Foundations of Shari'ah Governance of Islamic Banks

Chapter 1The Roots, Characteristics, and Objectives of Sharī‘ah and the Islamic Economic System

Chapter Summary

This chapter examines the roots of sharī‘ah in order to provide a solid theoretical foundation that is needed for understanding Islamic jurisprudence in general and Islamic transactional law in particular. Without this minimum understanding of sharī‘ah, it would be rather difficult to discuss sharī‘ah governance. The chapter begins by defining key terms, such as sharī‘ah, the Qur’ān, sunnah, and fiqh. Next, it discusses ijtihād and the differences in juristic opinions that could result from undertaking such an activity. Thereafter, the chapter explores obligation-creating and declaratory sharī‘ah rulings and the subject of these rulings. The characteristics and objectives of sharī‘ah are investigated in order to provide a context for these rulings. Subsequently, the chapter explores the Islamic economic system and its characteristics, in addition to identifying the objectives of sharī‘ah relating to property.

1.1 Sharī‘ah, the Qur’ān, and Sunnah

Sharī‘ah¹ etymologically means the source of drinking water,² and shar‘ means to ordain.³ Muslims believe that sharī‘ah is an ethical way of life revealed by God to secure the success (falāh) of creation in this world and the next.⁴ It does so by promoting what will benefit beings and protecting against that which will harm them.⁵ God, the Divine, uses several derivatives of the word sharī‘ah when addressing His final messenger ...