Maqasid al Shariah and Stakeholders’ Wellbeing in Islamic Banks: A Proposed Framework

Abstract

The extant literature describes and justifies stakeholders' wellbeing as the essence of Islamic Banking and Finance (IBF). This infers the compulsion on Islamic banks to devise their operations based on inclusive wellbeing, and a greater perspective from the Maqasid al Shariah framework, and not merely converging on the compliance rulings. This paper presents a review and analysis of the present literature on Maqasid al Shariah and Stakeholders' wellbeing and synthesizes a framework for gauging the theoretical association between the classical Maqasid al Shariah and Stakeholders' wellbeing. The proposed framework can be used as a dependable framework for policy implication and future research in IBF. Moreover, concentrations of research efforts are identified from the present review and directions for future research are proposed.

Nexus between higher ethical objectives (Maqasid Al Shari’ah) and participatory finance

“…Shari'ah defines a system of values and ethics governing all aspects of human life including intellectual, moral, personal, economic, political, and social (Siddiqi et al, 2019;Islamic Capital Market Task Force, 2004). According to Dusuki and Abdullah (2007) the utmost objective of Shari'ah rests within the concepts of guidance and compassion, which seek to alleviate hardships, eliminate, prejudice, and establish justice by promoting mutual support and cooperation with in the society.…”

“…Numerous Islamic scholars have attempted to comprehend the objectives of Shari'ah, called the Maqasid al Shari'ah. Maqasid al Shari'ah, refers to the underlying logic or rationale for Shari'ah principles and rulings (Ashur and Al-Tahir, 2006;Siddiqi et al, 2019;Dusuki and Abozaid, 2007). In other words, it highlights the importance and benefits of using the Islamic lens in every aspect of life (Pryor, 2007).…”

“…He has classified Maqasid al Shari'ah into three subgroups namely educating the individual (Tahdhib al-Fard), establishing justice (Iqamah al-'Adl) and public Interest (al-Maslahah). Tahdhib al-Fard (Educating the individual) refers to the human's development that focuses on not only knowledge and skills but also their spiritual values (Siddiqi et al, 2019). Therefore, it can be viewed in the broader spectrum of falah (success) in this world and hereafter (Jan et al, 2018).…”

“…Hajiyyat (complements) are categorized as secondary needs or requirements of well-being of mankind (Jazil, 2013;Ashur and Al-Tahir, 2006). Individuals and society can survive without realization of these, however, these are important for the normal functionality of the various activities and functions of the society in the normal course of life (Siddiqi et al, 2019). For example, in the dominion of economic affairs, Shari'ah allows hire and lease (Ijarah) and forward buying (Salam) keeping in view needs of the society, though both of these entail certain anomaly (Dusuki and Abdullah, 2007).…”

“…Tahsiniyyat (embellishments), on the contrary, addresses the prestigious type of needs of individuals and society (Ashur and Al-Tahir, 2006) and refer to those needs that, when fulfilled, would consequently result in the perfection and refinement in the conduct and customs of society (Dusuki and Abdullah, 2007). Thus, embellishment helps to achieve the ultimate level of development and advancement, for individual and social well-being (Siddiqi et al, 2019). Some examples of Tahsiniyyat (embellishments) for ibada (worship) are, sadaqah (charity), ethical value and moral values (Lahsasna and Sulaiman, 2010;Ashur and Al-Tahir, 2006;Dusuki and Bouheraoua, 2011).…”