Sharia Rulings of Bill Discounting and Its Alternatives

Abstract

With the growing economic industry, the importance of bill discounting is not obscured anymore. It is undoubtedly one of the most important tools of trade financing. Now it has become very easy for importers and exporters to sell any product to a complete stranger anywhere in the world and get the bill against it discounted before its maturity date. That is why this tool is in the practice of all conventional banks. But regarding to sharia rulings its prevailed practice in conventional banks is not sharia compliant as this transaction consists of debt sale and interest. But due to its vitally need, Islamic sharia jurists have stepped forward with its different alternatives based on Murabaha, Wakalah, Musharkah and Bai Salam in currency. In this article I have covered the causes behind the sharia rulings of prevailed bill discounting in conventional banks and addressed the Bai salam as an alternative in currencies and its executive model in Islamic banks. Furthermore, I have discussed the different opinions of modern scholars regarding these issues.