Concept of Ḡarar in the Muslim Legal, Theological and Economic Thought

Abstract

Ḡarar is one of the least known and most misunderstood concepts in
Islamic Banking and Finance. Both Islamic scholars of the classical period
and contemporary researchers attempted to coin its commonly accepted definition.
By far no one has managed to succeed, though. The most prevalent
translation of ḡarar is ‘risk’. However, I am proving in the article that the
translation is inadequate and misleading. Relying on two major sources of
law in Islam: Koran and Sunnah of Muhammad as well as classical and contemporary
works by Muslim and secular scholars, I discuss the most common
definitions of the term and the social and historical context in which the ḡarar
ban came into existence. I also attempt to create a broader definition that
could help understand the essence of ḡarar and the reasons why it is banned.