The Relation of Maqasid Al Shariah to Finance and Banking

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  • Topic: Sharia, Islamic banking, Islam
  • Pages : 2 (692 words )
  • Download(s) : 213
  • Published : December 6, 2011
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How maqasid al-shariah related to finance and banking.

Maqasid comes from an Arab plural word which is “maqsad”, the root word is “qasd” which mean of intuition, aim or objective in an actions. Maqasid al-shariah is referring to the goal or objective to be achieved in an Islamic law. There are five main purposes of maqasid al-shariah there are; to preserve religion, to preserve life, to preserve wealth, to preserve intellectual and to preserve lineage. Maqasid al-shariah is one of the important guidance for people and it should be considered for improvement in financial system. Besides the Shariah rules and regulations, Maqasid al-shariah represent the most comprehensive instrument that can enhance the capability in finance and banking today, furthermore it give the guideline for people in managing and preserve the wealth complies with the shariah of Islam.

Nowadays, there are many of Islamic banking and financial institutions are established based on Shariah for example is Kuwait Finance House, Bank Islam Malaysia Berhad, Bahrain Islamic Investment Company and etc. this is because of the demand and the acceptance of legitimate financial institution. Many of Muslim people wants the financial products are based on the principles of Shariah. The system of Shariah and Islamic law is comprehensive to be practices in economic development and Islamic countries. The concepts of Islamic banking is not only includes the prohibition of Riba (interest) but it is includes in aspects of morality and equality of transactions. Islamic banking in the modern era, generally aim to promote and develop the application of Islamic principles, law and tradition to transaction of financial, banking and related business activity. The conventional banking is very different between Islamic banking; this is because of conventional only focuses on the profits itself and to maximizes the wealth of their shareholder. This is contrast between Islamic banking, which is to ensure the well...
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