Revisiting Riba & Gharar in Light of a Contemporary Analysis of Their Shariah Objectives

Riba in its two types along with Gharar (uncertainty in contracts) are the major reasons for contracts invalidation in Islamic law. While Riba of debt (interest) is clear in terms of its rules and objectives, Riba of sale, on the other hand, has not received the due attention in terms of attempting to identify its Shariah objectives, and the same applies to gharar. Rationalizing the Shariah objectives behind the prohibition and rules of these two elements in light of the contemporary developments in financial markets and transactions should help guide the contemporary ijtihad in financial transactions and function as a point of reference to revisit the relevant fiqh opinions in light of these insights. The paper shows that contemporary Ijtihad may have burdened and crippled Islamic financial law with unnecessary prohibitions, while on the other hand has stripped certain prohibitions of their objectives. To achieve the above, the paper employs qualitative research methodology that adopts textual and fiqh comparative analysis approach. The study finds that some of the objectives behind the prohibition of riba (interest) and gharar (uncertainty) may not have been fully observed in the contemporary Ijtihad and thus, further studies in this field are necessary to help streamline fatwas and Ijtihad accordingly.