography
267
Index
283
Notes: Bibliography: p. 267-282.
Includes index.