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Durham University Library, Stockton Road, Durham DH1 3LY, United Kingdom
Tel : +44 (0)191 334 3042 | Fax : +44 (0)191 334 2971
http://dro.dur.ac.uk
Habib Ahmed is a Professor and Sharjah Chair in Islamic Law & Finance at the
Institute of Middle Eastern & Islamic Studies, School of Government & International
Affairs, Durham University. He can be contacted at habib.ahmed@durham.ac.uk.
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Habib Ahmed
The ruling was issued by the International Council of the Fiqh Academy in its 19th
session which was held in Sharjah, United Arab Emirates during 26 30 April, 2009.
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Ahmed (2011) distinguishes between potential product space and feasible product
set. While the former includes all possible alternative modes that can be used for a
particular product, the latter represents the modes that Islamic banks can use under
the institutional and organisational constraints.
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Habib Ahmed
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Middle-class/
Medium
Affluent/ Large
Survival (Necessities)
A1
B1
C1
Security (Complementary)
A2
B2
C2
A3
B3
C3
Segments Needs
Growth (Luxuries)
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Social
Market
Needs
segment
Form
Substance
9
9
9
9
9
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IV. CONCLUSION
This note provides a framework of assessing the implementation of
the overall goals of Islamic law (maqid) at the level of products.
The maqid imply two sets of Sharah requirements, one legal
and the other social. While the former is identified by fulfillment of
form and substance of Islamic law at the contract level, the latter is
recognised by the market segments and purpose/needs served by a
product. Given these shades of Sharah requirements, three types of
Islamic financial products are identified. A Sharah-based product is
one that fulfills both the legal and social requirements. A Sharahcompliant product would be one fulfilling the legal requirements, but
not the social requirements. Finally, a pseudo-Islamic product is one
that fulfills the form but not the substance of Islamic law.
There is a belief that the SSB should be responsible for
implementing maqid in Islamic banks.4 This note, however, shows
that there are two dimensions of maqid relating to products. The
role of the SSBs is to ensure that the maqid is achieved at the
contract level by fulfilling the form and substance of Islamic law.
Among others, this would require approving Sharah-compliant
products and avoiding pseudo-Islamic products. Control of broader
social character of banking operations in terms of product and market
features lies in the hands of the BOD and senior management, not SSB.
In other words, while it is the BOD who determine whether products
are Sharah-based or Sharah-compliant, it is the responsibility of
the SSB to ensure that products are not pseudo-Islamic.
For example, Siddiqi (2006) asserts that the SSBs should oversee the fulfillment of
the overall objectives of Islamic law or maqid.
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