Qualitative Analysis of Maqasid Al Shariah Based Model in Islamic Banks: A Way Forward

Abstract

Islamic banking has made tremendous growth in the last few years all over the world. However, people are not satisfied with the performance of Islamic banks with respect to their contribution to alleviating poverty and equitable distribution of wealth, achievement of socio-economic welfare, and human well-being. Therefore there is a need to critically review the current practices of Islamic banks and assess the need to develop a model of Islamic banking in the light of Maqasid al Shariah which can contribute to socio-economic welfare and human well-being of people by eradicating poverty and concentration of wealth. For this purpose, this study employs exploratory, qualitative research in which semi-structured face-to-face interviews are conducted with renowned Shariah scholars, Shariah Supervisory Board (SBB) members of Islamic banks, and renowned academicians. The grounded theory research approach is used in this study using NVIVO data analysis software. The results of this study show there is a dire need to develop a model of Islamic banking in the light of Maqasid al Shariah for the socio-economic welfare of the people. Both Islamic and conventional banks are in a capitalistic paradigm. Hurdles created due to a capitalistic mindset should be removed. Islamic banks could not bring a visible change in society with respect to the alleviation of poverty and the social well-being of the people. A new model focusing on achieving Maqasid al Shariah for the welfare of not only Muslims but all human beings on earth is the need of the hour in which socio-economic welfare should be given the primary role in the current practices of Islamic banks.