Understanding the concept of Maslahah and its parameters when used in financial transactions

The consideration of public interest represents one of the promising bases of the Shariah for addressing the needs of Muslim society at large. The Shariah has given consideration to maslahah as a source of law in order to accommodate natural development and social changes and needs. However, maÎlaÍah should be addressed in ijtihad within particular Shariah standards and parameters to ensure that the exercise of ijtihad is conducted in a sound manner without contradicting the norms and principles of the Shariah. As is known, maÎlaÍah is one of the secondary sources of the Shariah that is widely recognised by scholars in issuing fatwa 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 fatwa and resolutions based on maÎlaÍah is preserving the interests of the public. The objective of enacting Shariah rules based on maÎlaÍah is to achieve fairness and justice by achieving benefits and removing hardships. In the context of Islamic finance, ijtihad 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 maslahah and examining the relationship between maslahah and maqasid. It then looks at the basis for consideration of maslahah in the Qur’an and Sunnah and examines jurists’ views on it. This is followed by a discussion of the parameters of maslahah and contemporary applications of maslahah in financial transactions, and, finally, the conclusion.