Analysing Ruling of al-Ṣarf in Contemporary Issues

Abstract

Al-ṣarf is crucial in Islamic finance, regulating currency exchanges to prevent unfair practices like ribā (usury) and gharar (uncertainty). Initially focused on gold and silver transactions in classical jurisprudence, its scope has expanded to address modern financial issues, including fiat currencies, electronic payments, and digital products. This study examines how these mechanisms align with or diverge from traditional Islamic principles; this study explores the application of al-Ṣarf to modern financial tools such as vouchers, points and cashback. The research uses a qualitative approach to analyse these financial instruments and draws on classical and contemporary Islamic jurisprudence. The findings indicate that cashback generally adheres to al-Ṣarf principles, while vouchers and points require distinct Sharīʿah interpretations due to their unique structures. The study emphasises distinguishing between single and combined ribawī items in financial transactions. Through this analysis, the paper highlights the ongoing relevance of al-Ṣarf in navigating modern financial practices, contributing to the broader discussion on ensuring that contemporary financial instruments comply with Sharīʿah rules and principles.