PowerPoint Presentation

ISLAMIC BANKING AND FINANCECOMPLIANCE TO THE SCHEME OF SHARIAH LAWS

CONTENTSSOURCES OF SHARIAH LAWSPRINCIPLES GOVERNING OF ISLAMIC BANKINGETHICS IN ISLAMIC FINANCIAL SYSTEM2SOURCES OF SHARIAH LAWS3razizi.uitm.edu.myAL-QURANThe fundamental and main sources of Islamic Law from which all other sources derive their authorityal-Quran may be defined as:The book containing the speech of Allah, revealed to Prophet Muhammad in Arabic and transmitted to us by continuous testimony, or tawatir.Consists of the word of Allah SWT revealed on Prophet Muhammad saw in 23 years divine originAddress to all humanity, without distinction of race, region or timeIt seeks to guide human beings in all aspect of life

4THE SUNNAHSunnah Literally: a way or rule or manner of actingTechnically: What has been (authentically) related to us on behalf of the Prophet { } from his sayings, actions, and tacit approvals. HadithLiterally: communication, story, conversation Technically: What was transmitted on the authority of the Prophet{ },his deeds, sayings, and tacit approvals, or description of his sifaat (features).Both cover the same ground: practice, sayings and tacit approvals(taqrir)Quran generally deals with the broad principles or essential of religion. The details are supplied by Prophet saw through hadith

5IJMAIjma Consensus of opinion among the jurist on certain issues and rulingLiterally:Ijma is the verbal noun of the Arabic word Ajmaa which has two meanings: To determine To agree upon somethingTechnicallyConsensus of mujtahids (jurist) from the ummah oh Muhammad (saw), after his death in a determined period upon a rule of Islamic lawConsensus of opinion among the jurist of a particular period on a question of lawIjma maybe based on Quran, hadith or analogy

6QIYASQiyas analogical deductionLiteralMeasuring or estimating on thing in terms of anotherTechnicalThe extension of Shariah ruling from an original case (Asl) to a new case (far) because the new case has the same effective cause (Illah) as the original case.Qiyas or analogy is resorted to in respect of problems about which there is no specific provision in the Quran or the Sunnah of the ProphetAnalogical deduction of new issues on existing evidence from the Quran and SunnahProcess by which a rule of law is deduced from original text in views of common effective cause (illah)

7SECONDARY SOURCES OF SHARIAH LAW8PRINCIPLES GOVERNING OF ISLAMIC BANKING9AQIDAH (FAITH & BELIEF)Firm belief in the heart and must be applied into actionsThe belief in God, the belief in Prophets, The Angels, The Books, The Hereafter and The Divine Decree

10SHARIAH (PRACTICES & ACTIVITIES)The original meaning of word shariah is the path or the road leading to the water.In legal term sharaa means to make or establish laws.In legal term means laws relating to all aspects of human life established by Allah SWT for his servants. Laws relating to human life are divided into three: Those relating to beliefThose relating to deeds Those relating to ethicsIt is the responsible of the Muslim to knows the rules of Allah such as rules related with: Man relationship with God like worship (ibadah)Man relationship with other fellow-human like rules of marriage (Munakahat), criminal law(jinayah), business (Muamalat), politics (Siyasah), international law and others.

11razizi.uitm.edu.myOBJECTIVES OF SHARIAH12AKHLAQ (MORALITIES & ETHICS)Covers all aspects of Muslim behavior , attitudes and work ethics with which he perform his practical action:Moralities and ethicsBehavior ThinkingThe process of judgement

13IBADAH (WORSHIP)Ibadah (worship) is actually the main purpose of the creation of man on earth.Allah mentions in the Holy Quran : I created the jinn and humankind only that they might worship me (51:56)To serve Allah is not only through the devotional acts of prayer, fasting, payment of zakat and pilgrimage.The Muslim serve Him through all their good actions whether for worldly life or heavenly purposes. 14IBADAH (WORSHIP)Definition of ibadah Total submission and obedient physically and mentally based on a belief that the one whom is worshipped almighty honor and power that will induce the feeling of degradation and affection.Concept of ibadahCovered all human activities physically and spirituallyCovered all worldly and Hereafter affairs Main condition - sincere oneself in performingThe grouping of ibadahSpecific:-In time, place, conditionally, directionally and with specific actions-prayer-fasting-pay the tithe/zakat-perform the pilgrimageGeneral :-individual, society, leadership, the whole life15MUAMALATMuamalah is from the verb aamala literally meaning to interact.Muamalat means interactions or transaction.Commercial transactions Through contracts which are permitted by the Shariah as evidenced by the Quran, the Sunnah and other sources of Islamic law.Characteristics of muamalahFree from riba Comply with (objectives of) shariahDevoid of gharar (uncertainty, indeterminacy)Free from qimar (gambling) Free from maysir (games of chance)Free from ghishsh (fraud)Free from khibalah (cheating)Entitlement to profit depends on liability for riskContracts based on free mutual consent16ETHICS IN ISLAMIC FINANCIAL SYSTEM17END OF CHAPTER18