Therefore Islamic finance being part of economic activities is linked with

Therefore islamic finance being part of economic

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Therefore, Islamic finance being part of economic activities is linked with shari’ah principles through mu’amalat. However, injunctions relating to Aqidah , Ibadah and Akhlaq are fixed and unchangeable
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Due to their suitability to all time and place. Whereas, the injunctions pertaining to mu’amalat that regulate man to man relation relation with other creatures may change with the change of circumstances, custom, place and time. This includes ruling related to contractual law of transaction, the judiciary and Islamic finance. It is this feature of shari’ah that make it suitable to be applied in all times due to its capability of accommodating the need of people in different time and situations.
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Initially, the rulings relating to the mu’amalat are derived from the sources of shari’ah , However, due to the changing circumstances, needs and interests of the people many of the legal injunctions were formulated from the sources of shari’ah through reasoning by qualified Muslim jurists. This is know as ijtihad, that is the “exertion of one’s reasoning faculty to determine a point of law” During the time of the prophet pbuh there was no need for Ijtihad for, the Qur’an was clarified and exemplified by the prophet pbuh. After the demise of prophet pbuh and the death of the companions, Muslims were confronted with new issues and situations.
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Due to the spread of Islam to new territories and lands with different culture. So the need for a proper guideline on how to derive law from Islamic sources, was felt. The law school arose and developed a comprehensive set of methodology on how to interpret the shari’ah. The process applying this method and deducing law from shari’ah and the law thereby deduced is collectively known as fiqh.
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There are four madhab or schools of law for Sunni Muslims. Comprising of Hanafi , Maliki , Shafi’i and Hanbali schools. The follower of these schools are spread over different geographical areas. Therefore, finding the injunctions of Islamic law require reference not only to the sources of the law but also to the books of fiqh. Shari’ah provides a comprehensive framework for the evaluation of the human being act. For, it does not suffice on characterizing acts done as legal or illegal it come up with intermediate values as to the person actions.
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There are generally five categories of assessment of human act which consist of: Obligator y where the performance will amount to a reward and the omission will amount to punishment from God. Recommanded , the performance of act is rewarded but its neglect does not incur punishment. Permitted , acts which neither get reward nor punishment. Discouraged , act where there is a reward for avoidance but no punishment for performance.
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