Islamic Finance in One Principle

The Islamic Finance industry is a thriving US $3 trillion industry. It spans across several sectors such as banking, capital markets, insurance and investment funds. These sectors are regulated by several Shariah principles and Shariah standards. Generally, several principles are cited as the core framework which highlight key Shariah principles for Economics and Finance. However, what is the common thread between all the various principles and teachings? What is the root for all these principles? What is the prohibition of Riba, Gharar and gambling ultimately seeking? This article explores the answer to these questions. 

Islamic Finance is quite literally the Islamic way to do business, finance and economics. And Islamic means nothing more than a paradigm of submitting & acknowledging God. Thus, Islamic Finance is a paradigm of finance which recognises, submits & is appreciative to the Creator and Lord. Every principle, every framework and every standard flows from this reality and root. Without God in the equation, Islamic Finance is just finance. 

The ultimate objective of Islamic Finance is just that; to develop an economy and financing mechanism which makes people transact according to God’s framework and guidelines. Of course, Islamic Finance prohibits Riba due to the several harms Riba embeds. Islamic Finance also bans uncertainty in contracts as the tendency to quarrel increases. And lastly, Islamic Finance prohibits gambling for the harms it does to the society. All these rulings are not just for the immediate benefit of humanity and their worldly life, but ultimately to allow humanity to recognise their purpose of creation and their Creator. These prohibitions remove the roadblocks in recognising God.

The source of Islamic Finance is the Qur’an – the final revelation from God. And the purpose of the Qur’an is for humanity to reconnect with God. Although the teachings of the Qur’an serve a beneficial purpose in the world, ultimately, the guidance is there for us to find our way back to our Creator. 

The prohibition of Riba is not there as the end, rather it is the means to an end. The end is the recognition of God. Through avoiding Riba, mankind can trade and transact the way God wants us to, and as a result, have a non-exploitative, more equal and just society. Consequently, the environment is more conducive in recognising God. When there is no Riba in society, all these ills are removed from the society, making it a reflection of the bounty of peace and serenity enjoyed in the Heavens. 

The same applies to all the teachings of Islamic Finance. They are all there to allow mankind to walk on the path of guidance and appreciate the majesty and grandeur of the Creator. Islamic Finance is not just an ethical form of finance where the teachings have come from society, culture or random values, instead, these principles and values have been revealed to us from God for humanity. 

The financial system should not destabalise the beautiful kingdom of God. Riba, Gambling and Gharar do just that. Hence, Islamic Finance is the way to maintain the balance in the kingdom of God. Islamic Finance allows the economy and finance to be in sync and harmony with the submission in the Heavens. When all is said and done, all economic agents will return to God for accountability. Those who persevered in trying to maintain the balance on Earth with a genuine intention to win the pleasure of God, will be duly rewarded and welcomed by God. Those who left no stone unturned to destabalise the beautiful kingdom of God through exploitative financial means will be accountable to God.

Perhaps, the better way to frame this discussion is to flip it on its head. God does not want anyone to be exploited, harmed or unjustly enriched. He does not want us to commit these crimes and nor does He want His servants to suffer from this. He loves His creation and wants the inhabitants of the Earth to do what is in their best interest. Hence, Islamic Finance is ultimately about reconnecting with God and recognising God through our economic policies and financial transactions. 

In conclusion, the entire Islamic Finance is there to ultimately recognise God through our financial and economic affairs. This one principle flows through the veins of the entire Islamic Finance.

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