Discourse and Inclusion of Maqasid al-Sharī‘ah in Islamic Economics and Finance

An Analysis of Prof. M.N.Siddiqui’s Views

Abstract

Islamic economics and finance have much to owe to the efforts and writings of Prof. Mohammad Nejatullah Siddiqi (1931–2022) an economist par excellence who not only has been capable of rediscovering Islamic economic themes in context of the modern financial scenario, but also tried to present Islamic finance in accord with the Maqāsid approach. Prof. Siddiqi’s ripe scholarship, illustration, and deep insights in Islamic economics paved the way for extensive researches in the subject. His viewpoint and contribution to the subject is evolving globally including Urdu and English works, monographs, policy papers, and working/occasional hand-outs. Prof. Siddiqi asserted that banking and Islamic insurance (takāful), as components of Islamic finance, go beyond merely offering products and services that appear to comply with Shari‘ah. Instead, they must be designed and structured in a way that actively promotes the public good. This requires recognizing the importance of establishing public good over self-interests and profit maximization. It also requires looking at the harmful consequences of transactions along with the intention and actions contradicting the spirit of Islamic economics. It is this approach which can fulfil the Objectives of the Shari‘ah (Maqāsid al‑Sharī‘ah). Without all these ingredients, Islamic financial dealings will be seen as a paper exercise and the purpose seemingly no different from those of conventional financial institutions. Achieving the higher intents and objectives of the Shari‘ah requires righteous behavior and standards of moral conduct in all dealings, and for generosity in the flow of wealth as well as financial mechanism. It is implicit that individuals working in the Islamic finance industry, and more importantly those who manage Islamic financial institutions as well as those responsible for approving financial products and transactions for Shari‘ah compliance, should aspire to establish the Maqasid al‑Shari‘ah, with utmost sincerity and honesty. The Maqasid al‑Shari‘ah can only be properly realized in Islamic finance when individuals representing stakeholders, in particular the promoters, management, staff, and the Shari‘ah scholars are collectively conscious and sincerely committed to their moral obligations towards the society.