A THE NATURE AND OBJECTIVE OF ISLAMIC BANKING

Abstract

Shari’ah has its objectives and the ultimate goal of Shari’ah is to bring benefit and prevent harm from people at large. This paper intends to discuss the objectives of Shari’ah particularly in banking and finance. The focus will be in looking at the current practice and examine to what extend this objectives has been meet and which are the areas that need to be improvised. It will begin by defining maqasid (objectives) al-Shari’ah by looking at the different definitions provided by the scholars of maqasid generally and maqasid related to financial transactions specifically. It will examine the Qur’anic as well as the Prophetic guidance related to Shari’ah objectives in financial transactions.  The discussion will also focus on elaborating the general objectives of Shari’ah in financial transactions followed by the specific objectives of Shari’ah in this area.  The following discussion will focus on the application of these objectives of Shari’ah in the current practice of Islamic finance industry. Finally, the paper will conclude by providing some recommendation related to the topic.