Articles

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Qard hasan—commonly defined as an interest-free loan—is a benevolent economic behaviour, an outlet for the placement of savings, an instrument of finance and an institution for bona fide lending. Having such versatile attributes, it is distinguishable from other charitable financial activities such as

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Based on the categorical prohibition of ribā in the Qurān, presumably further reinforced by adīth, qar (loan) is considered ribawī, i.e., only gratuitous monetary loans are considered permissible. Deposits (particularly, demand deposits) in Islamic banks are often structured as qar asan, or wadīah/amānah (trust). Based on the Qurān, adīth and earliest Islamic discourse, this article examines whether qar is ribawī and whether the application of the concept of qar asan or wadīah/amānah is coherent in the context of Islamic finance. © 2011 Koninklijke Brill NV, Leiden.