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The Holistic Nature Of Islamic Finance Products Development

After centuries of practicing Western financial systems, Islamic societies around the world are welcoming Islamic finance – a relatively new field in the contemporary Muslim world. Based on
the concept of riba, Islamic finance aims to provide Muslims respite from practising riba and other prohibited elements in financial transactions. However, in spite of these eorts, it is still
a gargantuan task coming up with a holistic financial system and products that truly comply to the principles of Syariah, whilst fulfilling the needs of Muslim consumers.
In countering these challenges, the wisdom and insights of Syariah scholars are vital in making the necessary connections
and establishing a synergistic financial system that is relevant to
consumers, whilst oering Islamic bankers competitive edge in a
volatile and dynamic market environment. That’s not all, these
products and services must also be Syariah compliant.
This calls for scholars to have an in-depth understanding of
Islamic law and its context in economic and financial practices as
well as operations. The approaches taken to fully decipher the
texts and contexts have to be appropriate in order to enable
eective and accurate decision-making. There are three possible
angles or approaches that Islamic scholars may take to fully
understand the subject matter and in arriving at Syariahcompliant
decisions in Islamic finance. These approaches may be
deemed too rigid or inflexible, excessively flexible or even
moderate to a certain extent.
Rigidity and inexibility
The rigidity (al-tadyik) and inflexibility (al-tashaddud) in making
syariah decision may occur when scholars tend to impose heavy
conditions and requirements on financial practices in the
modern world. At the same time, they also tend to reject
innovation on the grounds of refraining from classical practices
or others. As a result these reservations birth new challenges
and oer no alternatives for Muslim consumers. This rigid and
inflexible approach may stem from the following reasons;
Fanatical views
Often fanaticism driving Syariah decisions related to ibadah or
mu’amalah, can pose a major stumbling block in the Muslim
world, because every scholar has a dierent perspective or view
on circumstances or issues posed to them at varying times.
Sheikh Yusuf al-Qardawiin, in his book al-Ijtihad fi al-Islam,
emphasized that “… some scholars when asked about a
particular issue related to contemporary muamalah will always
refer to a particular mazhab literature. If there are no similar
instances in these literatures, they will disallow the referred
muamalah issues on the premise these issues do not exist in the
classical literature although what originally matters in muamalah
is impermissible unless it is stipulated in the classical literatures”.
Undoubtedly, classical scholars have made tremendous eorts in
developing dierent areas of Islamic muamalah, and contemporary
scholars must refer to these works in order to further develop
fiqhal-muamalah. Having said that, it is also vital for
contemporary scholars to venture beyond the scope of the
classical ijtihadin order to further develop and enhance Islamic
financial products.

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