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A. General Shariah Objective in Financial Transaction 1. General Shariah objective in financial transaction 1. To enable large sectors of the population to become a part of monetary cycle of wealth. 2. To avoid the concentration of wealth in a few hands. 3. To refrain from hording and monopolization of wealth. 2. Continuity of the investment of wealth In order for a society to become prosperous, the wealth must be invested and distributed to several hands for its investment and growth. 3. Achieving comprehensive communal prosperity A. To provide the basic material needs for the whole number of the society. This objective needs to rely on the first two, i.e. the circulation of wealth and investment opportunity in the country. Islamic Bank can play the role by helping the Muslim community to build their economy through various activities such as: Facilitate and supervise the investors Become partner of certain business

4. Financial transparency This objective is to rid Islamic Finance from misuse and squander or extravagant e.g. the transparency is evidence in the contract or mudharabah and musyarakah in which both contracting parties are required to agree on the ratio of profit to be shared between them. The cost of product must also be transparent in the case of make up price system (BBA). 5. Redistribution of wealth must be equitable and justice This objective is to close the economic gap among community members.

6. Objective of consumption and expenditures Hierarchy of needs Basic goods Normal goods Luxurious goods Giffen or inferior goods 7. Syariah objectives of welfare approach The concept of welfare in Islam is based on the spiritual and material aspects of life so that they may serve as a source of mutual strength and as the formulation of true human welfare and happiness. In this regard, the holy Quran and Sunnah leads us to basic principles of the economic system of Islam, which encourage developments of human beings, enforce justice, stop exploitation and to set up a contented and satisfied society that can be termed as RED welfare society. Additional Objectives: i. ii. To boost the optimum production in both public and private sector Allocation and distribution of resources and product must take a course that fulfils the basic human needs On top of that the fulfillment of basic needs makes society tranquil, comfortable, healthy and efficient, and able to contribute property towards the realization and perpetuation of human welfare.


B. Specific Syariah Objectives in Finance and Banking Transaction 1. Riba is Haram 2. Trade is halal 3. prohibiting of hording system 4. Prohibition of squanders, extravagance and stinginess

Therefore, the objective of syariah in financial activities is always to preserve and develop wealth. However those who engage in the above behaviors are branded as wasteful, decadent, irrational, and irresponsible people. Syariah also authorized lawful investment of wealth and made it obligatory. Syariah also obligate all capable Muslims to work.. This is because the main method of preserving and developing wealth of individuals and the community at large is by working.

The objective of Syariah in this regards is to go beyond the material aspect as in the capitalist system. But it goes wider to the duty of Khalifah and his duty to develop the population, to make world prosperous and to achieve the noble end. Islam aim is to promote prosperity and happiness under the system of Khalifah to develop the earth population. 5. Prohibition of monopoly. Islam has forbids all type of harmful monopoly, weather in goods, money or any other form. All monopoly is ordained unlawful as long as it will negatively affect the social welfare. Moreover, monopoly theory creates DWL, unreasonably high profit and price discrimination. Consequently, create, inflation and SW gain. 6. Prohibition of major uncertainty Any transaction in Islam must be transparent. Therefore, to ritualize this noble objective, Islam prohibited all transactions based on uncertainty. Moreover, it might lead to conflict among contractual parties. i.e. the commodity must be owned by the seller at the time of sale, because short sale in which a person sells a commodity before he owns it are not allowed in accordance to objectives of Syariah. Conclusion In conclusion, Islamic law allows all Islamic Finance and Banking activities that lead to the actualizations of Syariah objectives. Furthermore, investment is considered as an obligation upon all Muslims. That means Muslims have to make use of the wealth in their hands in order to grow it and gain more profits and benefits. The wealth which is not invested is considered a hording.