Search results

The purpose of this study/paper is the generalized ontological law of monotheism (unity of knowledge) and its functioning in the financial world system is summarized and contrasted with the recent conception of “shari’ah-compliance”. Thereby, some specific rulings of shari’ah-compliance in Islamic finance are critically annulled. The principal problem of the inability of shari’ah-compliance in the formalism of rate-setting and debt cancellation is pointed out in analytical ways. The alternative valuation models in the light of the Tawhidi ontological law are formalized. Many important issues are examined in analytical and Tawhidi authentic ways of Islamic law contra to shari’ah-compliance.

The epistemological approach commencing from the Tawhidi ontological law is used as the premise of developing analytical formalism to counter the irrelevant rulings done by the field of shari’ah compliance. Thereby, endogenous moral and ethical foundations are studied in deriving analytical finance models of asset valuation, rate-determination and debt cancellation.

Substantive analytical results are derived for intellection in the area of the primal ontological law of Tawhid that negates many of the rulings framed up in shari’ah-compliance area of Islamic law. These results can guide financial academia, practitioners and policymakers.

The paper can be expanded subsequently to the area of analytical Islamic finance in general by further investigating the Modigliani and Miller theorem on optimal debt-equity structure of corporate finance. An introduction to this study is provided in this paper as a starting point of dealing with the debt problem of shari’ah-compliance.

The paper presents important guidance as input for the rulings of shari’ah-compliance idea held by shari’ah advisory boards and similar institutions presently operating at the financial level.

The paper presents a subtle transformation of the social and financial order in the light of the Tawhidi ontological law quite differently from the way that shari’ah-compliance envisions.

The theoretical and projected applied perspectives in analytical finance presented in this paper provide a methodological worldview for all areas of social finance with ethical consciousness. Such analytical approach is much needed today in the reconstruction of global finance in the scale of ethics and away from the sole focus on capital market efficiency.

Shari’ah compliance has been a subject of debate to academics, Islamic scholars and practitioners since its inception in 1983. Besides a wide range of publications in Shari’ah compliance, only a few studies have examined Shari’ah-compliant risks especially among the Islamic banks. This paper aims to investigate the factors of Shari’ah-compliant risks in Shari’ah compliance under the Shirkah-ul-milk (hire purchase) in Bangladesh.

The investigation of Shari’ah compliant risks from both bankers and clients were gained via a structured questionnaire to acquire a better understanding of Islamic banking practices in Bangladesh. In analyzing the data, two empirical tests were used to draw inferences on Shari’ah-compliant risks–Shari’ah compliance relationship: the measurement model, a diagnostic test, was used to justify the reliability and validity of constructs, and the partial least squares structural equation modeling was applied to examine the hypotheses on the existent links between Shari’ah-compliant risks and Shari’ah compliance under Shirkahul-milk.

Unlike previous studies, the empirical evidence provides the pertinent attributes of Shari’ah-compliant risks, which are more significant in avoidance of the compliance of Shari’ah laws in banking operations. Such Shari’ah-compliant risks are significantly raised by various comprehensive, operational, environmental and distributional risks in banking that have failed to address fairness, justice and economic well-being at the transactional level.

A new empirical evidence focusing on the propagation of Shari’ah-compliant risks is preferred for effective Shari’ah compliance in operations as being an original structure of Islamic banks.

To establish these definitions we revisit expression (5.3) of Chapter 5. Since this expression describes a phenomenological model of knowledge transmission from its epistemic origin to the world-system by learning processes, therefore, we first summarize the arguments on what can be the nature of (Ω,S) in this expression. Our arguments were centered on the contrasting nature of moral absolutism and the ethical meaning so derived. This axiomatic core of the arguments stood up against moral relativism of both the rationalist and religious types on which is premised a different meaning of ethics.

To meet the philosophical underpinnings of Islamic financial institutions (IFIs), a sound shari'ah governance framework (SGF) for each and every IFI is vital. Establishment of a proper SGF is central for smooth and effective functioning of an IFI. In the periphery of shari'ah governance (SG), the role of Shari'ah Supervisory Boards (SSB) is considerably crucial. SSB constitutes one of the most important SG elements in a given IFI. One of the central objectives of SGF is to protect and boost the authenticity of IFIs among its stakeholders, which is instrumental for the resilience and growth of the industry. To achieve this, it is required that an end-to-end shari'ah assurance process is functionalised at IFIs. To this end, external shari'ah audit, which is a process of objectively evaluating the entire operations of an IFI from shari'ah perspective and ascertaining that all events are based on shari'ah principles, is of paramount significance.

The Maqāṣid (objective) hierarchy is a triple-tiered conceptualisation of individual and social needs that is grounded in the five objectives of Sharīʿah (Islamic Law). Managerialism is the ideological representation of human interaction based on managerial doctrines and practices. This paper aims to explore the tension between the Maqāṣid hierarchy and managerialism by evaluating the Sharīʿah requirements in the Islamic Financial Services Act (IFSA) 2013 of Malaysia from the Maqāṣid al-Sharīʿah perspective.

This qualitative study uses an inductive approach to review the sources of Sharīʿah and classical literature of Islamic jurists to present Sharīʿah rulings on managerialism and Maqāṣid al-Sharīʿah.

The Maqāṣid hierarchy promotes a vision of human life that is the opposite of managerialism. In the case of IFSA 2013, the Maqāṣid hierarchy, which is supposed to be the bedrock for Islamic finance, is replaced by a managerial hierarchy closer to Maslow’s hierarchy than it is to Imam Shatibi’s concept of human life. A process of fitting the Maqāṣid hierarchy into a narrow managerial mould occurs in IFSA 2013, meaning that many of the unique aspects of the Maqāṣid al-Sharīʿah are lost.

This study will assist Sharīʿah scholars, policymakers and Islamic financial institutions to develop the financial system and to implement the Maqāṣid al-Sharīʿah to improve macro policy and shaping Islamic institutions.

This is a pioneer study that develops a bridge between the Islamic Maqāṣid and conventional managerial hierarchies, which will encourage academics and practitioners to enrich the literature by conducting more in-depth studies on this topic.

This paper aims to provide analysis on the state of Islamic finance through critical appraisal on its current form and practices. This paper argues that the current form of Islamic finance practices is due to its legalistic approach and hence requires value-oriented reform. In this regard, Shari’ah governance system can be one of the mechanisms toward such reformation.

This paper uses case study research method and comparative studies of other’s works to develop understanding on the extent of Islamic finance practices. The study utilizes descriptive, comparative and critical analysis approaches in extracting and analyzing the information.

The literature has indicated the growing frustration of scholars and proponents of Islamic economics on the failure of Islamic finance in addressing the real economic and ethical issues beyond the legal realm of Shari’ah compliance. Legalism leads to a narrow understanding and ignores certain dimensions of Islamic finance practices. Considering all factors and through critical observation, this paper argues that the current form of Islamic finance practices is due to its legalistic approach and hence requires value-oriented reform. At this juncture, the paper suggests that Shari’ah governance system can be one of the mechanisms toward such reformation.

This paper provides valuable discussion and fresh and recent information on Islamic finance practices, including Shari’ah governance practices of Islamic financial institutions (IFIs) through case studies. The study shares experience of Malaysia in developing its Islamic finance framework and practices from legalistic toward value-oriented approach.

This paper aims to undertake a critical evaluation of the purpose and objective of Islamic Law, namely, maqasid as-shari’ah, as it has evolved in Islamic scholastic experience. But, the greater philosophy and potential of maqasid as-shari’ah within the great design of the monotheistic law, sunnat-Allah, is explained. Such explanation is carried out in the light of the core of Islamic epistemology that directly induces Islamic Law.

This critical evaluation is pursued in the light of the epistemological worldview and its methodical formalism of unity of knowledge contra a differentiated and conflicting view of human experience in rationalism. The episteme of unity of knowledge is Tawhid as the law of everything in the precept of unity as understood by the monotheistic law, sunnat-Allah. In the light of the extendibility of maqasid as-shari’ah across the relationally unifying domain of sunnat-Allah, the potentiality of shari’ah in terms of res extensa (epistemic extension) and res cogitans (cognitive capacity) is discussed.

Various occidental thoughts in this quest for extendibility of the epistemic totality are critically examined by the Tawhidi monotheistic law. The universality of the Tawhidi law of monotheism in respect of its characteristics of res extensa and res cogitans is studied to bring out the potentiality of maqasid as-shari’ah. Thereby, the new vision of inter-systemic extensions across diverse domains of intellection interactively unified together is formalized. This formalism goes beyond the existing limits of maqasid as-shari’ah confined as it is to worldly socioeconomic affairs (muamalat).

A much broader investigation is opened up by this paper that can be extended by academic work.

The practical support of the criticism against both the idea of shari’ah-compliance and the incomplete implication of maqasid as-shari’ah as presently understood among Islamic scholars is carried out by a detailed empirical work. The extension to the choice of a new financial instrument of Foreign Trade Financing Certificate is introduced.

The critical discussion launched in reference to the wider meaning, objective and purpose of maqasid as-shari’ah under the epistemology of the Tawhidi methodological worldview results in the substantive understanding of maslaha, well-being. Maslaha as well-being forms the ultimate index of socio-scientific valuation under maqasid as-shari’ah in the light of the Tawhidi epistemological worldview. Thereby, the perspective of socioeconomic development, and more extensively socio-scientific intellection, is brought out as extensively participatory evolutionary process under the principle of unity of knowledge (Tawhidi episteme). Brief examples are invoked to establish this fact. An example of measured multidimensional well-being (maslaha) as the final index of participatory organic relations that maqasid as-shari’ah ought to project in reference to Tawhidi methodological worldview is represented.

This is a distinctively original paper in an area that has not been investigated thus far. Besides, much scope for further intellectual investigation is opened up.

This paper aims to open the gateway of methodological abstraction and its application in an Islamic perspective in a way that has not been carried out before in Islamic literature. That is because of the absence of ontological and epistemological inquiry in Islamic erudition for a long time now. In the case of the Shari’ah and its induction of socioeconomic studies, the span of intellection and application ought to be premised on the ontological, epistemological, phenomenological and continuity attributes derived from the monotheistic law. This takes the formalism of organic inter-causal unity of being and becoming between the complementary good choices of life. The ontological monotheistic law of unity of knowledge is referred to as Tawhid in the Qur’an. Empirical work is done in support of the argument presented in this paper.

This paper is a formal contribution in the direction of developing a model of well-being based on the methodology of unity of knowledge arising from the Tawhidi epistemic foundation. In this regard, a methodologically interrelated theoretical and empirically applied study is accomplished to test the argumentation and hypothesis of endogenous systemic embedding of inter-variable causality between Shari’ah and economic and financial issues.

In spite of the epistemic approach to explain the embedding model of interrelationship between Islamic law and details of the socioeconomic field, Islamic scholarship and practice in all fields have remained oblivious to its epistemic roots. Consequently, as presently understood, Shari’ah and economics and the various socio-scientific specifics, as of Islamic finance and financial and religious institutions in these areas, could not make a generalized model of social well-being, one that can be simulated by inter-variable causal relations.

The paper conveys a critical conceptual idea to debate the scope and approach of Islamic Law, Shari’ah, on economic matters. The system-oriented approach is used to formulate a systems theory of integration between Shari’ah and economics. The results of the approach implemented in this study constitute a major contribution of this paper to scholarship in general and acts as a critique of traditional Islamic thought with respect to Shari’ah and economics.

In order to fulfill the Shari'ah objective of promoting the welfare of society, institutions offering Islamic financial services (IIFS) are expected to consciously align their decisions and actions so that they are “socially responsible”. An integral policy approach towards corporate social responsibility (CSR) would constitute assigning explicit social objectives to IIFS over and above their economic, legal, Shari'ah, and ethical responsibilities. Alternatively, the task of undertaking socially‐oriented projects could be argued to be a discretionary responsibility of IIFS, with the objective of CSR being sought merely as a peripheral practice. Recent debates on the evolution of the practice of Islamic finance highlighted the profit and economic efficiency motives of IIFS rather than their concern for socio‐economic equity and welfare. A divergence between the economics literature on Islamic finance and the course taken by the practical field of Islamic banking and finance has been argued to be arising over the years. An assessment of this contention motivates this study. The paper aims to discuss these issues.

The study seeks to assess the corporate social performance (CSP) of a sample of 46 IIFS, located worldwide, which have responded to a questionnaire survey and whose CSR practices have been further verified by content analysis.

The findings revealed that the majority of the Islamic financial practitioners believed in attributing an integrated social role to IIFS. However, the practices of the IIFS reflected a more limited approach to CSR. Most of the IIFS were observed to be focused on meeting their legal, economic and Shari'ah responsibilities, that is, were concerned with the goals of profit maximisation and for their transactions to meet Shari'ah compliance. CSR was practised as a peripheral activity by the IIFS as opposed to being an integral, well thought‐out and deliberate policy decision of management.

If the welfare of Muslim communities and general human well‐being are to be promoted by IIFS – in line with the maqasid al‐Shari'ah – this study questions whether the organisational structure of IIFS should be revisited and be re‐orientated to facilitate their efficient performance in terms of contribution towards social development and human well‐being. The question about the most appropriate business model of the Islamic finance practice that will bring about such a socially responsible outcome is yet to be resolved. This could be an important area for future research.

This study rises to the call of some Islamic researchers who voiced out the need to assess the performance of IIFS vis‐à‐vis their social objectives. The study is among the pioneers to quantify CSR practices of IIFS by conducting an empirical analysis on the CSP of the IIFS.

The purpose of this paper is to analyse three drivers of the Islamic economy: global Muslim demography; operational sectors and demand; and faith-based consumerism.

This paper follows a constructivist approach to the Islamic economy, undertaken through an exploratory study of global Muslim population, the growth in opportunities in the Islamic economy and plurality of religious thought across the diaspora.

The research finds four trends (t) positively impacting the growth of the Islamic economy: (t1) above-nominal increase in global Muslim population, with greater intra-religious interactions of varying Muslim cultures; (t2) an increasing demand for a diversity of Shari’ah-compliant and halal products and services; (t3) improving socio-economic status of Muslims in developed and emerging countries; and (t4) a widening perspective of faith understanding and rising interest in religious literacy.

This research serves to inform global businesses of opportunities in Islamic economy sectors, highlighting global demographic change and informing how business is impacted through the plurality of Muslim faith interpretation.

Based on this research, businesses can better align their services with the socio-economic environment and faith sensibilities of Muslim consumers.

The paper provides a first look at the activity across Islamic economic sectors and disaggregates their activity and potential for growth across Muslim-majority and Muslim-minority markets. In particular, three areas were examined – demography, emergent Muslim lifestyles and religiosity.