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Appraisal on End Products and Services Offered by Islamic Banks from Maqasid Shari’ah Perspective


  • Eddy Yusof, Ezry Fahmy
  • Kan, Zusuff


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.

Suggested Citation

  • Eddy Yusof, Ezry Fahmy & Kan, Zusuff, 2010. "Appraisal on End Products and Services Offered by Islamic Banks from Maqasid Shari’ah Perspective," MPRA Paper 25683, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25683

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    References listed on IDEAS

    1. Mr. Abbas Mirakhor & Mr. Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 1991/088, International Monetary Fund.
    2. Mehmet Asutay, 2007. "Conceptualisation Of The Second Best Solution In Overcoming The Social Failure Of Islamic Banking And Finance: Examining The Overpowering Of Homoislamicus By Homoeconomicus," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 15(2), pages 167-176, December.
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    Cited by:

    1. Ngalim, Siti Manisah & Ismail, Abdul Ghafar, 2015. "An Islamic Vision Development Based Indicators in Analysing the Islamic Banks Performance: Evidence from Malaysia, Indonesia and selected GCC Countries," Working Papers 1436-2, The Islamic Research and Teaching Institute (IRTI).

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    More about this item


    Islamic financial institutions; Shari’ah committee; Maqasid Shari’ah.;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • D20 - Microeconomics - - Production and Organizations - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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