Islamic Banking in the Context of Shariah Objectives and Islamic Legal Maxims

Abstract

Islamic banking and finance is actually a sub-component of Islamic economic system and is now a reckoned force in the global financial system. In comparison to the conventional economic ideals, Islamic economic system deals with not only the economic issues and problems, but also takes into consideration, the ethical aspects of society in order to ensure social and collective well being and economic prosperity. The aspect of just and fair allocation of economic resources lies at the heart of economic approach of Islam and Islamic economy’s core principle is to ensure that every strata of society including the rich, middle class and the poor all get the opportunity to live their lives in a functional and productive manner. The philosophy of Islamic banking is primarily pinned upon the Shariah fundamental and primary sources of Quran and Sunnah as well as on the secondary sources, from which Ijtihad is the main secondary source. Islamic baking paradigm endeavors to fulfill Shariah objectives by complying with the tenets of Shariah and operates in the light of Shariah principles and Islamic legal maxims to eventually meet the ultimate objective of falah (success and well-being) in this world and the hereafter.