The Importance of Shari’ah Screening in Islamic Bank: An Islamic Jurisprudence Analysis
1Mohammad Qutaiba, 2Muhammad Usama
1,2Institute of Islamic Banking & Finance (IiiBF), International Islamic University Malaysia
https://doi.org/10.47191/jefms/v7-i12-02ABSTRACT:
Islamic Banking and Finance (IBF) is a rapidly growing industry worldwide. Islamic finance (IBF) is a financial system based on Islamic law (Shari’ah). The fundamental principle of IBF is to comply with Islamic law, known as Shari’ah. Shari’ah prohibits the charging or paying interest and investment in activities considered harmful or risky. Shari’ah screening is the process of identifying companies that comply with Shari’ah law. This is to ensure that their investments are in accordance with Shari’ah principles which prohibit the elements of riba, maysir and gharar. Shari’ah screening is an essential aspect of IBF as it ensures that all financial transactions and products comply with Shari’ah’s principles. This is important for investors who want to invest in IBF products and services. This paper provides an overview of Shari’ah screening and its importance in IBF. It also discusses the different methods that are used to conduct Shari’ah screening. This paper also aims to provide an Islamic jurisprudence analysis of the importance of Shari’ah screening in IBF. The paper concludes by arguing that Shari’ah screening is an essential part of IBF and helps ensure that IBF products and services comply with Shari’ah law. The objective of this paper is to discuss the importance of Shari’ah screening in the context of Islamic banking and finance and Islamic jurisprudence also a new screening methodology in comparison with the previous methodology. This paper has used information that has been derived from research papers, journal articles as well as official authentic websites and annual reports to provide an ideology about shariah screening in methodologies.
KEYWORDS:
Islamic finance, Shari’ah screening, Islamic jurisprudence, interest, investment.
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