Coronavirus (COVID-19) pandemic emerged as a threat to human kind. It engulfed the entire globe with its everlasting effect on almost all sectors of life. Financial sector turned out to be the most vulnerable to this devastating disease.
It not only threatened human existence but also shook the global economy. This was apparent from the stay-at-home orders from the local and national authorities across countries. Financial stability and economic strength continues to deteriorate due to this deadly disease.
People lost their homes; businesses failed; companies filed for bankruptcies; employees lost their jobs and hence, economies came to a halt. At the brink of this economic collapse, Islamic economic and financial principles can play a critical role in alleviating some of these challenges.
This is indeed the time for Islamic banks to demonstrate the spirit of Islamic principles underlying Islamic banking and finance. What sets apart Islamic banks from conventional (riba-based) banks is the spirit of brotherhood.
What has been done?
As a response to the COVID-19 pandemic, many Islamic banks in various jurisdictions allowed temporary relief to their clients. This includes payment deferment, finance restructuring, refinancing, reduced repayments, and zero fees.
Giving respite to a distressed debtor is explicitly mentioned in the Quran: {If the debtor is in (financial) difficulty, let there be postponement of the payment till ease (of his monetary condition). But if you remit/write-off the debt by way of charity, it would be better for you, if you understand.} (Al-Baqarah 2:280)
Helping the financially distressed is enshrined in the Shariah.
The post COVID 19: How Islamic Financial Instruments Can Help appeared first on About Islam.
source https://aboutislam.net/shariah/contemporary-issues/islamic-finance/covid-19-how-islamic-financial-instruments-can-help/
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