Maqasid-al-Shari‘ah vs. Contemporary Islamic Banking and Finance

Abdul Rafay; Saqib Farid

Abdul Rafay Department of Finance, School of Business and Economics, University of Management and Technology, Lahore, Pakistan
Saqib Farid Department of Finance, School of Business and Economics, University of Management and Technology, Lahore, Pakistan

Keywords: Islamic Banking, Maqasid-al-shari‘ah, Qur’ān, Sunnah, Pakistan, risk

Abstract

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One of the cardinal issues in Islamic banking and finance is how to reconcile the objectives of Islamic moral economy and observed current reality? The skeptics argue that Islamic banking and finance is not contributing towards the universal goals of Islamic economic system and the paradigm contains similar moral hazards
like conventional banking system. The study documents the underlying flaws and contradictions of the present-day Islamic banking with regard to maqasid-alshari‘ah. Further, the study also recommends reforms in few key areas of Islamic banking to align the goals of Islamic moral economy and contemporary Islamic banking in Pakistan.

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