Abstract
Examining Maqasid Al-shariah in Islamic Banks: Before and after Value-Based Intermediation Implementation
Highlights
Islamic banking institutions should firmly uphold their vision and mission reflecting maqasid al-Shariah. Al-Ghazali (1997) defined maqasid al-Shariah by emphasizing the Shariah component of the term in safeguarding five objectives of Shariah related to the well-being of people, namely their din, nafs, aql, nasl, and mal
This study aims to compare the practice of some Islamic banks in realizing maqasid al-Shariah through their available products and services before and after Value-based Intermediation (VBI) implementation
With VBI, Bank Negara Malaysia (BNM) aspires that the roles and impacts of Islamic banks will be strengthened and maqasid al-Shariah can be realized in a sustainable financial ecosystem
Summary
Islamic banking institutions should firmly uphold their vision and mission reflecting maqasid al-Shariah (objectives of Shariah). Al-Ghazali (1997) defined maqasid al-Shariah by emphasizing the Shariah component of the term in safeguarding five objectives of Shariah related to the well-being of people, namely their din (faith), nafs (lives), aql (intellect), nasl (posterity), and mal (wealth). The final objective of maqasid al-Shariah is the protection of wealth, which stipulates that Islamic banks should provide products and services associated with legitimate trade activities, equal profit and loss sharing and a righteous corporation centering on justice and trust This ensures the prevention of exploitation, injustice and unequal distribution of wealth and the elimination of any form of riba, gharar, maysir elements for a fair and equal distribution of wealth among stakeholders (Shehu et al, 2015). The featured strategies encouraged VBI application which will prompt to a more advanced set of products and services offered by Islamic bank institutions for an improved conduct of entrepreneurship, better welfare of the community, and financial growth, without placing shareholders’ returns in jeopardy This direction of BNM marked another milestone for Islamic banking and finance in Malaysia through its notable growth with a newly introduced strategic intermediation concept, named as VBI. The objective of this study is to compare the practices applied by different Islamic banks in achieving maqasid al-Shariah through their available products and services prior to as well as following the VBI implementation
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