دراسات اقتصادية
Volume 7, Numéro 1, Pages 244-267

The Nature And Role Of Money: An Islamic Perspective

Authors : Rahman Naeem .

Abstract

The role of money in business, trade and commerce is quite significant and crucial. It is the backbone of all economic, financial and business activities and its role is indispensable in the modern banking and financial sector. The functions of money are well-defined and have been in practice for ages, and for the performance of these functions the money virtually was invented. Its functions as medium of exchange and store of value are primary ones. The role of money has to be in alignment with its primary and secondary functions. The article suggests that the injudicious role of money created turmoil and several problems in the economic activities. The research paper attempts to explore the role of money from Islamic perspective in the radiance of teachings and guidance from Quran, Sunnah and the views of great Muslim jurisprudents. The qualitative research approach applied to the discussion and based on the literature review and available data it is recommended that there is a dire need to review the role of money. The banking and financial sector also needs to reform and the financial intermediation needs to be reviewed as the role of money as a tradable commodity caused distortions. It is recommended that the banking business needs to be on profit and loss sharing rather than trading of money as commodity.

Keywords

Money ; Role of Money ; Banking ; Economic System ; Islamic Economics