UNDERSTANDING THE CONCEPT OF MAØLA×AH AND ITS PARAMETERS WHEN USED IN FINANCIAL TRANSACTIONS

Abstract

The consideration of public interest represents one of the promising bases of the SharÊÑah for addressing the needs of Muslim society at large. The SharÊÑah has given consideration to maÎlaÍah as a source of law in order to accommodate natural development and social changes and needs. However, maÎlaÍah should be addressed in ijtihÉd within particular SharÊÑah standards and parameters to ensure that the exercise of ijtihÉd is conducted in a sound manner without contradicting the norms and principles of the SharÊÑah. As is known, maÎlaÍah is one of the secondary sources of the SharÊÑah that is widely recognised by scholars in issuing fatwÉ and resolutions. It represents one of the essential sources for dealing with issues and matters for which there is no explicit indication in the Qur’an or Sunnah. The ultimate objective in issuing fatwÉs and resolutions based on maÎlaÍah is preserving the interests of the public. The objective of enacting SharÊÑah rules based on maÎlaÍah is to achieve fairness and justice by achieving benefits and removing hardships. In the context of Islamic finance, ijtihÉd based on maÎlaÍah is very essential, especially for regulators and corporate governance organs, which refer to them to provide standards, parameters, regulations and policy for the benefit of the Ummah. This study is an attempt to examine the parameters within which maÎlaÍah should be used, for utilising it without proper guidelines may lead to its abuse. The study begins by defining maÎlaÍah and examining the relationship between maÎlaÍah and maqÉÎid. It then looks at the basis for consideration of maÎlaÍah in the Qur’an and Sunnah and examines jurists’ views on it. This is followed by a discussion of the parameters of maÎlaÍah and contemporary applications of maÎlaÍah in financial transactions, and, finally, the conclusion.