Shari'ah Principles

Shari’ah principles are the foundation of the practice of Islamic finance through the observance of the tenets, conditions and principles espoused by the Shari’ah. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Sources of Islamic Law

Primary Sources (Quran & Sunnah): Qur'an is the primary source of the Shari'ah upon which all othe sources founded their authority. Literally, the word Qur'an is derived from the Arabic root word, qara'a which means to read or to recite. The Qur'an is a verbal noun and hence, it means the act of reading or recitation. Technically, the Qur'an is the speech of Allah, revealed to the Prophet Muhammad (p.b.u.h.) in its precise meaning and wording, and transmitted to us by way of tawatur, both verbally and in writing. It is inimitable and unique in its style. To sustain these special attributes, it is protected by God from any corruption. 

Resolution No. 117(11/12): "Establishment of an Islamic Organization for the Holy Quran "
Resolution No. 116(10/12): "Translation of the Holy Quran"
SETTING TRADERS’ PROFITS by Dr Yūsuf al-Qaraḍāwī
تمويل مشروع استثماري يستعمل إنتاجه في المحرمات
كتابة الآيات القرآنية في دفتر الادخار
Trading in Meat Imported from Non-Muslim Lands
What is the Riba That the Qur’an Forbids?
Is There Any Shari‘ah Limit to a Seller’s Profits?
Transliterating the Qur’an in Another Alphabet

The third source of Islamic law is ijma'; it is a secondary source of Islamic law. Others secondary sources include 'Urf, Qiyas etc. Unlike the Qur'an and the Sunnah, ijma' does not directly partake in the divine revelation. As a principle and evidence of Islamic law, ijma' is a rational evidence and binding proof. Literally, ijma' is the verbal noun of the Arabic word ajma'a which means, "to determine and to agree upon something". Technically, ijma' is defined by Al-'Amidi as the unanimous agreement of the mujtahidin of the Muslim community of any period following the demise of Prophet Muhammad (p.b.u.h) on any matter. This definition includes the agreement on all matters pertaining to Islam whether they are in relation to belief or moral, or legal matters

The fourth principal source of Islamic law as agreed by scholars to be a rational tool for deducing the ruling of fiqh is qiyas (analogical reasoning). Literally, qiyas means, "measuring or ascertaining the length, weight or quality of something". Technically, it is defined as the extension of a Shari'ah value from the original case, or asl, to a new case, because the latter has the same effective cause ('illah) as the former. The original case is ruled by the text either from Qur'an or Sunnah and qiyas aims to extend the same ruling to the new case based on the shared 'illah. Being an extention of the existing law. qiyas discovers and develops the existing law but does not create a new law. In fact, it widens the application of law contained in the text.

Can an Islamic Bank Take a Deposit in a Conventional Bank as Security for a Loan?

The word istihsan literally means, “to approve or to deem something preferable, to consider something as good”. Technically, as defined by al-Kharkhi, istihsan is a legal principle which authorises departure from an established precedent in favour of a different ruling for a reason stronger than the one which is obtained in that precedent. Thus, the essence of istihsan is to formulate a decision which sets aside an established analogical reasoning for a reason justifying such a departure and seeks to uphold a higher value in the Shari’ah. The principle of istihsan was approved by Hanafi, Maliki and Hanbali scholars but disapproved by Shafi’i scholars as it is regarded as being too independent from the Qur’an, Sunnah and ijma’. For further details see: ISRA, Islamic Financial System; Principles and Operations

Can the Intermediate Seller Appoint a Supplier as Its Agent for Some Murabahah Procedures?

Istishab literally means, “companionship”. Technically, istishab indicates the facts, or rules of law and reason, whose existence or non existence had been proven in the past are presumed to remain so for lack of evidence to establish any change. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Maslahah, literally means, “benefit or interest”. When it is narrowed to maslahah mursalah, it indicates unregulated public interest in the sense of not having been regulated by the Lawmaker as no textual authority can be found on its validity or otherwise. Al-Ghazali (d. 505AH/1111CE) defined maslahah as the consideration which secures a benefit or prevents harm but is, at the same time, harmonious with the aim and objectives of the Shari’ah. These objectives consist of protecting the five essential values, namely religion, life, intellect, lineage and property. According to him, any measure which secures these values falls within the scope of maslahah and anything which contravenes them is mafsadah (evil) and preventing the latter is also maslahah. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Dollars Are Purchased at Different Prices on the Same Day; Which Price Should the Customers Be Charged?
Ibra’ Clause In Financing Agreement
Resolution No. 141 (7/15): The Issue Of Masalihu al-mursalah And Its Contemporary Applications
Is It Allowed to Use LIBOR as a Benchmark?
Third Party Guarantee for Capital and/or Profit in Mudarabah Transaction
Restructuring and Rescheduling in Islamic Financing Agreement
Hukum Penyaluran Hasil Gharamah Institusi Kewangan Islam Ke Baitulmal
Pelaburan Dalam ASN, ASB Dan Seumpamanya
Expropriated Property
Ibra’ in Islamic Financing

Sadd al-Dhara'i can be literally translated as 'blocking the means'.  Technically: It means to prohibit the legal means that can be used to achieve illegal things. Jurists say that means take the rule of the results they lead to. Some jurists say that usury by way of excess is prohibited because it leads to usury of delay. For further details see ISRA Compendium.

Can an Islamic Company Build a School for a Client Who Will Run It as a Mixed-Gender Operation?
Can a Creditor Make His Loan Conditional on the Borrower Buying from or Selling to the Creditor?
Is It Permissible to Engage in a Sale Contract on Deferred Basis with a Client Who Directly Communicated with the Producer Abroad to Send Certain Goods?
What Are the Shariah Rules Governing Letter of Credit?
Is It Allowed to Rent a Property to an Interest-Based Bank?
Murabahah to Buy Cassettes Containing Music
The First Seller Demands Earnest Money from the Purchase Undertaker
The Purchase Undertaker by Deferred Payment Wants to Sell the Good before Completing the Payments
تمويل العملاء الذين لديهم مصادر دخل مشكوك فيها
الاستثمار في أسهم الشركات التي لا تهدف إلى التعامل بالربا
Using Murabahah In Cigarette-Related Sales
Sale and Buy Back without Stipulation
Offering a Discount for Paying on Time in a Deferred Purchase Sale
Selling Human Hair to the Textile Industry
One Department of the Bank Buys a Commodity in Cash from a Customer Who Bought it by Deferred Payment from Another Department of the Bank
Selling Human Hair to the Textile Industry
One Department of the Bank Buys a Commodity in Cash from a Customer Who Bought it by Deferred Payment from Another Department of the Bank
Can a Customs Clearing Agent Charge Different Fees Based on the Value of the Goods?
After Selling a Commodity for Cash, the Seller Offers to Buy It Back at a Higher Price for Deferred Payment
Can an Islamic Bank Buy Property in a Non-Muslim Country if Some Tenants Have Shari‘ah Non-Compliant Businesses?
Can a Deposit Be Taken before the Sale if It Is Counted as Part of the Final Price?
Is It Allowed for a Member of the Board of Directors to Rent a House from the Company He Manages?
Is it Allowed to Consider the Seller as the Bank’s Agent When the Buyer Pays Using the Bank’s Credit Card?
Is it Impermissible to Separate the Money of Depositors from the Money of Shareholders?
How permissible is it to subscribe to shares of Al-Qarin Petrochemical Products Company?
Is it Lawful to Open a Documentary Credit for a Customer in Order to Import Non-Alcoholic Beer?
Is it Allowed for KFH after Selling a Car to a Customer to Transfer it by Way of One of the Local Banks to Be Paid for in Installments?

Literally: ma’ruf means benevolence. Technically: what people collectively recognize so that it becomes known [to all]. Some said: what is considered beyond doubt based on rational criteria and is accepted by unspoiled human nature. Some said: what people collectively recognize and practice regarding words and actions to either be done or avoided. Jurisprudence may or may not give a specific custom consideration. For further details see ISRA Compendium.

Gifting an Asset at the End of a Lease
Who Is Liable for Damages to Rental Property?
Accounting Arrangements for Recording Collection of Doubtful Debts
Charging a Fee to Change the Name on the Promissory Note for a Car
Is the Conventional Procedure for Dealing with Lost Checks Acceptable?
A Seller Agrees to Accept Expired Products from the Buyer and Replace Them with New Products
Is It Permissible for KFH to Charge a Certain Fee to the Customer for Changing His Name in the Promissory Note to the Name of a New Buyer He Sold the Commodity to?
What Are the Rules of Taking Possession in Currency Trading with Regard to the General Practices of Banks?
Is It Permissible to Buy Imported Goods of Defined Specifications Which Are Still at Sea and Sell Them to a Trader? And Does Ijarah Cover All Types of Goods and Commodities?
If the Manager of a New Building Doesn’t Consider Key Money Lawful, but the Owner Does
A Murabahah Sale in Which the Intermediate Seller Stipulates That the Original Seller Will not Be Paid until the End Buyer Tests It
An L.C. Application Missing Details about the Goods to Be Purchased
Can the Primary Seller Give a Performance Award to the Murabahah Buyer for Retail Sales of Its Products and Ignore the Middleman?
How to Calculate the Selling Price in Murabahah
Period Of Verification
Selling Goods Based On Its Specifications
Insurance Premium
What Expenses Can Be Factored into the Price to Which the Mark-up is Added
What if the Buyer Asks the Installer to Implement Design Changes during Installation, and Only Informs the Seller after the Fact?
A Service Warranty Agreement for a Car
Fee For Group Financing
Accepting Hibah from The Customers
Hibah In Loan (Qardh)
Resolution No.43 (5/5): Abstract Rights
Business Expenses in Musharakah based on Percentage of Capital
Resolution No. 47 (9/5): Urf (Custom)
Is Storage in Public Warehouses with Certificates Detailing the Specifications of the Commodities Considered Possession that Allows Resale?
Can an Islamic Bank Exempt Orphans from Paying Certain Standard Fees?
Can an Islamic Institution Give a Non-Muslim Employee Leave to Celebrate His/Her Religious Holiday?
Is There Any Shari‘ah Limit to a Seller’s Profits?
+ more

العائد على ودائع الاستثمار
The Issue Of The Original Ruling Of Contracts And The Permissibility Of Using Terms That Are Not Mentioned In The Sources Of Islamic Law
Can a Retailer Return Unsold Goods to the Wholesaler and Get a Full Refund?
Riba Al-Fadl: Gold For Gold

Ijtihad and Fatwa

The Islamic Development Bank inquiry regarding financing long-term infrastructure projects
Can the Bank Impose Restrictions on Withdrawals from a Current Account?
Discount For Early Payment
A Stipulation That Doesn’t Impede the Legal Implication of the Deal
Can a Bank Seek Damages from a Purchase Orderer Who Breaks His Promise to Buy?
قرار رقم 177 (3/19) بشأن دور الرقابة الشرعية في ضبط أعمال البنوك الإسلامية أهميتها ، شروطها ، طريقة عملها
قرار رقم 153 (2/17) بشأن الإفتاء: شروطه وآدابه
الاستثمار في أسهم الشركات التي لا تهدف إلى التعامل بالربا
القروض المتبادلة
Resolution No. 1 (1/2): Concerning the Zakah of Debts
The Issue Of The Original Ruling Of Contracts And The Permissibility Of Using Terms That Are Not Mentioned In The Sources Of Islamic Law
Resolution No. 181 (19/7): Regarding endowing shares, sukuk, material rights and benefits
Can a Company Partner Be an Employee of the Same Company?
What Is the Ruling on Talfiq (Picking & Choosing Fatwas from Different Schools of Thought)?
Termination of Ijarah Contract
Issuance of Bank Negara Negotiable Notes Based on Ijarah Concept
Absorption of Costs Associated with Ownership of Asset in Ijarah
Liability of Lessee over Third Party’s Asset
Lessee’s Priority to Purchase Asset in the Event of Default in Rental Payment
Surplus Sharing from Sale of Ijarah Asset between Lessor and Lessee
Surplus Sharing from Sale of Ijarah Asset between Lessor and Lessee
Utilisation of Third Party’s Asset Acquired Through Mudarabah Contract as Underlying Asset in Issuance of Sukuk Ijarah
Hukum Pewarisan Bagi Kes Kematian Serentak
What’s the Shariah Opinion Regarding the Interest Paid by Conventional Banks to Their Depositors and the Interest Charged by Them on Loans to Customers?
Ijarah Contract with Floating Rental Rate
بيع البنك عملة أجنبية لجهة ما بسعر يحدد مسبقًا
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