SECURE TRANSACTIONS IN ISLAMIC AND CONVENTIONAL LEGAL FRAMEWORKS: A COMPARATIVE ANALYSIS

Abstract

The concept of security in financial transactions is not new and exists across various financial systems to safeguard financial obligations. Security provides trust and confidence to creditors, thereby facilitating the fulfillment of contracts. Islamic law addresses security in financial transactions through the concept of rahn, which encompasses conventional ideas of pledge, mortgage, lien, and other forms of security. Rahn serves as a mechanism to secure debts or advances, minimizing the risk of default and encouraging the wealthy to provide interest-free loans, which contributes to social welfare. In the conventional legal framework, the concept of secure transactions aims to protect the rights of both creditors and debtors. However, there are notable differences between the conventional and Islamic systems in their approach and underlying principles.

 The research addresses key questions, such as: What are the general principles and concepts of secure transactions within Islamic and conventional legal frameworks; how do these systems operate, and in what ways are they similar or different. Descriptive and comparative research methodologies, along with Islamic research methods, have been employed to explore and explain the issues effectively. This research examines the overall concept of secure transactions under both Islamic and conventional legal frameworks. It further delves into the rules and principles of Rahn as outlined in Islamic jurisprudence, while also exploring the foundations of mortgages and pledges in conventional law.