Ḥawālah and Its Contemporary Applications in Financial Transactions

Abstract

This study examines the concept of ḥawālah (debt transfer) and its contemporary applications in financial transactions, considering it one of the contracts legislated by Allah Almighty to facilitate the settlement of debts and the transfer of rights from one liability to another. The study aims to clarify the nature of ḥawālah and the basis of its legitimacy, while highlighting its principal legal rulings. It focuses on analyzing ḥawālah from a Sharīʿah perspective and examining its most prominent forms and contemporary applications. The study reached several findings, most notably that ḥawālah is a contract applicable in banks and financial institutions. It also demonstrated that the development of methods for conducting financial transfers has not affected its substance or its original legitimacy, but has instead led to the emergence of new forms and means for implementing its underlying function. The study further emphasizes the necessity of subjecting newly developed applications of ḥawālah to Sharīʿah rules and controls, while taking into account differences in their forms and details and benefiting from Islamic jurisprudential reasoning to achieve a balance between facilitating financial transactions and preserving the rulings and objectives of Sharīʿah.