Principles of Islamic finance gif
Author: Mughees Shaukat
It stands to reason that fatwa is not an easy task, but rather an arduous one. This is because the one who commits himself to issuing fatwas acts on behalf of Allah’s Messengers and Prophets. The Prophet (peace and blessings be upon him) is reported to have said: “Scholars are the heirs of Prophets, and Prophets neither left behind dinars or dirhams (Arab coins); rather they left knowledge. He who ac- quires knowledge has really gained some- thing of great value.” This article will not only explore the meaning and perception of fatwa as a whole but would also link and reflect on its influence, bearings and links to Islamic finance.
In the first part we will look at an overview of fatwa: its meaning, history, current trends and legal implications. In the sec- ond part we will go further into detail re- garding different schools of law on fatwa, and the significance of fatwa in Islamic finance.
Fatwa has a very important role in Islamic law and jurisprudence and Islamic finance. Nowadays, fatwa has been given a very important position in the Islamic finance industry; Shariah advisors are practicing as an independent body with the respon- sibility of issuing Shariah Rulings or fatwa to the various issues in the Islamic bank- ing and finance industry.
The Prophet in his role as intermediary between God and the Muslims issued the first legal rulings. Fatwa is one of the no- ble tasks of Prophethood that has been known throughout the history of mankind. Due to the critical position of fatwa, com- petent scholars fear it and prefer not to get involved in its process due to the im- plications on human life.
The practical implications of fatwa in Is- lamic finance are evident in the daily business operations of Islamic banks and Islamic financial institutions. There are several fatawa in Islamic finance issued by competent scholars in various areas of Islamic banking and finance; these are is- sued through Shariah boards, individually or through collective ijtihad and fatwa; by fiqh academy or Shariah council. Islamic finance today had shown fast growth and development in the critical role of fatwa in the Islamic financial system.
What is Fatwa?
A fatwa (plural: fatawa), in the Islamic faith is a religious opinion on Islamic law issued by an Islamic scholar. In Sunni Is- lam any fatwa is non-binding, whereas in Shia Islam it could be, depending on the status of the scholar.
Fatwa is derived from the root fata, which includes in its semantic field the mean- ings “youth, newness, clarification, expla- nation.” In the Qur’an, the term is used in two verbal forms meaning “asking for a definitive answer,” and “giving a definitive answer” (4.127, 176), although neither passage has a binding clause. Conse- quently, the concept of fatwa in early Islam developed in the framework of a question and answer process to better communi- cate on religious matters. Its subject was ilm (knowledge) without further specifica- tion. Later, when ilm was identified with hadith (sayings of the Prophet, which are divided into two parts, the matn (text) and the isnad (chain of reporters to verify authenticity)), Fatwa came to be associ- ated with ra’y (opinion) and fiqh (jurispru- dence). After a corpus of legal definitions emerged, the term followed madrasah (re- ligious school) interpretations, especially when fiqh did not provide clear technical assessments.
In the early days of Islam, fatwa were pro- nounced by distinguished scholars to pro- vide guidance to other scholars, judges and citizens on how subtle points of Islam- ic law should be understood, interpreted or applied. There were strict rules on who is eligible to issue a valid fatwa and who could not, as well as on the conditions the fatwa must satisfy to be valid.
The first legal rulings were issued by the Prophet in his role as intermediary be- tween God and the Muslims. The form in which these legal commands were re- vealed takes into account the fact that the Islamic model instituted by the Prophet reflected, in some respects, a drastic de- parture from previous Arab customs while in other areas, the Islamic response built upon existing customary practices. Be- cause of this relationship between pre- Islamic customs and the new Islamic legal structure, many Qur’anic legal commands were revealed as a result of individual
members of the Prophet’s community ap- proaching him for “clarification regarding the continuing validity of a certain prac- tice.”
After the Prophet’s death, when direct ac- cess to divine revelation was no longer available, Muslims turned to the Prophet’s closest Companions for guidance. Fatawa at this point in Islamic history took the form of the Companions commenting on how the Prophet approached a certain issue. When the generation of the Companions died out, Muslims came to rely on hadith, which were linked to the Prophet through their isnad. Those who mastered these hadith, the ‘ulama, became in the sec- ond Islamic century the means by which to receive religious guidance on specific issues. As the Islamic Empire expanded and sophisticated state control became increasingly necessary, legal scholarship as the basis of state legitimacy-took on a similarly bureaucratic nature. Whereas “fatwa began as a private activity that was independent of state control,” it became increasingly formalized, culminating in the creation of the four Sunni madhhabs and Shi’i Jafari madhhab, each of which compiled its own “fatwa collections.”
Today, with the existence of modern inde- pendent States, each with its own legisla- tive system, and/or its own body of Ule- mas, each country develops and applies its own rules, based on its own interpreta- tion of religious prescriptions. Many Mus- lim countries (such as Egypt and Tunisia) have an official Mufti position; a distin- guished expert in the Shariah is appoint- ed to this position by the civil authorities of the country.
Fatwa (opinion or ruling) of Sahaba is in- deed a very important and deserves high- est consideration, they being close to the Prophet and because of their direct knowl- edge from the Prophet. There is some disagreement as to who is a Sahabi. The majority holds that anybody who met the Prophet while believing Islam is a Sahabi. The minority holds that “Suhbat” (conti- nuity of companionship) is a requirement to call a person a Sahabi of the Prophet [Imam Shawkani, Irshad; also Dr. Hashim Kamali, Principles of Islamic Jurispru- dence, Islamic Texts Society, Cambridge, and U.K.]. Both points of view have
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