Understanding of Maslaha and Maqasid al-Shariah …ukmsyariah.org/terbitan/wp-content/uploads/2015/10/02-Mohd-Daud... · International Conference of Global Islamic Studies 2014 12

International Conference of Global Islamic Studies 2014

12

Understanding of Maslaha and Maqasid al-Shariah Concepts on Islamic

Banking Operations in Malaysia

Mohd Daud Awang, [email protected]

(Academic Visitor at DCIEF, Durham University, Nov. 2013-Nov. 2014)

Senior Lecturer, [email protected]

Faculty of Human Ecology, Universiti Putra Malaysia, 43400 Serdang, Selangor,

Malaysia

Mehmet Asutay, [email protected]

Director, Durham Centre for Islamic Economics and Finance, Durham University

and

Mohd Kamal Azman Jusoh, [email protected]

Senior Lecturer, Universiti Teknologi Mara (Pahang), Malaysia

Abstract

Since the 50's, Malaysia has taken the lead in the role of studies on Islamic Banking

and Financial System (IBFS). Malaysia has successfully introduced a variety of IBFS

products and services and thus is recognised globally as a front-liner of the Islamic

banking and finance industry. Nevertheless, world recognition and past success do not

stop the industry from facing new challenges and issues. Many Islamic scholars

continue to work on their research in IBFS for innovation to fulfil the Muslims’ needs

for Shariah-compliant products and services. This in turn, requires a thorough

understanding of the Islamic jurisprudence methods. However, some researchers

argued that Maslaha and al-Maqasid, in the recent financial issues have shown that

there might be negative implications on individuals such as bankruptcy and family

financial problems based on some Islamic debt products and services. From an

economic stand, if the issues worsen, this could lead to a crisis. Relating these

indications to the proactive debt financing, it is found to contradict the Maqasid al-

Shariah. Therefore it is crucial to understand the depth of all aspects that utilise

Maslaha and al-Maqasid concepts as reference. This paper explores and identifies the

concepts of Maslaha and Maqasid al-Shariah in Islamic banking operations with a

holistic understanding. The research also includes a critical analysis on the issues of

uses of these methods as a systematic jurisprudence. At the end of the paper, some

suggestions are provided on ways to improve the development of IFS in Malaysia in

order to make the IBFS more resilient and competitive through the understanding of

Maslaha and Maqasid al-Shariah for the well-being of the users.

mailto:[email protected]


13

1. Introduction

Malaysia introduced Islamic Banking System (IBS) via the establishment of Bank

Islam Malaysia Berhad (BIMB) in 1983. The success of the inception of Islamic

banks is the result of a collective efforts between economists and local Islamic

scholars in understanding the issues and needs of Muslims for Islamic finance to

achieve Maqasid al-Shariah as it does not involve interest or riba-free. IBS is an

Islamic system of financing that is based on the business rules of Islamic laws;

Ahkam Muamalat. It is also pronounced Fiqh al-Maliyyah as the business dealing

between individuals in exchanging properties or benefiting (Wahbah al-Zuahaili:

1997). In general, IBF products were derived from Islamic business contracts such as

al-Bai’, al-Ijarah, al-Wadiah, al-Mudharabah, and al-Musyarakah. For example, al-

Wadiah is for savings account, al-Bai’ is for Islamic home or car-financing and al-

Ijarah is for Islamic commercial-financing.

Facing current challenges in the banking and finance industry, many banks have taken

initiatives to introduce more services and approaches to attract people to become their

customers including Islamic banking. Unfortunately, there have been some difficulties

to get a consensus from all Islamic scholars for some contracts of IBF products. This

is either because the contracts are in new formats or require some restructuring. This

has resulted in having the IBF institutions to monitor the Islamic banking and finance

products in order to fulfil customers’ financial needs to achieve Maqasid al-Shariah

by providing Shariah-compliant financial products and services. Many Islamic

scholars refer to Maqasid al-Shariah and Maslaha concepts. Therefore many of

Islamic scholars refer to Maqasid Shariah and Maslaha concept as arguments and

suggestions of the contracts. Although, the questions of the issues seem to be whether

the implications of these contracts are more Masalih or more Mafasid. Therefore, this

paper discusses the issues raised using Maslaha concept, which will overcome the

issues of IBF operations and allow banks to continue offering financial products and

services that are in line with the Muamalat rules or are Shariah-complicant to achieve

Maqasid al-Shariah. This study also aims to explore the confusion prevalent in the

industry – the use or abuse of the concept – in relation to Maqasid al-Shariah through

the insight of Maslaha. On that account, if the result of the research indicates that

there is an abuse of practice in the current application of the concepts, this paper will

suggest some measures that can be taken to improve the system thus ensuring that all

aspects of IBF achieve the true meaning of Maqasid al-Shariah.

2. The Meaning of Maslaha and Maqasid Al-Shariah

Maslaha is important mechanism of Shariah in facing the challenges of social change,

needs and development in the modern times that understand relation between Islam

law and these natures. Many scholars and writers attempt to elaborate the role of

Maslaha concept and objective of Syariah or Maqasid Syariah to solve current and

contemporary problems. This mechanisms or concept stand from the spirit of

compassion and mercy as such term in the Quran: “We have not sent you but as

mercy to the worlds” (21:107). On another note one can refer to the concessions that

Allah said “Allah burdens not any soul but according to its capacity” (3: 286).


14

2.1 What is Maslaha?

Maslaha is benefit or useful acknowledge by Shariah. It also can meant as public

interest. All of the jurists define Maslaha in literally means benefit or interest, and in

technical term means unrestricted public interest in the absence of regulation by the

Allah and when no textual authority can be found on its validity or otherwise. For

instance, the Companions decided to impose tax (kharaj) on agricultural lands in the

conquered territories despite the fact that no textual authority could be found in favour

of this. Al-Ghazali, define “maslahah as consists of consideration which secure a

benefit or prevent a harm (prohibition).”. It is also defined as a consideration which is

proper and harmonious (wasf munasib mulaim) with the objectives of the Shariah,

either by securing benefit or preventing harm in situation where there is no indication

as to its validity. If the consideration is contrary with the textual, it shall not be

considered as Maslaha or maslahah mutlaqah because it is not in light of Shariah.

Maslaha broad use in Islamic law in such secondary areas as economics, business,

Halal food and other worldly activities require flexibility and development according

to time and space. Among the first jurists who regarded Maslaha as a legal principle

in legislation are al-Juwayni, al-Ghazali, al-Razi, al-Shatibi, Schactt, Ahmad Hasan,

Kamali etc (Wan Azhar, 2003). There were also evidence that in the time of Hanafi,

Maliki and Shafie, also apply some of Maslaha practices through there were no

precise definition of the principle for the consideration of Maslaha (public interest).

For example Imam Malik once said that” It is permisibble to kill one-third of the

people for the interests of the remaining two-thirds” (al-Zuhaili, 1986). Kamali

(2008), expended the meaning of Maslaha to the realm of justice which is very

meaningful in the life of the peoples in the modern time. These is because the

meaning from Islamic law and Maqasid on the particular aspect and seem has limited

and confusing. For example, according to Kamali, he said that Maslaha aim to achieve

the Justice which it is not only in its corrections and retributive sense of adjudicating

grievances but also in the sense of distributive justice, establishing equilibrium of

benefits and advantages in society. He added If Shariah fail to preserves public

interest it means that Islam has failed to serve its followers. This is surely absurd.

From these points, the meaning of Maslaha in line with the objective of Shariah is not

to impose any difficulty or inconvenience on people but in additional it is promotes in

assisting on goodness, benefits and utility. This view is aim actually to express the

meaning of Maslaha is the Maqasid indirectly. Before his opinion about justice, al-

Qurtubi had illustrates the meaning of maslahah in establishing justice. Some cases

are more related to establish justice than to understand Maslaha itself.

2.2 What is Maqasid al-Shariah?

Maqasid al-Shariah (Objectives of Shariah), is a term that is derived from two words.

The first word; “Maqasid is the plural form of “Maqsad” which means “purpose” and

the latter; “Shariah” means Islamic Law. According to Imam al-Ghazzali: Maqasid

al-Shari`ah is to promote the well-being of all mankind, which lies in safeguarding

their faith (din), their human self (nafs), their intellect (`aql), their posterity (nasl) and

their wealth (mal) (M. Umer Chapra, 2000; Tawfique Al-Mubarak and Noor

Mohammad Osmani, 2012) . According to Kamali (2012), al-Maqasid al-Shari’ah, or

the Higher Objectives of Shari’ah, is a manifestly important and yet somewhat

neglected discipline of the Shari’ah. The fundamentals of Shariah generally focused

on the well-being of both individuals and the community and the law is designed to


15

protect those benefits and to facilitate the improvement and betterment of the quality

of life. Kamali is a well-known scholar of Maqasid al-Shariah and he has explained

the term in a few different ways. In one article, he defines Maqasid as a tendency to

have a quality of constancy and permanence and it may well be the ultimate purpose

of Maslaha and stands a degree above it and others. Other than his own, Kamali has

also brought together a lot of Maqasid definitions by other scholars. For example,

Raysuani suggests that Maqasid is the end goals of Shariah and al-Qardawi said,

Maqasid consists of the attraction of the people to benefits and repelling them from

harm and corruption (Kamali, 2011). Kamali said, that al-Zuhaily has describes

Maqasid as the ultimate goals that aims for consequences and meanings which the

Shariah has upheld and established through its laws and consistently seeks to realise,

materialise and achieve them at all times and places (ibid).

Here we can conclude that the meaning of Maqasid al-Shariah is all the Shariah goals

comprising of five core values; faith, life, lineage, intellect and prosperity. This study

focuses on what Maqasid al-Shariah is in Islamic finance. Dusuki (2011) said, Islamic

finance of essential Maqasid is second category after preservation of religion. Many

papers have discussed this topic and the most important measure is to avoid riba or

interest. Most people have understood this purpose. The more important matter is for

them to understand financial issues regarding Maqasid al-Shariah such as how it could

help manage economic crises and bankcruptcy issues. The objectives of preservation

actions of Maqasid al-Shariah is to lead people and Islamic entities for the well-being

and prosperity in this world and the hereafter – al-Falah.

2.3 Relationship between Maslaha and Maqasid al-Shariah

“Maslaha” literally means “benefit” and is one of the methods of Islamic

jurisprudence but the term “Maslaha” has also been recognised as “Maqasid” which

means al-Dharuri situation or essential level of benefits. This opinion is approved by

Dusuki and Abdullah. They said, Maslaha sometimes connotes the same meaning as

Maqasid, and scholars have used these two terms almost interchangeably (Dusuki, A.

W., Abdullah, N. I., 2007). Kamali (2008) also wrote something similar in this book

titled “Maqasid Al-Shariah Made Simple”. He said that the entire range of Masalih-

cum-Maqasid can be grouped into three categories in a descending order of

importance, beginning with the essential Masalih (daruriyyat), followed by the

complementary benefit (hajiyyat) and then the embellishments (tahsiniyyat). All

categories relate to the five core values mentioned earlier; faith, life, lineage, intellect

and prosperity. Achieving the optimal level (al-Dharuri) of all categories of Maqasid

is considered “Maslaha”.

The Essential interests accordance to ‘Abas Husni Muhammad (1983) means “thing

which must be executed for the necessary protection and benefit of the ummah in life

and hereafter”. Kamali (2008) define the essential interest to meant that to create

normal order in society as well as to sustain the survival and spiritual well-being of

individuals so much so that their destruction and collapse will precipitate chaos and

collapse of normal order in society. How to know this level and it’s different from

other level, is to understand the level of needs where it’s absent will lead to the

peoples’ destruction and collapse and what is not achieve these level, is not al-

Dharuri. This can be properly conducted when it can distinguish between different

needs. To understand the level of needs in case of the management of purchasing


16

needs, the needs to purchase should be refered to the real needs. It should be

differentiated between own needs and the enjoyment of life. This is important as there

are many cases of financing management that are too extravagant in spending. Islam

forbids the ummah to be excessive or wasting because it will lead the people to

destruction and collapse. Therefore a successful man must have high level of

sacrifice. He should know which one to sacrifice in accordance to the importance in

order to obtain better return. Understanding the definition of needs is something that

is a must to a certain extent in order to achieve harmony. Need is something that must

be provided. Whereas the ‘demand’ or ‘desire’ is something supplementary to the

needs which will just increase the level of satisfaction. However, when we do not

meet our desires it will only cause us to feel less satisfy. We can distinguish between

desire and needs based on its function. Something that we call desire will act

supplementary to the main function of needs. However if we do satisfy our need it is

intolerable. Therefore Islam do not like extravagant. Those who like extravagant and

wasting are considered as friend of evil.

Base on the above fact of discussion, and conclusion Maqasid al-Shariah have three

situations levels or interests. The first situation level as a key require flexibility and

adjusting to change with permanent features and mechanisms for adapting to change,

to fulfil the needs of the people in life and it was also be known as essential interests.

On the other hand, the essential Maslaha level can change to another levels (hajiyat or

Tahsiniyat) depends to difference situations such as in case of Ijarah that a Maslaha of

the second class is elevated to the rank of the essential Maslaha when it concerns the

public at large.To illustrate this, the validity of Ijarah may be of secondary importance

to an individual but it is an essential Maslaha for the society at large (Kamali, 2008).

For other example from Kamali, is in case of certain concessions (Ruhsah) that are

granted in the sphere of ibadat (other thing Muamalat) may be secondary to the

survival of an individual but become a matter of primary interest (essential) for the

community as a whole. In the event of a conflict arising between the various classes

of interest, the lesser of these may be sacrified in order to protect a higher interest.

This issue with reference to the Hadith where the Prophet has reportedly: When I

order you to do something, do it to the extent to your ability, but when I forbid you

from something , then avoid it (altogether). While al-Qaradhawi said, when there is a

plurality, then prevention of evil takes priority over the realisation of benefit (al-

Qaradhawi:1990). Kamali conclude this situation that the classification of Masalih

need not be confined to the divine (ahkam) of the Syariah or to religious matters alone

as it is basically a rational construct that applies to customary, social, political,

economic and cultural affairs and so forth accordingly. It also appears that classifying

a certain Maslaha under one or the other of these categories is likely to be relative

and involve value judgment that contemplate the attendant circumstance of each other

(Kamali, 2008).

The conclusion, all of the jurists recognized that Maslaha is one of secondary sources

of the Islamic law. While, the term of Maslaha, when it is define as the essential

benefits level or al-Dharuri so it become the first of Maqasid al-Shariah categories.

Al-Dharuri can measured by understanding of differentiate of needs requirement on

certain situations in resulting as exact Maslaha in light of Shariah. In the other words,

based on the above fact of discussion that al-Dharuri level as a key require flexibility

and adjusting to change with permanent features and mechanisms for adapting to


17

change, to fulfil the needs of the people in life and it was also be known as essential

interests. Therefore Maslaha and Maqasid al-Shariah very close relation and cause

some of people think that both are same but in correctly understanding the word of

Maslaha or benefit used for explanation meaning of Maqasid as term: protection of

benefits.

3. Analysis of Maslaha and Maqasid Al-Shariah on Islamic Banking and

Finance Contracts in Malaysia

This section will explore how Maslaha and Maqasid concepts implement in IBF

contracts. Of course, it not refer to knowledge of fiqhiyyah alone but has expended to

the realities of economy or nature of economy. It meant that products which are not

only Islamic compliant, but are also Shariah compliant, i.e. compliant with the

maqasid al-Shari’ah, without violating the business natures of being competitive,

profitable and viable in the long run (Tawfique Al-Mubaraka and Dr. Noor

Mohammad Osmani, 2012). If there is fail to understand the reality of economy terms

that also fail to use of Maslaha concept accordingly.

Indeed, Maslaha is the way of Shariah, while IBF is the outcome of Islamic economy.

In developing of IBF operations of establishing products and services on particular

approach so much so that refer to maslaha concept. It also must emphasize the

principles or values of Islamic moral economy (IME), the well-being as a result of

maqasid and ensure the protection of the people interests individually or in the

community. According to Asutay (2012) the consequentialist nature of economic

development and the substance of the process, which, as a result, produced a ‘social-

welfare’ or ‘social good’ oriented developmentalist paradigm. He added the important

to make reference to the norms and values of IBFIs as formulated by the Islamic

moral economy (IME), which give meaning to the Islamicness of IBF. These

statements suggested that any approach of IBF operation that recommended through

Maslaha concept must also confirmed IME as one of the important aspect of them.

The IBF products not only introduce new products and services, over the

comprehensive operation applicable to protect people of precipitating to destruction or

chaos as the holistic view on Islamic perspective.

Maslaha has been an important concept in solution of IBFS operation issues to

achieve Maqasid al-Shariah. For the purpose, the implementation of Maslaha shown

by a new approach of some contracts with particular conditions and it must follow the

Shariah compliance as a Syariah. According to M.Fahim Khan and Layachi Feddad

(2005) regarding about standardization need in the growth of Islamic financial

industry described the IBFS need to Maslaha with clear words is the diversity and

flexibility in the contemporary application of Islamic law into complexities never

known in the past.

3.1 Analysis of Islamic Banking and Finance Contracts using Maslaha and

Maqasid al-Shariah Concepts

In Malaysia, Islamic banks have established many products successfully such as al-

Wadiah and al-Mudharabah savings accounts, Bai’ al-Murabaha and al-Musyarakah

for contracts of sale for cars and properties and Ijarah for commercial financing.

There are some contracts that refer to Maslaha and Maqasid al-Shariah such as Bai’


18

al’Inah, al-Tawarruk, Hibbah and mixed investment issues, Ijarah Sukuk. Therefore

Islamic scholars decided to adopt specific approaches linked to Muamalat activities to

fulfil customers’ demand by offering Islamic financial products in conventional

banks. As a result, several IBFS products under the Maslaha concept have been

successfully introduced in conventional banking such as Bai’ al-‘Inah and Tawarruk

for personal financing and Islamic credit card service, BBA and Murabahah for home

financing and Bai’ al-Dayn for Islamic debt financing. The following discussion

explains how the Maslaha and Maqasid are referred to in establishing these contracts.

i. Maslaha Concept For Bai’ al’Inah and Tawarruk Contracts

Bai al-‘Inah is a sell and buy-back contract. There are two separate transaction. Base

on the analysis by Mohd Daud, Norsazali, Mohd Kamal Azman and Sayuti (2013) has

discussed about the contract Bai’ al-‘Inah and its significant to the IBF operation is

consider as Maslaha concept. The question is why it is regarded to Maslaha ?. It is the

majority of jurists have rejected this contract due to contractual exercise similar on

agreement of loan. It also intrepreted as planning of two parties for cash money to

customer and to earn the profit for bank, which the transaction of sale of goods is not

intention of the parties but the hightlighted questions indicate that the main issue is

Helah reason or trick which related in the contrack as a view point due to riba or

usury. Meanwhile, accordance to Shafie opinion, it is permits as the contract has

fulfilled all of the pillars or elements of the Islamic contract of sale or in line of

Islamic law. In Malaysia this contract offered for Islamic Personal Financing and card

credit that they refer to Maslaha are due to two main factors. Firstly, there are

essential situation to offer these products and secondly, any contracts not applicable

for both of the products except Bai al’Inah and Tawarruk. The analysis also concluded

that the implementation of Bai’ al’Inah and also Tawarruk were considered as

Maslaha level as a result, through interviews with some of the Muftis and Executive

officers of Islamic Banking in Malaysia. It also concluded that Tawarruk contract

rather than Bai’ al-‘Inah contract and Bai’ al-Inah should be exercise. Bai al-’Inah

also should be restricted using and that only for difficult products to be structured. It

also must be monitored by authority bodies accordingly. All of them: Muftis and

Shariah officers of IBF have described that implementation of Bai’ al-‘Inah and

Tawarruk are in light of Maslaha as long as they remain significant to Islamic

financing operation. The arguments of Maslaha, can be understood through serious

requirement of IBF product personal loan and card credit as necessary need of the

people. If they are not offered, than the peoples will get them from the conventional

bank or sharks loan (illegal loan) which are confirm prohibited due to riba. At the

same time, there are nonexistence of applicable contract to be used for Islamic

personal financing except that if only Bai’ al-‘Inah and al-Tawarruk were exercise.

Hence the contracts require that all conditions pertaining to sale are fulfilled. On the

other reason refer at absently of particular text of hadith as proof of prohibition of Bai

'al-Inah specifically and most of hadiths which forbid it still in incontrovertible

validity (Awang Haji Metussin Haji 2006; Bank Negara Malaysia, 2007). An

additional proof can be refer to Imam Ibn Taymiyyah opinion about the usage of the

al-Tawwaruk contract. He is of an opinion that to get cash money in a desperate

situation (Dharuri) is permitted. Thus the Tawarruk and the Bai’ al-‘Inah are similar

approach that is strongly point of this view.


19

For the other reason, Islamic bank institution need significant product to perform the

financing liquidity of the capital fund. According to Fazlur Rahman Ebrahim (2005),

Bay Inah and bay Dayn are largely attributed to be application of contract in

consumer and trade financing and need to be understood to fully appreciate and

maximize the true potential and wisdom of Shariah. The significant of these products

can also be understood from the same author when he said, suitable IBF instruments

need to be developed to meet the requirement s of more diverse business activities. In

the global market, standardisation, harmonisation and application of Shariah

compliant products based on some general principles should be promoted.

The second contract is Tawarruk contract, that is has permitted by the 15th conference

of al-Majma al-Fiqhi al-Islami. However in the 17th conference, the contract of al-

Tawarruq al-Munazzam was banned in Islamic banking practices, whereas the

contract of al-Tawarruq al-Fiqhi is remain permitted as stated in the classical practice

(Majallah Majma’, 2003). The above statements and other discusions indicated

support to al-Tawarruk contract rather than bai al-‘Inah contract. In the middle east

contract of al-Tawarruk was used in offering Islamic financing products. For example,

personal financing at Shamil Bank of Bahrain and credit card products at Tayseer al-

Member in The National Commercial Bank (NCB) of Jeddah in Saudi Arabia.

Looking at this effort, more positive transaction which prefer to use the tawarruk

contract proved that Maslaha as not only sound but a good practice as well. (Mohd

Kamal Azman, 2014)

By inference, the Malaysia Central Bank (BNM) still allows Bai’ al-Inah and

Tawarruq based on a Discussion entitled “Muzakarah Cendikiawan Syariah

Nusantara’ on 28-29 June 2006 to examine and review the law of sale of Bai’ al-Inah

and Tawarruq in current practice and have decided as the follows are:

a. The permissible of Bai’ al-Inah and Tawarruq still in debating amongs jurists,

however for each view has its own arguments.

b. The permissible requirement for Tawarruk is similar to Bai’ al-Inah.

Therefore, both of them based of the same ruling.

c. Bai’ al-Inah contract is still necessity for the developing of Islamic finance in

national level. However, practitioners need to strengthen and streamline

operational processes and documentation must be comply all of the criteria of

Bai’ al- Inah as required. (Bank Negara Malaysia, 2007):

Currently, in Malaysia, the BNM encourages Islamic bank institutions who offer

personal financing to use Tawarruq contract which replace Bai’ al-Inah contract that it

can be considered as Maslaha efforts. All of full pledge Islamic bank (Bank Islam

Malaysia Berhad (BIMB) and Bank Muamalat (BMM) ) has decided to use al-

Tawarruk for credit cards and personal financing starting from 2013. Though, Bai al-

Inah is still in use, it is limited that only for necessary application or operation.

ii. Maslaha Concept For BBA and Murabaha Contracts

Murabaha and BBA contracts are distinguished from loan contract (conventional) as

their contractual capacity to earn profit income is based an underlying of Shariah of


20

exchange of real good and services. Nonexistence of such good invalidates the

contract. Pricing of the real good rather than the financing services accorded to the

transaction is the substance of the consideration of exchange. Not anticipating

subsequent productive activity during the ex-post sale or credit period, the contract

limit the price ceiling to the ascertained credit period agreed at the point of sale (Syed

Musa, 2005). Murabaha involving method of promising with other contract such Bai

al-‘Inah. On the other hand, severe criticism posed at the BBA financing is its

involvement in ‘hidden’ bay’ al-Inah contracts, where the financier buys and sells the

products back to the customer. (M.Fahim Khan and Layachi Feddad, 2005; Syed

Musa, 2005: Tawfique Al-Mubaraka and Dr. Noor Mohammad Osmani, 2012). While

in BBA the price BBA is higher than the price of normal transaction…The increment

in price is allowed in case of deferment of price in a sale contract provided that there

is asset to be sold which represent the subject matter of the contract or the object of

trade. Thererfore, the increase of price is against the commodity and not against

money or loan, otherwise it will be tantamount to riba. Maslaha can be understood

that the bank have to ensure its benefit of the satisfaction of price against the

fluctuations of financing system and buyer have no cash to purchase some properties

of necessary needs except by financing instrument. From the Maqasid Shariah in BBA

in imposing such requirements is to ensure a win win situation, whereby both parties

benefit from the transaction in a very satisfactory manner. There is an increase of the

price for the satisfaction of the seller (bank) by advancing the asset against deferred

payment and a scheme of instalment for the benefit of the buyer (Dr Achene, 2013).

BBA and Murabaha sometime will be engaging Bai al-‘Inah. In Syed Musa (2005), he

explain BBA and Murabaha conditions : “In financing activity the property has

become not only the object of sale but has become the basis for liquid funds to be

made available to deficit units. This particularly relevant in sell and buy-back

arrangements for re-financing. Bai al-‘Inah which has the characteristics of mark-up

financing resembles Murabaha except that it allows the customer to be the agent and

subsequent purchaser”. However the Central Bank of Malaysia has approved a

‘floating-rate’ BBA where the customer pays a monthly instalment amount that is on

the higher end, but subsequently gets a rebate based on the prevailing market interest

rate. The rebate showed that it is one conditions of Maslaha requirement. Therefore

this paper also suggest BBA and Murabaha have to review their price and rebate from

time to time to benefiting all the parties fairly and justice.

iii. Maslaha Concept For Bai al-Dayn Contract

What is Bai al-Dayn and what is product used this contract ? Bai al-Dayn or debt

trading or sale of debt can be defined as the sale of payable right or receivable debt

either to the debtor himself, or to any third party. This type of sale is usually for

immediate payment or for deferred payment. In Malaysia this contract used to

establish the Islamic securitized debt.

Controversy of this contract is whether engaging riba-based or not due to meaning

about the ruling is that financial transactions involving debt should never allow

deferred payment. According writing by Zaharudin, (2006), he said, to most Hanafis,

Hanbalis and Shafie jurists, it is not allowed to sell al-Dayn to non-debtor or a third

party at all. However Malikis, and some Hanafis and Shafie jurist allowed selling of

debt to third party with some conditions. The condition almost regarding about the

debt must be refer to validity commodity of Shariah. He also added, that the


21

Mainstream Islamic scholars have put a plug on the possibility of earning profit by

confirming that any sale of debt (Bay’-al-dayn) or transfer of debt (Hawalat-al-dayn)

must be at face value. (Zaharudin 2006; Saiful Azhar, 1999). While with reference of

Glossary (2013) Bai al-Dayn: to a large majority of Islamic jurists, sale of debt except

at its face value is not allowed. The International Islamic Fiqh Academy, Jeddah,

which is the largest representative body of Sharī’ah scholars and has the

representation of all the Muslim countries, including Malaysia, has unanimously

upheld the prohibition of bay al-dayn at a discount. (Resolution No. 101 (4/11), 1998)

In this paper, what the point to highlight is the role of Maslaha and how it related to

the contract of Bai al-Dayn. According to Achene (2013), bai al-Dayn was established

base on Maslaha due to the resolution of 2 meeting on 21 Auguts 1996, the Shariah

Advisory Committee (SAC) unanimously agreed to accept the principle of bay’ al-

Dayn i.e. debt trading as one of the concept for developing Islamic capital market

instruments. According to the council,“this was based on the views of some of

Islamic jurists who allowed this concept aubject to certain conditions. In the context

of the capital market, these conditions are meet when there is a transparent regulatory

system when can safeguard the maslaha of the market participants”. He added, the

council refer to maslaha by saying, “ The argument of the Islamic jurists that

prohibited bay al-Dayn to the third party for fear that the buyer will have a bear great

risks (Hanafi School) have some truth in it. This is especially true is there is an

absence of supervision and control. In this context the buyer’s maslaha should be

safeguarded because he is the party that has to bear the risks of acquiring the debt sale

while making the sale contract”. He also explain that the issue by referring to maslaha

by point of there is a regulatory system that protect the buyer’s maslaha in an

economic system. According to Fazlur Rahman Ebrahim (2005), suitable IBF

instruments need to be developed to meet the requirement s of more diversity for

business activities. In the global market, standardisation, harmonisation and

application of Shariah compliant products based on some general principles should be

promoted and refer to bai Inah and bai Dayn are largely attributed to be application of

contract in consumer and trade financing and need to be concerted to fully appreciate

and maximize the true potential and wisdom of Shariah.

In this context of the Islamic financing contract that use the contract of sale through

the nature of banking system, refer spirit of Maslaha and Maqasid Shariah. Maslaha

placed some conditions to the contract as essential action to achieve the objective of

Shariah from two aspect, firstly product based the contract for liquidity purpose of

financing in economy system and secondly to avoid from engaging riba.

In Malasysia the implementation of Bai’ al’Inah, Tawarruk, BBA and Murabaha and

Bai al-Dayn, should be follow particular conditions to become Islamic products in line

with Syariah compliance through Maslaha and Maqasid Shariah. Therefore, all of

them have to follow the regulatory issued from BNM as authority body and it

seriously emphasize on the development of IBF. All of arguements and improvement

of these contracts from time to time is recognized as a good Maslaha exescise.


22

3.2 A Critical Analysis of the Use and Abuse of Maslaha and Maqasid al-

Shariah in Islamic Banking and Finance

This section aims to explore the use and abuse of Maslaha in Bai al-‘Inah and

Tawarruk and the Islamic debt financing issues. It will focus on consumer debt

financing products, especially personal financing and credit card. It also explores and

examines the benefits and implications of these products from the economic

perspective.

In Malaysia the implementation of personal financing based on Bai al-Ina or al-

Tawarruk contracts that client who needs the cash will submit an application to the

bank. Once the application is approved, the bank will sell the asset to the customer at

certain amount with deffered payments within certain period, and then that customers

will sell back the asset to the bank with price lower then he bought it by cash.

Meanwhile the Tawarruk as the purchase of a commodity that is in the ownership and

possession of the seller against a deferred price. Its subsequent sale by the purchaser

to a party other than the seller on cash is for the purpose of obtaining cash, that is

warik ( Achene,2013; Resolution of the Muslim World League, Session 15, Mekkah,

31/11/1998). Dinstinguising between both contracts is Bai al-‘Inah engaging two

parties, while al-Tawarruk involving three parties but both in the same contractual

objective of IBF operation. Thus, these contracts have accepted by Shariah law due to

all of their conditions fulfilled the sale contract at the time of the contract. These

contracts have not only approved in Malaysia but extended in many Arab countries

where they also have credit card product under IBF system.

As we know, Bai al-Inah and Tawarruq have been used for customer debt financing

products. Therefore, they become important role for developing of Islamic economy

system, aimed at achieving well-being of the ummah, universal brotherhood, justice

and equitable distribution of income. The objective of Shariah also is to provide

Islamic way for activities in economy through IBF system to challenge the

conventional facilities. In fact, the conventional institutions offering consumer debt

loans which is highest demand from the people such as personal loan, card credit that

are confirmed engage with riba or interest, even in the same time, existing of the shark

loan as illegal form where marketable among the people. According to analysis of

Muftis and Shariah officers of Islamic banks by Mohd Daud, Norsazali, Mohd Kamal

Azman and Sayuti, (2013), have described that implementation of Bai’ al-‘Inah and

Tawarruk are in light of Maslaha as long as they are significant to Islamic financing

operation. The arguments of Maslaha, can be understood through serious requirement

of IBF product personal loan and card credit at necessary level from the people, if

they are not offered that the peoples will get them from the conventional bank.

According to Fazlur Rahman Ebrahim, (2005), the creation of a bigger market in this

industry is extremely important in order to ensure the growth and sustainability of

Islamic banking and finance at present and in the future. New innovations of products

would be meaningless if the market does not grow. Therefore, IBF needs to be

dynamic and proactive in meeting the needs of the Muslim community and other

communities at large to gain growing trust from them. Thus suggested that Maslaha of

Bai’ al-‘Inah and Tawarruk also can be understand from view of economy to achieve

the Maqasid in protection of people from involving of riba bank.


23

This situation also could be understood from the writing of Achene, (2013), said,

Islamic banking is linked to the economics and business activities in the real market,

Islamic banking is not mere loan extended to the client regardless whether there is

physical movement of the asset sold or bought. The Islamic bank is not a loan

provider; it is not a money lender. The Islamic bank can take different positions in the

market depending on the nature of the transaction. The Islamic bank can be a buyer or

seller in trade transaction and it can be a partner in case of musharakah etc. He added,

that the Islamic bank behaves as an enterprise in the market by taking different

positions to earn money and generate wealth. Therefore there is a link between the

Islamic banking activities and the activities of the business in the real market,

whereby any banking transaction executed in the Islamic banks has an impact on the

real economy which shows the contribution of the Islamic bank in the real economy

sector. The link between the Islamic bank activities and the real economy is one of

the key features that distinguish the Islamic banking entity from the conventional

banks. This statement really proof that IBF is very important in Islamic economy

including the Islamic debt financing that based on Bai’ al-‘Inah and Tawarruk. All the

above statement witnesses that implementation of both contracts as Maslaha in macro

aspect or macro-Maslaha.

In section 3.1 that mentioned several circumstances of these contracts in light of

Maslaha. They are addressing to serious demand from the people’s need of financing.

Maslaha also regarded to the Islamic bank which have to come up with varieties of

products to fulfil the need of the societies. In case of Malaysia for example offer a

dual banking system where conventional banks provide various products and services

that Islamic banking facilities also have to come out the innovative products in the

competition within in banking industry and aimed to capture a sizable market share.

On the other hand, IBF has to strive in offering the demand product at least on par

with products offered by the conventional banking system. The product of Islamic

debt financing is considered as the demand product in Malaysia.

The analysis by Mohd Daud, Norsazali, Mohd Kamal Azman and Sayuti, (2013)

conducted through interviews with some of the Mufti and Executive officers of

Islamic Banking, has also explained the abuse of Maslaha in implementation of these

contracts. However all of respondents in stand that Bai’ al-‘Inah and Tawarruk have

applied in light of Maslaha as long as it is needed in Islamic financing. It also

concluded using of Bai’ al-Inah should be restricted in products are difficult to be

structured with monitoring accordingly. Understanding of this point that Shariah has

granted Bai’ al’Inah and Tawarruk to operate in underlying of Maslaha, but the

application has to follow requirements or conditions have outlined by the authority

bodies for example in Malaysia is the authority entity is BNM. BNM has determined

some regulatory such as the asset should be used for the contract must relatively with

the price of sale and also the implementation of sale contract and buy-back contract

must be separated. If there are acts of ignorance of these conditions so that are

considered abuse of Maslaha. The mistake actions due to the error in implementation

of both of the contracts would be arises issue is about the intention of the transaction

like a loan contract and is considred as unlawful. When the violation of conditions

occurred that considered as abuse of Maslaha. This situation also will proof that the

intention of contract of Bai’ al-‘Inah and al-Tawarruk as simply a loan agreement and

the arguement of trick or Helah that cause of riba considartion become more relative


24

in this case. The abuse of Maslaha can be understood from several factors such as lack

of understanding among the staff about Islamic banking concept and it’s implication

in Islamic law such as ignorence the separating exercise of one contract to another

contract in Bai al-‘Inah agreement become invalid performing of contracts refer to

Shariah compliant, unclear of the al-Qabd exercise, unclear of the value of asset to the

price of sale and so forth. All of the errors practice considered as abuse of Maslaha in

Bai’ al-‘Inah and Tawarruk contract. Thus all of those who responsible to practice the

Bai’ al-Inah and Tawarruk must be good understanding in IBF concept for away of

breaching where might be cause these contracts invalid.

This paper also will highlight the current issues of IBF regarding the use and abuse of

Maslaha. Maslaha should be ensuring the people to achieve the well-being or

prosperity and harmonies in the life as the Maqasid. If the product leads to the

destruction and chaos, of course that is considered as abuse of Maslaha in this case

due to the negative result which is contrary with Shariah objective. However, in

Malaysia Bai’ al-‘Inah and Tawarruk contract have been approved based on Maslaha

to establish various debts financing for consumers. The question is how harmonise the

peoples with the offer of Islamic debt financing whether they are success of failure in

their life. The purpose of Maslaha should be make the peoples to the better

circumstance compare to the absent of the contract as the above previous arguments.

Unfortunately refer to analysis and studies by MK Azman, M Daud & Atikullah

(2012), indicated that the issues of debt in Malaysia considered the social failure. This

is debt issues has become more negative effect in increasing of bankruptcy among the

peoples. The paper also reported is increasing number of bankruptcy cases in

Malaysia among young people which in 2009 total of 1,086 public servants had been

declared bankrupt by the Insolvency Department. The statement also relate the greatly

affects with the attractions and promotion of financial institutions that offer debt

financing scheme which has influenced the society being trapped into the midst of

serious debt. They added also in 2010, the Malaysian community household debt is

the highest in Asia increased by 76.7% of Gross Domestic Product (GDP) from the

year 2009 and it increased in 2011 with the increasing by 5% from 2010. The latest

report case of bankruptcy in Malaysia in 2012 that total of 19,575 public servants had

been declared bankrupt by the Insolvency Department. While from January to

September 2013 the total of bankruptcy is 16,306, (http://www.sinarharian.com.my).

This effect will contribute to the debt payment problems in the community. When the

debt is not paid, bankruptcy cases will increase. The seriously case of indebtedness

has been damaging the public service image in Malaysia.

Based on three tables at the appendix are significant of this study that table 1

illustrated that the level of the consumer durable (debt-based) at in highest level out of

others financing (asset-based) in financial industry has been very dangerous situation.

While in table 2, indicated the sum of BIMB Islamic financing of household sector in

2010 achieved 75.8%. The situation also reported on 30 october 2013, Malaysia,

Thailand, Singapore, and Korea have the highest household debt in Asia, according to

the report, with banks in Malaysia and Thailand deemed the most vulnerable to non-

performing loans in the household segment (http://www.sinarharian.com.my). Lastly

based on, table 3 showed that Bai’ al’Inah contract of BIMB (2010) contributed

13.64%, while BBA 50.55% and al-Tawarruq contract acquire 20.95%, which the

consumer Islamic debt financing become the biggest percentage of financing segment.

http://www.sinarharian.com.my/



25

When we compare this report to the previous analysis of bankruptcy issue there are

very significant. The issues also including the Islamic banks as reported on 9 july

2013, Malaysia's household debt-to-GDP ratio rose to 82.9% in March 2013 from

76.6% in 2011. Some 80% of household debt was issued by commercial banks and

Islamic banks (http://www.sinarharian.com.my). All of the reports become a relevant

evident to what Asutay meant in his analysis with mention as the ‘social failure’ of

IBFIs into his words sound that these new products, as the controversy around

Tawarruq and sukuk as well as other Islamic derivatives and futures indicates, are

constructed by compromising the value system of IBF. The result, therefore, has been

the financialisation of IBF, which as a principle was considered detrimental to a

robust economy by IME. Thus, the particular and pragmatist path followed has

resulted in internalising ‘fiancialisation’ as an essential part of IBF, which runs

against the aspirations and values of IME and IBF. In a recent study by Asutay and

Aksak [2011], the performance of IBFI indices were examined for a number of cases

and compared to conventional finance, a direct correlation between the performance

of both the financial sectors is established, and it is argued with evidence that IBF

does not necessarily bring stability to the financial system. It is assumed by the IME

that IBF should provide stability to the financial system and should also be a moral

compass for capitalism [Asutay 2007a, 2008].

In this case about the regarded issues, Malaysia’s Centre Bank (BNM), has issued the

order of limiting the tenure for personal loans to ten years compare to twenty years

previously as reported on July 5, 2013. BNM had implemented a set of measures

aimed at avoiding excessive household indebtedness and to reinforce responsible

lending practices by key credit providers. These included a 10-year cap on the tenure

for personal loans, a 35-year limit on both housing and non-residential property loans,

as well as a prohibition on pre-approved personal financing products. (Posted on 21

August 2013 - 10:16pm, http://www.thesundaily.my/news). According to Akram

Laldin, regarding to this issue, BNM has outlined the instruction of limitation for

personal financing to 10 years as a Maqasid effort.( Akram Laldin, 2014). With the

implementation of the scheme it overcomes issues related to Non-performance

loans/financings (NPLs) and achieve Maqasid for both finance institution and client.

But in additional of abuse of this application, that is understood from the general

observation show a lot of peoples who applies the loan not for necessary situation as

its define as Maqasid but most of them for purpose to buy something better than what

they has belonging before such as buy a new car and the same time his old car still

good for used. This situation will become reality if proper investigation is not carried

out. The management of needs purchasing can be properly conducted when it can

distinguish between different needs. The needs purchase should be referring to the

real needs. Besides that, a Muslim should be able to differentiate their own needs and

the enjoying of life. This is important as there are many cases that about Muslim that

too extravagant in expending. Islam forbid the ummah to be excessive or wasting as

mentioned by Allah: “Those who are excessive (in expending) is a family to evil

whereas evil creature that is very disobedient toward its gods.(al-Isra’:27)

All of the above opinions and arguments are considered as the understanding of the

Maslaha and Maqasid. It is also aim to achieve the wisdom (hikmah) in Islamic

jurisprudence. But the appearance of increasing of the debt issues among people

including Islamic bank’s customer especially in Malaysia that require the reviewing


http://www.thesundaily.my/news/


26

the stand of Maslaha and Maqasid on this issues. It should be taken seriously with

good understanding of the concepts and the reality accordingly. With the spirit of

Maslaha and Maqasid as the methods of Islamic jurisprudence, it could meet the good

solution in which to build the Islamic wealth through the good understanding of

individuals and good management of Islamic banking institutions.

4. Recommendation

Based on the analyses discussed above, this paper will now provide some suggestions

to overcome the issues of Islamic banking operations in Malaysia. Below are the

suggestions:

i. The issues of the increasing number of bankruptcies and consumer debt

financing among the people have put them in a dangerous situation. This paper

aims to provide opinions in the spirit of Maslaha and Maqasid. If these

products are still affecting the bankruptcy issues, then the terms and conditions

of these contracts are in a vulnerable position due to the lenient approval

process. BNM needs to take additional measures to tighten the contracts’

terms and conditions. If the same issues persists, then Islamic banking

institutions, with good strategies, have to gradually stop offering personal

financing based on these contracts to remove the negative culture of debt. It

could be replaced with a new innovative contract as a solution such as al-Rahn

which requires personal liability and collaterals. This does not mean that we

reject Bai’ al-‘Inah and Tawarruq contracts but both contracts are only used in

a manner to fulfil the liquidity requirement of IBF operations when necessary.

It is not to encourage debt culture among the people. To achieve Maqasid al-

Shariah, the government can educate the people about the true meaning of

wealth from an Islamic view through education institutions.

ii. The IBF institutions have to introduce new innovative debt financing proucts

to meet consumers’ need for special method of financing. Most Malaysians in

general need two important items; a house and a car as basic life necessities.

Al-Musharakah principle can be used to establish a new suitable product with

particular conditions for home and vehicle financing. This effort can reduce

the number of consumers applying for personal loans. In a different case, some

entrepreneurs use personal financing/loan to finance their business capital

where their application for commercial loans fail. The business then ends up in

a failure due to the low limit of personal financing. Therefore, IBF institutions

should offer more business financing products that are based on Muamalat

principles because there is a good potential in the trade sector for financing as

an investment effort. Understanding Maslaha, IBF institutions should focus

their funds in financing the trade sector rather than consumer debt financing in

expanding Islamic wealth. It can also enhance the liquidity performance of

IBF institutions.

iii. The education institutions in Malaysia should equip the people with

knowledge on how to manage their finance and inculcate the Maslaha and

Maqasid al-Shariah concepts to increase their understanding of IBF.

According to Kamali, (2008), educating the individual (tahdhib al-fard) is

another important objective of the Shariah so much so that it comes, in order


27

of priority, even before justice and Maslaha. For these are both socially-

oriented values which acquire much of their meaning in the context of social

relations, whereas tahdhib al-fard seeks to make every individual a trustworthy

agent and a carrier of the values of the Shariah, and it is through educating the

individual that the Shariah seeks to realise most of its social objectives.

Therefore, in order to achieve the Maqasid al-Shariah through Maslaha, every

man must have a high level of sacrifice. He should know which one to

sacrifice according to the importance in order to obtain something bigger in

return. The definition of needs is something that must be understood to a

certain extent in order to achieve harmony or otherwise. Need is something

that must be provided whereas ‘demand’ or ‘desire’ is something

supplementary to the needs which will increase the level of satisfaction.

However, when we do not meet our desires it will cause us to feel less

satisfied. We can distinguish between desire and needs based on its function.

Something that we call desire will act as a supplement to the main function of

needs but satisfying our need is imperative. Islam does not like extravagance.

Those who live in extravagance and wastage are considered as friends of evil

and injustice. Therefore through the education system, consumers can enhance

their understanding of Maslaha and Maqasid for financing purposes. It should

strive to explain to the consumers the meaning behind the three categories of

needs in building wealth from an Islamic perspective. Consumers must be

reminded that debt is only allowed to finance need and necessities and not for

luxury purposes. If the debt taken leads people to a negative way of life, then

an abuse of Maslaha has occurred. Maqasid al-Shariah should prevent unfair

redistribution and damage of wealth as Dusuki (2011) has said – while Shariah

takes full account of people’s right to acquire, use and enjoy their property and

the corresponding benefits, it also emphasises the need to preserve the

property from being damaged and exposed to any form of harm. Thus, the

education strategy can solve this problem with the support from the

government.

5. Conclusion

To understand Islamic banking and finance operations in light of the Shariah law

through Maslaha and Maqasid al-Shariah requires not only fiqhiyyah knowledge, but

also the understanding of the reality of economy itself. The Maslaha method means

the protection of Masalih (plural of Maslaha/benefit) and prevention of Mafasid

(plural of Mafsada/corruptive). Therefore, the use of Maslaha and Maqasid al-Shariah

concepts in IBF products is due to the financial system’s needs from an economic

aspect. Among them are; to maintain a market discipline in the contemporary

environment, perform the liquidity purposes of the financial system and to meet

customers’ demand. The situation is identifiede as the global spread of Islamic

banking that is taking advantage of the diversity and flexibility in the Fiqh opinions to

meet the challenges of growth because generating the ummah’s wealth is also

considered Maslaha-oriented. Meanwhile, there is an understanding of Maslaha and

its association to the comprehensive analysis regarding Bai’ al-‘Inah and al-Tawarruk

contracts which offer Islamic debt financing products such as personal loans and

credit card facility. However, the issue of increasing number of bankruptcy filed and

household debt financing due to the abuse of Maslaha and Maqasid concepts are


28

reported to be of the highest level. Therefore the study believes that some suggestions

have to be implemented to achieve equilibrium and justice for the people by

understanding both concepts where Islam is able in all times and places. Regarding

these issues, it is suggested that the terms and conditions of personal loans must be

tightened, and more innovative products should be introduced for personal financing

such as al-Rahn. This will thus establish various ways of Islamic financing for

businesses and simultaneously educate the people about Masalaha and Maqasid in

order to enhance the understanding of their financial needs. It is also suggested that

the ethical management among the staff members of IBF be improved and taken

seriously. The implementation of Maslaha is not only to meet the financial needs but

also to ensure that individual and economic status remain under the protection of

Masalih and away from Mafasid. On the other hand, Maqasid al-Shariah is to ensure

the IBF institutions are able to sustain their products and services in the competitive

financial market while meeting customers’ requirements with the responsibility of

tahdhib al-fard in achieving the equilibrium and justice in life. Education plays a very

important role in improving people’s ability to make informed decision when

obtaining debt financing facility based on Maslaha and Maqasid without being

influenced by common debt culture. Finally, IBF institutions should apply a

monitoring system that promotes transparency and accountability with a good policy

and support from the government.

References

Al-Quran

Ahcene Lahsasna, 2013, Maqasid Al-Shariah in Islamic Finance, Kuala Lumpur:

IBFIM

Ahmad Zaini Othman. 2006, Isu-Isu Dalam Penggunaan Bai al-Inah & Tawarruq :

Perspektif Industri. Dalam Muzakarah Cendikiawan Syariah Nusantara, 2006

Akram Laldin, 2014, Role of Shariah Research for Developing Islamic Finance, Sixth

Foudation of Islamic Conference 2014, 2-3 April 2014, Durham University,

United Kingdom.

Asutay, 2012, Conceptualising and Locating the Social Failure of Islamic Finance:

Aspirations of Islamic Moral Economy vs the Realities of Islamic Finance, Asian

and African Area Studies

‘Abas Husni Muhammad (Dr), 1983, Al-Isytirat LiMaslaha al-Ghair Fi al-Fiqh

al_islami Wa al-Qanun al-Muqarin, Saudi: Syarikat Maktabat ‘Ukaz Linnasyar

Wa al-Tauzi’.

Dusuki, A. W., Abdullah, N. I.,2007, The American Journal of Islamic Maqasid Al-

Shari’ah, Maslahah and Corporate Social, Responsibility. Social Sciences, 24(1),

25-45 (Published by The International Institute of Islamic Thoughts (IIIT), U.S.

Dusuki and Said Bouheraoua, 2011, The Framework of Maqasid al-Shariah and It’s

Implication for Islamic Finance, in Islam and Civilisational Renewal Journal,

Volume 2, Number 2, 2011


29

Fazlur Rahman Ebrahim 2005, Toward Standardisation Of Banking Practices,

Corporate Governance And Benchmanking For Malaysia Islamic

Banks:Initiatives By The Association Of Islamic Banking Institutions Malaysia

(Aibim), in Corporate Governance An Islamic Paradigm, Editors Vaseehar

Hassan, Bala Shanmugam & Vignesen Perumal, Serdang Malaysia: UPM

Publication

Glossary, The International Journal of Banking and Finance, Volume 10 (Issue 2),

2013

http://www.sinarharian.com.my/jumlah-muflis-meningkat-manifestasi-esempitan-

252171 (accessed 22 February 2014)

http://www.thesundaily.my/news/764394 (accessed 13 April 2014)

Kamali, 2008, Maqasid Al-Shariah Made Simple, London: The Islamic Institute of

Islamic Thought

Kamali, 2011, Maqasid al-Shari'ah and Ijtihad as Instruments of Civilisational

Renewal: A Methodological Perspective, in Islam and Civilisational Renewal

Journal, Volume 2, Number 2, 2011

Kamali, Maqasid (Higher Objectives) of Shariah A summary of the book Maqasid Al-

Shariah: Made Simple" By Mohammad Hashim Kamali 5 June 2012, Summary

Published by IIIT, http://www.iais.org.my/e/index.php/events-sp-

1744003054/recent-events/460-public-lecture-prudential-guidelines-for-product-

development-in-islamic-banking-finance.html, (accessed 24 March 2014)

Majallah Majma‘ al-Fiqh al-Islami, 2003.

M.Fahim Khan & Layachi Feddad, 2005, The Growth of Islamic Financial industry:

The need for Setting Standard for Syariah Application in Corporate Governance

An Islamic Paradigm, Editors Vaseehar Hassan, Bala Shanmugam & Vignesen

Perumal, Serdang Malaysia: UPM Publication

M. Umer Chapra, 2000, The Future of Economics: As Islamic Perspective, Leicester:

The Islamic Foundation

Mohd Daud, Norsazali, Mohd Kamal Azman and Sayuti, 2013, Pelaksanaan Bai' al-

‘Inah Dalam Sistem Perbankan Islam Di Malaysia: Satu Analisa Pandangan

Pakar (Implementation of Bai’ al-’Inah in Islamic Banking system in Malaysia:

An analysis among expertise), Konferensi Antarabangsa Islam Borneo (VI ), 18-

19 September 2013, Sarawak Malaysia

Mohd Kamal Azman, Mohd Daud & Atikullah, 2012, Comparison of Understanding

Islamic Debt Concept Among Academic and Administrative Staff at Universiti

Teknologi Mara (UITM), Malaysia, USA: International Journal of Business and

management studies

Saiful Azhar 1999, International Journal Of Islamic Financial Services, vol 1, no 2,

http://www.sinarharian.com.my/jumlah-muflis-meningkat-manifestasi-esempitan-252171

http://www.sinarharian.com.my/jumlah-muflis-meningkat-manifestasi-esempitan-252171

http://www.thesundaily.my/news/764394

http://www.iais.org.my/e/index.php/events-sp-1744003054/recent-events/460-public-lecture-prudential-guidelines-for-product-development-in-islamic-banking-finance.html




30

Tawfique Al-Mubarak & Dr. Noor Mohammad Osmani, 2012, Applications Of

Maqasid Al-Shari’ah And Maslahah In Islamic Banking Practices: An Analysis,

http://irep.iium.edu.my/4251/1/Applications_of_Maqasid_Shari%60ah.pdf

(accessed 28 November 2013)

Wahbah Zuhaili, 1997, Al-Quran Perlaksanaan Hukum dan Peradaban Manusia

(Quran in Implementation of Islamic Law and Human Civilization), Selangor:

ALBAZ Publication

Wan Azhar Wan Ahmad, 2003, Public Interests In Islamic Jurisprudence An Analysis

of The Concept in The Shafi’I School, Kuala Lumpur, Malaysia: IIUM

Yusuf Qardhawi, 1990, al-Madkhal li Dirasat al-Syariah al-Islamiyyah, Cairo:

Maktabah Wahbah

Zaharudin, 2006, Published on NST Business Times on 21st June,

http://zaharuddin.net/senarai-lengkap-artikel/38/58--ruling-on-debt-trading-in-

shariah.html (accessed 22 Mei 2014)

http://irep.iium.edu.my/4251/1/Applications_of_Maqasid_Shari%60ah.pdf

http://zaharuddin.net/senarai-lengkap-artikel/38/58--ruling-on-debt-trading-in-shariah.html

http://zaharuddin.net/senarai-lengkap-artikel/38/58--ruling-on-debt-trading-in-shariah.html


31

Appendix 1

Table 1

Financing Breakdown Of Islamic Banks And Industry Formation

Models of Islamic Finance Industry Formation Mehmet Asutay21-23 December 2013,

Kizilcahamam, Ankara, BDDK Workshop 2013

Table 2

Islamic Finance Realities: Industries Financed Islamic financing methods in 2010

for selected banks

Models of Islamic Finance Industry Formation Mehmet Asutay21-23 December

2013,Kizilcahamam, Ankara, BDDK Workshop 2013


32

Appendix 2

Table 3

Islamic Finance Realities: Debt Over Assetbased/Backed Financing

Islamic Financing Methods In 2010 For Selected Banks

Models of Islamic Finance Industry Formation Mehmet Asutay21-23 December 2013,

Kizilcahamam, Ankara, BDDK Workshop 2013.

Documents

Understanding of Maslaha and Maqasid al-Shariah …ukmsyariah.org/terbitan/wp-content/uploads/2015/10/02-Mohd-Daud... · International Conference of Global Islamic Studies 2014 12