Abstract:
There is no doubt that the Islam prohibited unjustified increment in borrowing or lending money above
the amount of loan. But the daily depreciation of Sri Lankan rupees raised the question how it can be
compensated in non- interest Islamic financial policy? Is the borrower obligated to return the same
quantity at the expiry of the loan or value of amount of loan at the date of loan?
For example if the lender and borrower are concerned about the inflation, then the loan can be
denominated in terms of gold or U.S. dollars. But if the loan is denominated in terms of Sri Lankan
Rupees, on which basis it should be repaid?
In this paper I tried to answer to this difficult and important question in Islamic monetary Perspective.