Examining Maqasid Al-shariah in Islamic Banks: Before and after Value-Based Intermediation Implementation

Abstract

VBI initiative stemmed from BNM or the Central Bank of Malaysia's observation that maqasid al-Shariah (the objectives of Shariah) was not fully being implemented in Islamic banks since 1993. However, some Islamic banks have claimed that even before the idea of VBI was brought forward by BNM, maqasid al-Shariah had already been existent in their banking operations. This study aims to compare the practice of some Islamic banks in realizaing maqasid al-Shariah through their available products and services before and after VBI implementation. This study adopts a qualitative research methodology whereby the information on VBI implementation was gained from semi-structured interviews conducted with bankers from three Islamic banks in Malaysia directly involved with VBI implementation. This study has found that maqasid al-Shariah had indeed been realized by Islamic banks even before the implementation of VBI. However, this VBI initiative was a boost in assisting Islamic banks to structuralize their efforts in achieving maqasid al-Shariah and help strategize their initiatives through practices, the business conducts and offerings of their products and services. As a result, Islamic banks can generate a positive and sustainable impact on the economy, community, and environment, consistnet with the shareholders' sustainable returns and long-term interest and achieving maqasid al-Shariah. Future research should involve all Islamic banks which practice VBI in their banking operation.