Interest-Free Treasury Bonds (IFTB):
Islamic Finance and Legal Clarifications
Bijan Bidabad
����������������������������������������������������������������������������� B.A.,
M.Sc., Ph.D., Post-Doc.
Professor
Economics and Chief Islamic
Banking Advisor
Bank Melli, Iran
E-mail:[email protected]
Purpose:
Although the treasury bill is the essential monetary instrument in central
banking operations,
its application in Islamic banking is not legitimate because it involves usury.
This implies that the system cannot apply monetary and fiscal policies. To
remove this obstacle �Interest-Free Treasury Bond� (IFTB) is introduced as a
substitute for conventional treasury bills.
Design: IFTB
is a valuable paper which is issued by government treasury through a barter
contract and is sold to central or commercial banks. The issuer is a debtor to
the holder, and has to pay back the nominal value at maturity to the holder; in
addition, the issuer is committed to lending a similar amount of money to the paper
holder for an equal period. The Shariah and legal background of IFTB is
explained through new contract types of �time-barter contract� and �time-loan
contract�.
Finding: IFTB
is a zero-coupon, asset-backed note with no interest and is designed upon �debt
equal to future loan�, or �loan equal to future debt� with �time-withdrawal
right�. The paper holder can supply and transact her bond in the secondary
market at a competitive price.
Practical Implication: It can be used as a substitute for
conventional treasury bills. All traditional and non-usury systems can
implement IFTB.
Keywords: Treasury Bills, Foreign
exchange, monetary policy, fiscal policy, usury-free banking, Islamic central
banking, financial instrument
JEL: E43, E44, E52, E58, E62, E63
Despite the
needs of various debt-based papers, the transaction of these papers is not
supported enough in traditional jurisprudence (Fiqh) and thereof, these
instruments are less often used in Islamic finance[1]. Generally, the diversity of religious judgments
about the transaction of valuable documents has prevented the development of
debt-based financial instruments[2]. The subject has attracted the attention of Islamic
economists, but there is no decisive consensus about debt-based papers yet.
Managing government fiscal policies in usury-free
banking conditions are facing a fundamental difficulty of bonds� usury nature.
Therefore, it is necessary to introduce non-usury treasury bills to manage
government budget deficit/surplus for successive years[3].�
Various bonds/notes/bills are basically debt
securities that people buy them and lend their funds to the issuer, and the
issuer is committed to paying the principal and the interest back at maturity.
Usually, bonds are guaranteed by the issuer, government, or
government-affiliated organizations, or they are asset-backed securities so
that the assets such as credit cards or payable loans hedge the papers.
Mortgage-Backed Securities, Collateralized Debt Obligation (CDO), and
Collateralized Mortgage Obligations (CMO) are some kinds of these securities.
These papers or valuable documents include government bonds, municipal
securities, corporate securities, asset or mortgage-backed securities,
government-affiliated organizations securities, foreign government securities,
and supranational securities. Securities issued by the government are called
treasury bills, treasury notes, treasury bonds, or perpetual bonds that are
similar, and their differences are just in their interest rates. All of them
might be sold before maturity by deducting the interest. Their maturities are
from a few days to 30 years, and some of them are even perpetual or take
several decades. Banker acceptance papers and commercial papers and deposit
certificates are also various kinds of bonds used for short term financing.
Bonds might be issued in fixed-rate, floating rate, reference-rate (usually
LIBOR or EURIBOR) or zero�coupon. Interest Only (IO) and Principal Only (PO)
might also be transacted in separate. In inflation-Linked (indexed) bonds, the
nominal yield is adjusted by inflation rate (Treasury Inflation Protected
Security �TIPS�). Some notes are linked to stocks, financial or GNP indices
(Equity-Linked Notes). Bearer or anonym bonds are in opposition to registered
bonds in which only the owner can claim the debt. Some bonds do not even have a
written paper certificate (Book-Entry Bond). We can also mention Lottery Bonds,
War Bonds, Serial Bonds, Revenue Bonds, and Climate Bonds as other kinds of
bonds.
Callable Bonds allow the issuer to call the holders
and buy back the bonds before maturity. Accordingly, in the case of decreasing
interest rates, the issuer can prevent losses by buying back and obtain a
cheaper loan. Opposing this kind of bond is Puttable Bonds (Put Bond or Retractable
Bond) allow the holder to apply them to the issuer and sell them back before
maturity. Some bonds are both puttable and callable. The prices of these bonds
are calculated by deducting call option or put option price from the straight
bond price.
Subordinated Bonds have the lowest right in
liquidation when the issuer becomes bankrupt; at first, other bond�s tranches
(Senior Bonds) will be settled, and the remainder will be paid to Subordinated
Bonds. Therefore, they have higher risk rate in comparison with other bonds.
Bond prices are set in the secondary market in
comparison with other financial assets. If interest rate increases in the
banking sector, the price of bonds will decrease, and if the associated risk of
the other assets increase, the price of bonds will increase because bonds have
collaterals and guarantees and they usually have less default risk. Variation
of bank interest rates and rate of return and maturity of other assets and
bonds will change the supply and demand of bonds. Inflation expectation will
also decrease the real yields of bonds and their prices.
2. Government Fiscal Tune Policies
Fiscal policies are generally a collection of
policies applied to fulfill macro-economic targets or to prevent losses causing
from government fiscal performance. Government treasury in managing government
income and expenditure flows uses different instruments to adjust government
budget in such a way that the government not to be faced with deficit/surplus
and provide necessary maneuvers for expansionary/contractionary fiscal
policies. The essential instrument for fiscal policy is the treasury bill,
which cannot be applied in usury-free systems because it involves usury.
The central bank can also affect liquidity through
open market operations by buying or selling treasury bonds and changes the
volume of high powered money and liquidity via monetary expansion mechanism. In
conventional monetary systems, treasury bonds are based upon interest, and
therefore, they involve usury which is forbidden in Islamic banking and cannot
be applied.[4] The central bank can also oblige other banks to
keep a portion of their assets in the form of treasury notes at the central
bank to prevent monetary base expansion. The discount rate is also another
quantitative measure through which commercial banks can finance their liquidity
needs by discounting their treasury bills at the central bank. The central bank
can affect free reserves of the banking system by changing the discount rate.
Regarding the above discussions, it should be noted
that in the absence of treasury notes/bonds/bills, Islamic government fiscal
instruments and monetary instruments cannot assist the government or central
bank in applying fiscal and monetary policies. Therefore, in compliance with
usury prohibition conditions, we have to innovate a new financial instrument to
tune the economy.
3. Interest-Free Treasury Bonds (IFTB)
Islamic notes in some countries such as Malaysia are
based upon debt transaction. Generally, debt is money or real commitment, and
in other words, selling the debt to a third party is called �debt purchase�.
Jurists have not a consensus on the authenticity of this transaction; some
believe it is prohibited, some others (Shafeies) consider it acceptable,
and some others (Malekies) accept it by observing some considerations[5]. Even though zero coupon notes do not compromise
any interest before maturity, short selling them in primary and secondary
markets through superficial methods cannot be used in usury-free systems
because it involves usury. On the other hand, although Islamic zero-coupon
satisfies essential transaction elements is Shariah problematic because
it is applied using Shariah tricks. The usury analogy of mortgage notes
makes them inapplicable too. Therefore, a new efficient financial tool in
compliance with Shariah is defined here that can be used in both
conventional and interest-free systems.
Four kinds of Interest-free bonds were introduced by
Bidabad et al. (2011)[6] which are in addition to compliance with Islamic Shariah
(without any Shariah trick), are asset-backed. One of them is IFTB that
can be issued by government treasury. �Interest-Free Treasury Bonds� or simply
IFTB that is introduced in this paper, is a kind of transactable note and is
not linked to tangible assets but is an asset-backed zero coupon bond. These
notes are issued by government treasury and have substantial difference with
conventional treasury bills. The main difference of IFTB with treasury bills is
that in the latter the interest rate is not pre-set and funds are exchanged
just in the form of time-barter as �loan equal to future debt� or, �debt equal
to future loan� with �time withdrawal right�. IFTB can be transacted by central
and commercial banks, financial institutions. The price of IFTB is set at the
secondary market according to supply and demand, and therefore, its yield rate
will change proportional to the capital rate of return in the economy; and by
considering its characteristics, it has no usury content. These notes are not
in the realm of consumption loans, and therefore, do not carry the prohibition
of usury of consumption loans[7].
IFTBs are issued with defined nominal prices.
Central, commercial, specialized and development banks and money and credit
institutions and financial funds which have prudential and legal reserves at
the central bank, can purchase these bonds and will become rightful to obtain
interest-free loans equal to their purchase of these notes at maturity and pay
back the loan to the issuer at the end.
Accordingly, by buying $A bonds with a maturity of N
months, the buyer will have the right to obtain $A interest-free loan for a
period of N months from the issuer of the bonds. The buyer and seller will
agree on fixing combinations of $A and N months so that the buyer can choose
smaller, equal, or larger than one ratios from $A in proportion with N months.
That is, the amount of money multiplied by time will be equal to A�N. In other
words, for example, buyer instead of A Dollars can borrow A/2 Dollars for 2N
months at the Nth month, or $A/3 for 3N months at the Nth month.
Where, in all cases, the result will be equal to A�N. That is:
(A/2)�(2N)=(A/3)�(3N)=A�N or generally speaking, instead of $A, we will receive
$A/k for k�N months after the N months. The parameter k can be any agreed
figure accepted mutually by the parties or offered by the buyer.
Figure
1. Two-Phases of Interest-Free Bonds
Generally, these bonds have two time periods and two
maturity dates, as shown in figure 1. The first period is equal to N months
from the selling time to the first maturity, and the second time period is from
the first maturity date (N) until the payback date of funds (kN+N) or second
maturity date. The first maturity is when the seller of papers is obliged to
provide the loan equal to A dollars for N months, or A/k dollars for kN months
to the buyer. Therefore, the first maturity occurs at the end of N months. The
second maturity is at the end of the contract when the seller will receive back
his funds after kN+N months after selling time.
Since banks have prudential and legal reserves at
the central bank, they will not face loan defaults. In this regard, they can
transact these papers in the �Interest-Free Secondary Market�. The buyers and
sellers at this market generally may be commercial, specialized and development
banks and money and credit institutions and reputable funds that are supervised
by the central bank and have prudential and legal reserves at the central bank.
In addition, government and private sector can enter this market by considering
certain conditions.
Accordingly, by buying these notes with defined
maturity, the buyer will have the right to obtain an interest-free loan for the
same period from the seller at maturity. The buyer and seller will agree to
select a combination of the amount and maturity so that the buyer can select ratios
less/more or equal to one of the amounts in proportion to maturity time by
which the result of multiplications of the amount and time for both loans
become equal. In practice, these two loans have two different maturity times.
Actually, there are two periods and two maturities. The first period starts
from the selling time of bonds until the first maturity in which the seller
becomes a debtor and the buyer becomes creditor, and the second period starts
from the first maturity date and ends after the payback of the interest-free
loan. The receiver of the interest-free loan will become a debtor, and the one
who has provided the loan becomes a creditor in the second period.
Essentially, IFTB is a document which defines two
different rights pertaining between two transacting parties. The seller of the
notes commits to provide the buyer a loan equal with the amount he has bought,
and for the same period of time. The simple description of the subject is that
two persons decide to render equal funds to each other for equal periods as a
deposit. In this case, no extra privilege is considered for neither parties. On
the other hand, since the holder of the bonds obtains the right to receive an
interest-free loan at maturity, he can transfer his right to a third party.
These bonds are transferable over the internet.
Since banks have obligatory and prudential deposits
at the central bank, they will not be faced with defaults for the loans and
therefore, can transact these notes in the secondary IFTBs market. The buyers
and sellers of these bonds are central, commercial, specialized and development
banks and those money and financial institutions and funds that have obligatory
and prudential deposits at the central bank.
4. Shariah and Legal Permissions of
Interest-Free Bonds
Essentially, usury occurs in loans, and loans have
two different kinds of consumption and drawing loans. Drawing loans are known
as investment loans, which result in profit/loss, and the loan itself is not
for spending or consumption. Consumption loans are used for everyday life uses.
Shariah prohibition reasoning mostly concern consumption loans[8].
��Transaction
usury� is defined as transacting a measurable commodity/money with a surplus
amount of the same commodity/money. Because of the excessive amount paid to the
other party, this transaction involves usury and is prohibited by Shariah.
In �transaction usury�, transacting equal amount along a time period is not
considered, but transacting with an extra amount is at the focus of attention.
That is why Interest-Free Bonds in general and IFTBs, in particular, do not
enter into the domain of �usury transaction�; because its financial activity is
not based upon transaction of the extra amount and just equal amounts are
bartered along two time periods and creditor obtains no surplus.
In �loan usury�, a person gives a loan (money or
commodity) and receives it back with a surplus. In �loan usury�, the surplus
has not necessarily the same type or quality of the original commodity and
includes any kind of surplus. Interest-Free Bonds and IFTBs are not �loan
usury� as well.���
The spiritual reference of the verses 278-281 of
Surah of Baqarah: �Your capitals will be yours, you won�t suppress and will
not be suppressed� approves
the correctness of Interest-Free Bonds[9]. This is because according to �Your capitals will be yours�, the principal loan will be
returned to the lender, and in order to prevent doing any oppression, or being
oppressed �You won�t suppress and will not be suppressed�, he will
receive loan in an equal amount of what he had lend which is precisely in
compliance with the meaning of this verse.
Many of monetary and banking activities are regarded
as new subjects in Civil Law. Civil Law has not reckoned all transaction contracts and has
just mentioned some evidence such as pure transaction contract,
conditional transaction, forward deal, spot transaction, over the counter
transaction, future (Salaf) and pre-paid (Salam) purchase,
irrevocable transaction, optional transaction, valuable metals transaction,
unauthorized transaction and etc. Therefore, we will not be wrong if we
consider IFTB with its similarities to �transaction contract� in Civil Law,
while the possessory right is suspended during the time period of
contract.�
Promissory contracts seem to be
a solution for the legal framework of IFTB. New �counter-loaned contract� in
which two parties decide to deposit a specific asset with the other party for
the same-length period, and also �counter-trust contract� can be defined in
this regard. But revocability of promissory contracts creates difficulty for
application of �counter-loaned contract� and �counter-trust contract� and
�donation against loan contract� with zero donations in applying Interest-Free
Bonds[10]. In this connection, the
application of �time-barter contract� is not meaningless. Accordingly, we
define �time-barter contract� in which a party lends an asset to the other
party, in order to receive the same asset from him in future without
considering that one of them is assets and the other is its price. If we
consider the loan contract without surplus �time-loan contract� might also be
defined. We may set �time-loan contract� according to which each party loans
the possession of his own specific asset to the other and the other party will
loan back the similar asset with similar quality and amount to him at maturity
date of the contract, and if he cannot render the same asset, he should pay its
spot price at the time of contracting. In all of these frames, one deposits
some asset with the other person, and he will pay back the same amount at the
maturity without any surpluses or privileges.
5. Economic Effects of IFTB
Issuance of IFTBs prepare
necessary conditions for financing the government, and the government can
adjust his budget policies by transacting these notes. If the central bank buys
these papers, in the first period increases the supply of high powered money in
the economy and creates a commitment for the government to deposit the same
amount with the central bank at the latter period. After the second maturity,
receiving back the deposited funds by the central bank, the issued bonds will
get out of circulation. Since these activities affect high powered money, it
will have an expansionary effect in the first period and a contractionary
effect in the second period. On the other hand, in the first period, it will
have an expansionary effect on the government budget and contractionary fiscal
effect during the second period, because of the increase of government fiscal
resources, These effects are shown in figure 2 through the IS and LM curves. At
first, the equilibrium is at point Eı and moves to point E2 after the issuance of IFTB and then at the
beginning of the second period moves back to point Eı again. Therefore, in the first period, the interest rate (r)
will decrease, and production (y) will increase, but in the second period, the
effects are reversed.
Figure 2
Considering the phases of recovery, prosperity,
recession and crisis conditions in business cycles[11] and the duration of positing economy in each phase,
the central bank can define A, N, or k parameters of IFTB in such a way to
dampen fluctuations of the business cycle. This policy is similar to the
monetary fine-tuning policy in conventional central banking.
Since these bonds can be transacted in secondary
Interest-Free Bonds market, they can have adjusting effects through the
relation between the IFTBs prices and interest rate. Whenever interest rate is
high, the transacting price of IFTBs will decrease in the first period and will
increase banks' incentives to deposit their funds with the government by buying
IFTBs to obtain resources in the second period. Thereof, during economic
prosperity phase of the cycle, when the interest rate is high, transacted IFTBs
restricts banks� free reserves and prevents widening of cycle range. Inversely,
whenever the interest rate is low, the price of IFTBs increases during the
first period and decreases the incentive for banks to deposit their resources
at the treasury for receiving future funds in the second period. This leads to
expanding free reserves of banks during the economic crisis when the interest
rate is low and prevent the widening of the cycle and exacerbation of the
crisis. On the other hand, by adjusting the buy and sale of IFTBs, the central
bank can affect liquidity by changing the supply of high powered money and
thereof, interest rate. Accordingly, IFTBs can substitute the prevailing
treasury bills in conventional banking.
When expected inflation and interest rate are
different in the first and second time periods, the economic effects will be
different. If the real expected natural interest rate for the second period is
more or less than the first period, its impact on supply and demand of IFTBs
will be different. The more is the expected natural rate of interest for the
second period, the more will be the price of IFTBs during the first period and
on the contrary, the less the natural expected rate of interest in the second
period, the less will be the price of IFTBs during the first period. This
phenomenon is significant for the central bank to adjust monetary policies to
stabilize economic activities and on the other words; IFTBs cause the
expectation to play a necessary role in controlling banks� credit behavior.
That is to say, if banks expect an increase (or decrease) of the natural
interest rate for the second period, then they will take increasing (or
decreasing) IFTBs supply policy. Regarding the changes of natural interest rate
during recovery, prosperity, recession, and crisis, from an economic point of
view, this mechanism can be a factor in shortening business cycle range.
In continuous inflationary conditions, the effects
of IFTBs do not change much. If expected inflation rates are similar in both
periods, inflation will not affect the transaction of IFTBs; but if expected
inflation rates are different in the two periods, we should expect different
prices for IFTBs in the secondary market. Accordingly, by assuming a fixed
interest rate, we may have the following cases for IFTBs prices, the average
expected inflation rate in the first period is less than in the second period;
the price of IFTBs in the first period will be higher than in the second
period, and if the average expected inflation rate in the first period is
higher than of the second period, the condition is reversed, and the price of
IFTBs papers will be lower in the first period.
Deposit and credit interest rates have also
significant effects on IFTBs prices. These effects can be considered for the
first and second time periods of IFTBs regarding periods' length and position
of the economy at different phases of business cycles to apply suitable
monetary and fiscal policies to adjust the economy.
Issuing IFTBs (in domestic money) affects foreign
exchange rate through monetary effects. Money supply change in relation to
foreign currency supply affects the economy through monetary channels and
interest rates parity[12].
Figure 3
When commercial banks buy IFTBs, in addition, to
increase the volume of IFTBs in the market in the first period, lead to
increase government fiscal resources in the same period, but the quantity of
liquidity is not affected. In the second period, the same amount of banks� free
reserves, which had been reduced in the first period will increase and will
have a fiscal contractionary effect on the government budget. The volume of
liquidity in the economy will not change in either of periods. This effect is
shown by the movement of the IS curve in figure 3. Equilibrium of the economy
is at E1 at the beginning and after the issuance of IFTBs by
government and its purchase by banks, will move the equilibrium to point E2.
The IS curve will return to E1 at the beginning of the second
period. Therefore, it decreases interest rate (r) and increases production (y)
in the first period, but in the second period, the reaction will be reversed.
6. Foreign Exchange Interest-Free Treasury
Bonds
Foreign exchanges nominated bonds are used very
much. Development of internet communication network in international bonds
markets and the possibility of foreign exchange and interest rate swaps have
created new opportunities to hedge future exchange rate changes. Foreign
exchange bonds are exposed to exchange rate risk and sovereign risk as a result
of laws and regulations changes in different countries. Foreign exchange
nominated bonds can have coupons in other currencies. Some of these notes that
are guaranteed by international organizations and unions[13] can be transacted at global markets. The interest
rate of foreign exchange nominated bonds is usually LIBOR plus a margin which
covers the changes of national currency and sovereignty risk of the country
that has committed the payback of the principal of the bond.
Similar to Domestic Money IFTBs, foreign exchange
nominated IFTBs can also be issued. The issuer of these notes is also the
government, and their buyers are similar to the buyers of Domestic Money IFTBs.
The only difference is that the nominal value of exchange bonds can be in one
currency and in two different currencies for the first and second periods. In
neither cases and especially in the second case with two different currencies
for the two periods, the transaction is not facing usury doubt.
The monetary effect of issuing Foreign Exchange IFTB
is similar to issuing IFTBs in domestic money and in addition, it has a
stabilizing impact on supply and demand of foreign exchange. The central bank
can use this issue to manage the exchange rate and by changing the supply of
various foreign exchanges in the short term. This instrument has different
effects when the foreign exchanges are similar or changed in the two time
periods of IFTB. If the exchange rates are the same in both periods, it will
hedge the buyer for future fluctuation of the exchange rate in the second
period, and if different exchanges are used in the two periods, the hedging
effect will be on the second-period exchange. Except for the central bank,
other banks can obtain this hedging by buying these notes.
7. Secondary Market for Transaction of
Interest-Free Treasury Bonds
IFTBs are issued over the Non-usury Scripless
Security Settlement System (NSSSS) with certain nominal prices as a bid for
auction with no base price. The issuer (government) puts a deadline for
accepting bids. Then, notes are sold to the highest bidder after the deadline.
Since the issuer has not defined any base price below the nominal price,
competitive prices are formed through the buyer's and sellers' perceptions of
the present and future interest rate and inflation rate expectations. All
conditions and principles of the Shariah transaction are fulfilled, and
there is no doubt of usury. The bought IFTBs can be transacted again in the
secondary market website (NSSSS). The designed mechanism for the transaction of
IFTBs increases market efficiency and convergence of their yields rates to real
sector rate of return[14].������
8. Summary and Conclusion�
Islamic financial instruments should have two main
characteristics of being usury-free, and efficient in applying monetary and
fiscal policies and liquidity and budget management of government and banks and
non-banking money and financial institutions. One of the effective instruments
is treasury notes which capable the government and central bank to apply
monetary and fiscal policies. But because of the involvement of interest rate
in conventional treasury bills, they have usury content and are not legitimate
from Shariah point of view in Islamic banking, and practically the
application of this instrument by monetary authorities and government is
forbidden by Islamic law.
This paper introduced a substitute for treasury
bills, which, in addition to being interest-free, can be used in monetary and
fiscal policies efficiently. IFTBs can be issued and by the government for
fiscal policies purposes, and central bank can buy these bonds to perform her
monetary policies. Commercial banks can buy or sell these bonds to adjust their
financial flows as well.
The secondary market of these notes is over the web
and in the NSSSS system, without any base price. No lower price than its
nominal price is considered by the issuer (government) and the competitive
prices offered by buyers on the basis of interaction of expected interest rate
and inflation, will form the price.
All governments and central banks of both groups of
countries that are and are not willing to prohibit usury can apply IFTBs
without any problem.
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[1] -
Muhammad Arham, Islamic perspectives on marketing, Journal of Islamic Marketing Volume:
1 Issue: 2, 2010
[2] - Azizi bin Che Seman,
"Bay' al-Dayn, Bay' al-'lnah and IPDS in the Malaysian Islamic Capital
Market", http://myais.fsktm.um.edu.my/7491/1/Bay'_al-Dayn,_al-'Inah_and_IPDS_in_the_Malaysian_Islamic_Capital_Market.pdf
[3] Fouad H. Al-Salem, Islamic
financial product innovation, International Journal of Islamic and Middle Eastern
Finance and Management Volume: 2 Issue: 3, 2009.
[4] - Komijani, Akbar.; Bidabad, Bijan; Appropriate monetary policy for
economic stabilization in Iran. Research project no. 111. Ministry of Finance
and Economic Affairs, Deputy of Economic Affairs, Tehran, Iran, Phase I, 1992.
http://bidabad.com/doc/siyasathayepooli-vol1.pdf
[5] - Al-Sadiq 'Abd al-Rahman al-Gharyani, Al-Mu'amalat
Ahkam wa_Adillah, 2nd ed., 1992, pp. 190.
Muhammad Tawfiq Ramadan
al-Buti, Al-Buyu' al-Sha 'i'ah wa Athar Dawabit al-Mabi ala Shar'iyyatiha,
Beirut: Dar al-Fikr al-Mu'asir, 1998, pp.370-378.
[6] - Bidabad, Bijan, et. Al.; Interest-Free Bonds
and Central Banking Monetary Instruments. International Journal of Business and
Management Science. Vol. 3, no. 3, August 2011.
[7] - Bidabad, Bijan. Economic- Juristic Analysis of
Usury in Consumption and Investment Loans and Contemporary Jurisprudence
Shortages in Exploring Legislator Commandments. http://www.bidabad.com/doc/reba-en.pdf
[8] - God says in holy Quran
that: consumption loans are opposing charity and God will vanish usury and
increase charity; Surah: Baqarah, Verse 267.�
�يَمْحَقُ
اللّهُ
الْرِّبَا
وَيُرْبِي
الصَّدَقَات� .��
[9] - �يَا
أَيُّهَا
الَّذِينَ
آمَنُواْ
اتَّقُواْ
اللّهَ
وَذَرُواْ
مَا بَقِيَ
مِنَ
الرِّبَا إِن
كُنتُم
مُّؤْمِنِينَ.
فَإِن لَّمْ
تَفْعَلُواْ
فَأْذَنُواْ
بِحَرْبٍ
مِّنَ اللّهِ
وَرَسُولِهِ
وَإِن تُبْتُمْ
فَلَكُمْ
رُؤُوسُ
أَمْوَالِكُمْ
لاَ تَظْلِمُونَ
وَلاَ
تُظْلَمُونَ.
وَإِن كَانَ
ذُو عُسْرَةٍ
فَنَظِرَةٌ
إِلَى
مَيْسَرَةٍ
وَأَن تَصَدَّقُواْ
خَيْرٌ
لَّكُمْ إِن
كُنتُمْ
تَعْلَمُونَ.
وَاتَّقُواْ
يَوْمًا
تُرْجَعُونَ فِيهِ
إِلَى اللّهِ
ثُمَّ
تُوَفَّى
كُلُّ نَفْسٍ
مَّا
كَسَبَتْ
وَهُمْ لاَ
يُظْلَمُونَ.�
Those
who are believers should care about God; leave what is left through usury. But
if you don�t, you should know that you are fighting against God and his
messengers; and if you repent, your capitals will be yours�. You won�t suppress
and will not be suppressed. If your debtors are poor, give them time until they
obtain money; and if you bestow, it will be much better for you if you
understand. Beware of the day you return to God, and then whatever obtained,
will be returned to everybody; and they will not be suppressed.���
[10] - Bidabad, Bijan, Legal
analysis of Interest-Free Bonds http://www.bidabad.com/doc/legal-analysis-of-non-usury-bonds.pdf
[11] -Bidabad, Bijan. Stabilizing
Business Cycles by PLS Banking and Ethic Economics �
http://bidabad.com/doc/pls-business-cycles-en.pdf
[12] �- Bidabad, Bijan (2014) General
Monetary Equilibrium.
[13] - Global bond, Eurobond, Yankee bond, Bulldog bond, Kangaroo bond, Maple
bond, Bond Samurai.
[14] - Bidabad, Bijan; M.
Allahyarifard. IT based usury free financial innovations
http://www.bidabad.com/doc/non-usury-finance-it-en.pdf