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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
SHA0011

UNIT 5: INSIGHT OF THE SHARĪ’AH ASPECT IN THE IMPLEMENTATION
OF ISLAMIC BANKING

Value propositions of Islamic banking and finance is evident in the following
perspectives:

1. Economy
2. Social
3. Environment

1. Economic Perspective

Islamic banking seeks to achieve an economic prosperity (well-being)
underpinned by sustainable wealth creation and transfer. It is achieved
primarily by adhering to the following key principles:

• Stable
• Transparent
• Sharing of profit loss (Mushārakah)
• Sharing of profit (Muḍārabah/Musāqah)
• Asset based system
• Avoid manipulation
• Avoid ribā
• Avoid gharar
• Avoid excess leverage
• Real economic activities

2. Social Perspective

Economic activities shall be conjunctively executed and operated in
the light of social consideration. The well-being is insufficiently
achieved by solely relying on economic gain in term of dollar
and cents, instead it shall be tied up with social well-being that inter
alia requires avoidance of harmful and detrimental activities which
in cludes:

• Prostitutions
• Pornography
• Cruelty
• Interest based
• Drug
• Weapon of mass destruction
• Production of liquor
• Tobacco

3. Environment Perspective

Qur’ān in unequivocal term cautioned that the mischief on the
world is attributed to human conduct.