Appraisal on End Products and Services Offered by Islamic Banks from Maqasid Shari’ah Perspective
Question arises whether the products and services offered by the Islamic financial institutions (IFIs) genuinely meeting the requirement of Shari’ah. At present, not only Shari’ah advisors have been appointed to scrutinize and endorse the new products and services. In fact, majority of the IFIs have established units or departments to ensure the documentations, legal and Shari’ah framework, the process and procedure, and implementation are in line with the precept of Shari’ah. IFIs not only must avoid riba, but as well as other important elements such as gharar, deception, inequality, duress in developing and executing the end products of IFIs in order to ensure justice and social welfare prevail. This could only be achieved if the products and services approved uphold the importance of Maqasid Shari’ah. This paper will evaluate the key value chain in product approval process, role of Shari’ah advisor in approving products and services in IFIs as well as to raise possible issues and challenges related to the value chain. This paper will also look into the importance of Maqasid Shari’ah in product approval process as it is a vital element to be considered so as to avoid legal conflicts, litigation risk, instability (reputational risk) to the IFIs, tarnish the image of so called Shari’ah compliance products, uphold justice (contracting parties) and more importantly the pure teaching of Islam.
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- Abbas Mirakhor & Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 91/88, International Monetary Fund.
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