Considering the Higher Objectives of Sharia (Maqasid) as a Safeguard for Islamic Banking
All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon Prophet Mohammad and upon all his family and companions.
Islamic banking is an integral part of the contemporary Islamic economic system, encompassing everything related to the transactions of Islamic banks and financial institutions, including financing, investment, and services.
The various Islamic financial institutions represent an effort to institutionalize a significant part of the Islamic financial system and codify it into rulings and fatwas that reflect the practical reality connecting these institutions with others or with individuals in society through financing and investment mechanisms, while also considering the social and ethical aspects related to their nature of work.
The emergence of these Islamic financial institutions is associated with noble goals, foremost among them being the establishment of an Islamic alternative to the prevailing traditional (usurious) system.
The experience of Islamic banking is a human endeavor, as it is an attempt to apply financing, investment, and service operations from an Islamic perspective. This makes it susceptible to criticism and evaluation and serves as a field for innovation and change. Annual conferences and periodic seminars are held to study this situation, identify weaknesses and strengths, improve standards, and initiate change.
It goes without saying that directing criticism toward the application or describing it as weak does not mean criticizing or undermining the general principles in Islamic Law of the case under consideration. The application of principles and general rules is a matter of conjecture, a human effort that may contain errors and correctness and varies from one jurist to another depending on differing understandings. However, the principles and general rules themselves are definitive matters that are unanimously agreed upon.
These principles and general rules, which we consider the basis for applying operations and services in Islamic banking, relate to the objectives of Sharia, the prohibition of evasive legal devices, and the consideration of the outcomes of rulings.
Considering the objectives of Sharia serves as a protective barrier for Islamic banking against the pitfalls of fatwas, the errors of justification, the exaggeration in religious matters, and the transformation of jurisprudence from innovative and renewal-oriented to merely patching up issues.
Moreover, consideration of the objectives of Sharia contributes to regulating evidence, meaning it monitors the processes of interpretation, inference, analogy, and Ijtihad through its various channels. [Objectives of Sharia and Economic and Financial Transactions, Dr. Abdul Latif Al-Sabbagh, presented at the Wednesday Dialogue at the Islamic Economics Research Center on 16-2-1420 AH, p. 13].
If we aim to correct the trajectory of Islamic banking, enhance its management, and justify its existence as a true alternative to usurious institutions that satisfy individuals' needs and contribute to the preservation of the nation's system and strength, this cannot be achieved through mere reactionary measures that monitor usurious banking and attempt to imitate it under an Islamic guise. Instead, it requires a collective effort to develop an Islamic economic system that originates from the essence of Islam, which is founded on the consideration of the objectives of Sharia.
The prominent scholar Muhammad Al-Tahir Ibn Ashour (d. 1973) referred to this in his works: "It has been established among our scholars that the preservation of wealth is one of the foundational rules of Sharia that fall under the category of necessity. Their discussions indicate that the system for the growth of wealth and methods of its circulation constitute the majority of issues related to needs, such as sales, leasing, and Salam (Forward buying) contracts. I have mentioned in the previous section that the most important objective is the preservation of the nation’s wealth and its provision for the nation. Since the nation's wealth is collective in nature, its preservation occurs through regulating the methods of its overall management and the means of preserving individuals' wealth, as the preservation of the collective depends on preserving its components. Most of the financial legislation is related to the preservation of individuals' wealth, which ultimately leads to the preservation of the nation’s wealth, as the benefits of private wealth return to the public benefit of the nation's wealth" [Objectives of Islamic Legislation, Muhammad Al-Tahir Ibn Ashour, Dar Al-Kitab Al-Misri, Cairo, Dar Al-Kitab Al-Lubnani, Beirut, introduction by Hatim Bou Sema, 1st ed., 2011, pp. 297-298].
We notice in the words of this eminent juristic scholar a remarkable connection between the general and the specific, between objectives and means, and between the necessary and the need-based. The preservation of the nation's wealth is a necessary general objective, for which specific need-based means have been established, including the system for the growth of wealth, which encompasses all Sharia investment operations, means of circulation, and trading methods.
Furthermore, one of the necessary means to maintain the objective of preserving the nation’s wealth is regulating the management methods of its overall wealth, which includes official government management of funds, and regulating the preservation of individuals' wealth and the means of managing it, which includes private management of funds and banks.
It is also important to emphasize the significance of grounding Islamic banking fatwas in the general objectives of Sharia and considering the outcomes when issuing financial fatwas. In this regard, Imam Al-Shatibi — may Allah have mercy on him — stated: "Considering the outcomes of actions is a Sharia intended goal. Actions, whether in accordance with or in opposition to the Sharia, must be assessed based on what those actions will lead to." [Al-Muwafaqat Fi Usul Al-Shari'ah by Imam Abu Ishaq Al-Shatibi, with commentary by Sheikh Abdullah Daraz, Dar Al-Hadith, Cairo, 2006, vol. 4, pp. 431-432].
In another context, Imam Al-Shatibi said: "Anyone who seeks in the duties of Sharia something other than what it was intended for has contradicted Sharia, and anyone who contradicts it has invalidated their actions." [Al-Muwafaqat Fi Usul Al-Shari'ah by Imam Al-Shatibi, vol. 2, pp. 495].
Thus, it is a comprehensive reform project aimed at rectifying the course of Islamic banking, striving to develop it, and enabling it to compete in a market lacking the meanings of the lofty objectives of Sharia, which are based on achieving benefits and warding off harm. This project relies on four foundational principles:
1. Prohibition of oppression.
2. Prohibition of usury/Riba.
3. Prohibition of uncertainty/Gharar.
4. Consideration of objectives and benefits. [These principles were mentioned by Imam Ibn Al-Arabi Al-Maliki (d. 543 AH) in his interpretation of the rulings of the Quran, edited by Ali Muhammad Al-Bajawi, Dar Iḥya Al-Turath Al-Arabi, Beirut, Lebanon, 1st ed., vol. 1, pp. 110].
When all aspects related to Islamic banking — administrative, technical, legal, and Islamic — adhere to the aforementioned four principles, there will be no oppression, no usury, no uncertainty, and no violation of the requirements of the Sharia objectives. At that point, we will have placed our foot on the path to genuine reform that leads to change, innovation, and development in various aspects of Islamic banking. There is no doubt that this project requires specialized and skilled scholars, sincere intentions, and high aspirations.
And indeed, Allah is The Granter of success.
