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A Critical Appraisal On The Challenges Of Realizing Maqasid Al-Shariaah In Islamic Banking And Finance

Author

Listed:
  • Asyraf Wajdi Dusuki

    (International Shariah Research Academy for Islamic Finance (ISRA), 2nd Floor Annexe Block, Menara Tun Razak, Jalan Raja Laut, 50350 Kuala Lumpur, Malaysia)

  • Abdulazeem Abozaid

    (Damascus University, Damascus, Syria)

Abstract

Islam harbours an economic vision that holds the key to a social order capable of providing social justice along with economic prosperity. This vision is deeply inscribed in the objectives of shariah, also known as maqasid al-shariah. Consequently the doctrine of Islamic economics entered debates over the social-welfare role of Islam. It has somehow pursued the goal of restructuring economies according to perceived Islamic teachings and principles. Its most visible practical achievement is the establishment of Islamic banks meant to avoid interest and promote Islamic norms of economic behaviour and ultimately realizing the noble objectives of shariah. This paper examines the challenges of the proper realization of maqasid al-shariah in Islamic banking and finance. These challenges cover various issues: the proper understanding of maqasid al-shariah in Islamic economics; the methods of implementing maqasid al-shariah in Islamic banking and finance; the potential conflicts between macro maqasid and micro maqasid; and the possible abuse of maqasid al-shariah to justify certain financial contracts which in fact contradict the shariah texts. The paper analyses these challenges and provides examples from the current practices of Islamic banks and financial institutions.

Suggested Citation

  • Asyraf Wajdi Dusuki & Abdulazeem Abozaid, 2007. "A Critical Appraisal On The Challenges Of Realizing Maqasid Al-Shariaah In Islamic Banking And Finance," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 15(2), pages 999-1000, December.
  • Handle: RePEc:ije:journl:v:15:y:2007:i:2:p:999-1000
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    Citations

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    Cited by:

    1. Mohd Saad, Noriza & Haniff, Mohd Nizal & Ali, Norli, 2020. "Corporate governance mechanisms with conventional bonds and Sukuk’ yield spreads," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    2. Najihah Muhammad & Sharifah Faigah Syed Alwi & Nabihah Muhammad, 2020. "Credit Management in Full-Fledged Islamic Bank and Islamic Banking Window: Towards Achieving Maqasid Al-Shariah," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 92-99, June.
    3. Shafiullah Jan & M. Fahad Siddiqi & Karim Ullah, 2019. "Maqasid al Shariah and Stakeholders’ Wellbeing in Islamic Banks: A Proposed Framework," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 11(1), pages 83-102, March.
    4. Shujaat Saleem & Fadillah Mansor, 2020. "Exploring Compliance of AAOIFI Shariah Standard on Ijarah Financing: Analysis on the Practices of Islamic Banks in Malaysia," JRFM, MDPI, vol. 13(2), pages 1-13, February.
    5. Kader, Haithem, 2021. "Human well-being, morality and the economy: an Islamic perspective," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 28, pages 102-123.
    6. Norliana Mohammad Hamber & Mohamed Aslam Haneef, 2017. "Waqf-Based Social Micro Venture Fund: A Proposal for the Malay-Muslim Community in Singapore صندوق للتمويل الأصغر القائم على الوقف للمشاريع الاجتماعية: مقترح لمجتمع المسلم الماليزي في سنغافورة," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 30(1), pages 37-60, January.
    7. Salih Kalayci & Behic Efe Tekin, 2016. "Interactions between Economic Growth, FDI and Islamic Banking Development in Turkey," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(8), pages 230-230, July.
    8. Ahmed, Tayyab & Masih, Mansur, 2017. "Is islamic stock index related with conventional stock index ? evidence from the UK," MPRA Paper 102967, University Library of Munich, Germany.
    9. Abdul Aziz, Ahmad Faizal & Mohamad, Shaifulfazlee, 2013. "Fulfillment of Maqasid al-Shariah via Takaful," MPRA Paper 47776, University Library of Munich, Germany.
    10. Nor Zarina Abu & DjasrizaJasin & Shaikh Hamzah Abdul Razak & Kamaruddin Sharif, 2014. "Corporate Governance and Maqasid Shariah: An Empirical Study on Management Practices of Takaful Operators in Malaysia," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 3(1), pages 41-56.
    11. Miah, Mohammad Dulal & Kabir, Md. Nurul & Safiullah, Md, 2020. "Switching costs in Islamic banking: The impact on market power and financial stability," Journal of Behavioral and Experimental Finance, Elsevier, vol. 28(C).
    12. repec:abd:kauiea:v:30:y:2017:i:1:p:37-60 is not listed on IDEAS
    13. Ardiansyah Rakhmadi & Abdul Ghafar Ismail & Achmad Tohirin & Jaka Sriyana, 2022. "Measuring sharīʿah Compliance Model: Evidence from Islamic Banks in Indonesia نموذج قياس الالتزام الإسلامي: أدلة من البنوك الإسلامية في إندونيسيا," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 35(1), pages 23-40, January.

    More about this item

    Keywords

    Islamic economics; Islamic banking; Maqasid al-Shariah.;
    All these keywords.

    JEL classification:

    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)

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