Law and Practice of Modern Islamic Finance

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Allah creates human beings in the world in order to become his servants and vicegerents. The concept of vicegerent, as the servant and vicegerent of God, we have an objective to manage and develop the world in accordance with God’s rules and regulations. It benefits human to gain goodness in this world and in the Hereafter. As a vicegerent on earth and trustee of Allah, man is directly responsible and accountable to Allah for his deeds. Whatever he does in this world has consequences in the Hereafter. The concept of vicegerency is comprehensive in its meaning and implications. It provides uncountable values for man to shape his social life.

The philosophy of Islam as a way of life (al-Din) harmonizes the achievement of Maqasid al Shariah. Al-Din means religion and looking after the needs of the family, society and the nature is one of the obligations in al-Din. These responsibilities are vital for human as it is a part of ibadah or worship. According to Saleem (2009) there are three categories of protection provided by the shariah for public interest(maslahah). The first one is essentials (dharuriyat), which are needed for the establishment of welfare in this world and also in the hereafter. Secondly are necessities (hajyat), which are provisions that move away the hardship and thereby facilitate life. The third and the last is embellishment (tashniyat), which are provisions that bring comfort and beauty to life.

The usefulness of the concept of Maqasid al Shariah in Islamic Banking Sector in meeting the worldview can be measured based on the extent to which the goals in promoting justice and fairness to all creatures that can be seen by examining the fulfilment of the five essential elements: avoiding riba, ghahrar and maysir in product development and transactions, pricing the product fairly, has the knowledge (intellect) which benefit to economics, the developing of the product has the long term effect that not burden to all humans, and the sharing of...
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