Finance & Banking

STANDARDISATION in the ISLAMIC BANKING and THROUGH a Methodology of INCLUSION and EXPANSION Rationale and Historical Intellectual Evidence Shaykh-ul-Islam Dr. Muhammad Tahir-ul-Qadri

Islamic banking and finance (IBF) today is making
giant strides in terms of development and delivery
of products and services. As reported by Global
Islamic Finance Report 2019, the global size of IBF
is estimated at US$ 2.6 trillion at the end of 2018.
This success has not emerged without challenges
that are diverse and multidimensional. One of the
major challenges the Islamic banking and financial
industry is facing today is lack of harmonised Shari’a
rules and regulations, and the consequent nonuniformity in Islamic banking products and services
being offered in various regions of the world. This
has been a major point of discussion in the global
Islamic financial services industry, with a widely
held view that the validity or invalidity of certain
products offered by Islamic financial institutions
(IFIs) across the world is due to divergence of
opinions among Muslim jurists belonging to
different schools of fiqh (e.g., hanafi, maliki, shafi’i
and hanbali). Regional differences in interpretation
and derivation of rulings in accordance with the
popular school of law of that region stand as
the main reason for not having a standardised, harmonised, uniform and universal Islamic banking
system across the world.

The resultant multiple interpretations by jurists
belonging to different schools of fiqh regarding
Islamic financial products result in minor and major
disparities. In view of this fact, it is logical that
without a universally unified and uniform Shari’a
code, the acceptability of products introduced in
Islamic financial industry will remain fragmented.1

It is, therefore, suggested that a prompt attention
and action by Muslim scholars and Islamic finance
experts is essential, as the continuation of the
current state of affairs in this domain would
damage the growth of the IBF industry in the
years ahead. This is becoming a growing concern,
given that the industry has already started slowing
down. Furthermore, the critics question viability
of Islamic economic and banking system as an
alternative to the conventional system, if global
harmony and universal standardisation of Islamic
banking products and services cannot be achieved
even within the Muslim world.

Considering the necessity and importance of the
issue of standardisation of products, this article
focuses on this issue of immense importance to

There are different national approaches to Shari’a
governance around the world. For instance, Central
Bank of Bahrain (CBB) requires IFIs operating
in its jurisdiction to set up a Shariah Advisory
Committee at the institutional level, while it has
only recently set up a National Shariah Advisory
Board, with a limited role to advise the central
bank on Shari’a matters. In Malaysia and Indonesia,
on the other hand, National Shariah Advisory
Councils attempt to standardise Shari’a opinions
(fatawa) and the resultant Shari’a practices in IFIs.
In the case of some other GCC countries, such as
Kuwait and Qatar, the Shari’a committees at the
institutional level and another independent body,
i.e., the Ministry of Awqaf and Religious Affairs
or the Ministry of Justice and Islamic Affairs, are
given the authority to oversee Shari’a governance
practices. The UAE has also recently set up a
centralised Shari’a Advisory Council. The higher
Shari’a authorities in the UAE, Qatar, and Kuwait
only act when there are conflicts of opinion among
Shari’a scholars. In Saudi Arabia, Shari’a advisory is
a purely market phenomenon. It is also considered
therein that the higher Shari’a authority cannot
effectively supervise Shari’a-compliance for IFIs,
and may in fact negatively impact stability of the
Islamic finance industry.

In the absence of a central Shari’a authority and
abidingness of its rulings and fatawa on IFIs,

Different interpretations of Shari’a rules amongst
Shari’a scholars may create confusion in the general
public as well as in banking communities.

This difference of opinion applies not only to some
of the products, but also to some of the operations
of the Islamic banks.

For example, there is no uniformity in opinions
pertaining to the principle of the trust financing contract (mudaraba) in business transactions. The
maliki and shafi’i schools of jurisprudence are of the
view that mudaraba should be confined to trade
and trade-related activities alone, and should not
include the activities of manufacturing. According
to them, the contract for manufacturing should
be excluded from mudaraba, which is a profitloss sharing contract, but formed under a specific
long-term contract whereby a party undertakes
to manufacture, i.e., istisna’. However, the hanafi
school of law does not object to the application
of mudaraba for manufacturing activities, while
the hanbali school of law allows two separate
agreements using mudaraba and istisna’ principles
as long as the two agreements do not impose
conditions upon each other.

Such non-uniformity of opinions amongst Islamic
scholars from different schools of law generates
confusion amongst bankers, customers and
the general public. Customers will not really
understand what are the ‘dos and don’ts’ of the
Islamic banking industry, and will make their own
personal interpretations. This situation is unhealthy
for banker-customer relations, as both parties may
have different interpretations.

The real reason behind the lack of harmonisation
of practices and uniformity of opinions is the
strict conformity with one school of law (taqlid
al-madh’hab) in a particular region, and with
some other school of law in another region. The
solution to this problem lies in adopting a neojuristic approach of inclusive accommodation and
flexibility. This alternative approach is based on
the Quranic principle of facilitation and the juristic
principle of expansion. It may be named as taqlid
al-madhahib or conformity with all schools of law.

One of the primary objectives of Shari’a is to
facilitate human kind and remove burdens,
difficulties and hardships from their lives. The
Quran states, “Allah desires ease for you and does not desire hardship for you.” The entire religion
of Islam is structured upon the provision of ease
and the removal of difficulty. The Quran explicates
this by saying, “He has chosen you, and has not laid
upon you any hardship or constriction in the matter
of religion.”6 Furthermore, it is also stated, “Allah
does not want to make things hard for you.”

Since Allah knows the weakness of human beings,
He has lightened for them the legal responsibilities
and lessened from them the obligations that they
would not be able to fulfil. He said, “Allah intends
to lighten your burden. And man has been created
weak (and infirm).”8 He further explained, “Allah
has, at present, lightened the burden (of His
commandment) on you. He knows that there is
(some degree of) weakness in you.”

Jabir (may Allah be pleased with him) reported that
Holy Prophet (peace be upon him) said, “Indeed,
Allah did not send me to be harsh or cause harm;
He sent me to teach and make things easy.”10 Aisha
bint Abu Bakr (peace be upon her) said, “Never
was Allah’s Messenger presented with two options
except that he would choose the easier of the two,
so long as it was not a sin.”11 According to Anas bin
Malik (may Allah be pleased with him), the Prophet
(peace by upon him) said, “Make things easy and
do not make things difficult. Give glad tidings and
do not make people feel averse.”12 Abu Hurayra
(may Allah be pleased with him) reports that Allah’s
Messenger (peace by upon him) said, “You were
sent to make things easy and not to make things
difficult.”13 Imam Ahmad bin Hanbal narrated in
Musnad that the Holy Prophet said, “Verily, the
best of your religion is the easier part. Verily, the
best of your religion is the easier part. Verily, the
best of your religion is the easier part.”

That is why Allama Ibn Qudama, a great jurist of
hanbali school of thought, writes in his book Rawda
al-Nazir fi Usul al-Fiqh, “If a jurist is approached for
an edict and his edict remains devoid of openness
and flexibility because of his rigidity the edictseeker should be guided towards some other jurist

who is open-minded and flexible”.15 Furthermore,
Allama Ibn Qudama reports that Hussain bin
Bashaar inquired from Imam Ahmad bin Hanbal
about an issue. He said, “If he does it, he will
become a perjurer.” Hussain bin Bashaar said, “If
someone issues me the edict that he will not be a
perjurer then (what will be the case)?” Imam Ahmad
replied, “Do you know of the Medinans’ session
(at Rasaafa)?” He asked, “If they issue the edict,
would that be permissible?” Imam Ahmad replied
in affirmative.

Here, Imam Ahmad himself is guiding the inquirer
to go to Rasaafa and get the answer from the
Medinan scholars because their opinion was based
on openness, inclusion, flexibility and facilitation.
These juristic principles are always closer to the
basic spirit of Islamic teachings.

The intent of the wholesome of Shari’a is to create
ease and facilitation for humankind. Keeping in
view this principle, the jurists have promoted ease,
expansion and facilitation for humans in making
inferences from the sources. While describing
various disputations, they have reported different
verdicts and opinions that contain greater flexibility
and facilitation. Mentioning these verdicts, the
imams have frequently referred to statements,
using descriptions like:

• This is the most correct
• This is the vastest
• This is the safest
• This is the best analogy
• That is better
• This is more evident
• This is more compatible to analogy
• This is more lenient and easier for the people

The jurists who have used such epithets do not
represent any specific period, nor do they belong
to any single school of law; rather they belong to all the eras and all the schools of law. They include
Imam Abu Hanifa, Imam Malik, Imam Shafi’i, Imam
Ahmad bin Hanbal, Imam Muhammad, Imam Abu
Yusuf, Samarqandi, Sarakhsi, Kasani, Zayla’i, Subki,
Nawawi, Shurbini, Ramli, Ibn Hazm, Ibn Muflih, Ibn
Qudama, Ibn Taymiyya, Ibn Nujaym, Haakafi and
Ibn Abidin, etc.

In this regard, a reasoned strategy needs to be
developed, which will enable us to benefit from
the juristic reservoir of all the four schools in order
to sort out the complexities of life without any
deferment and hindrance.

  1. Pursuing this principle, Imam Wali Allah
    Muhaddith Dihlawi states:
    • In most of the juristic reasoning characterised
    by difference of opinions, the truth spreads
    through all of these opinions.
    • There is no narrowness in Deen; rather it offers
    ease, expansion and accommodation.
    • Sticking only to one way and believing firmly
    that the opponent’s viewpoint is definitely
    wrong, is baseless.17
  2. Imam Izz-ud-Din bin Abd-us-Salam, expressing
    the same strategy, states:

“Successful is the person who acted upon things
the scholars agreed upon and refrained from things
that the scholars declared unlawful without any
disagreement, and believed in the permissibility
of matters, which the scholars and jurists decreed
unanimously, also performed the acts, which the
scholars unanimously regarded commendable;
and abstained from the acts that the scholars
unanimously agreed to disapprove.
However, the things where the scholars disagreed
and could not concur on one opinion can be divided
into two forms:

• The matter wherein they have had difference
of opinion on the disputations about which the
command of the Lawgiver can be repealed. In
this case, no chance of following that opinion
remains permissible, because such a ruling will
be considered a mistake in totality. It will be
rejected because the mistake lies in its original legality, and this mistake has detached the
ruling from the basic will of the Lawgiver and
spirit of the textual law.

• The second form is related to the matter
where difference of opinion does not pertain
to the issues about which the command of the
Lawgiver can be repealed. There is no harm in
obeying or disobeying such a ruling, with the
condition that one should follow some authentic
juristic opinion and not an unauthentic one.
The practice in the early centuries of Muslim
Umma, when the traditional schools of law
were not formulated and enforced, was not to
follow any specific jurisprudence; but people
used to follow any legal opinion of a competent
scholar, which at least enjoyed the consensus
of some jurists.”

  1. Imam Izz-ud-Din bin Abd-us-Salam further
    asserted on a question:
    “If the school that he is abandoning and the one
    that he is adopting are without much distance
    closer to one another in their sources and origins,
    then it is permissible to leave one and join the other.
    It is because from the period of the Companions
    until the formation of four juristic schools, the
    Muslims have been following all the schools of
    jurisprudence instead of one of them. Whoever,
    one would consider a better scholar, superior in
    God-consciousness, he would approach him for
    an edict and follow him. Nobody used to dislike
    this way, nor was considered disliking by anyone
    worth any notice. Had it been the wrong way, the
    scholars would have rejected it and stopped others
    to follow it.”

Imam Wali Allah Dihlawi further writes that the
difference of opinion is of four kinds:

  1. Determined Opinion: The difference of opinion
    is not justified in matters wherein the truth
    is absolutely and certainly determined. Its
    compliance is mandatory and differing from this
    position is definitely void.
  2. Preferred Opinion: The problem where the truth
    is determined by majority vote of the schools
    and the jurists and it weighs in predominant
    scale. Differing from this position is probably
  1. Unpreferred Opinion: This is a problem where
    both aspects are under equal authority and
    none of the aspects is preferred to the other.
    In this matter, an open choice between the two
    opinions is granted definitely.
  2. Compatible Opinion: This is an issue where similar
    choice is given on both sides with a dominant
    opinion. Therefore, in this case also, a jurist
    is free to adopt either of the two authorities
    or opinions, based on the compatibility of the
    evidence and the given circumstances.

Therefore, the scholars and jurists, leaving the
first kind aside, can use their juristic discretion in
adopting any viewpoint in the last three situations,
following the above-mentioned principles of

Imam Wali Allah Dihlawi describes the occasions to
differ at another place in his book Iqd al-Jeed:
“It is an established fact that the difference
amongst the jurists or mujtahidun arose due to
following reasons:

  1. A mujtahid found a hadith about an incident,
    while the other missed it. In this case, the one
    who found the truth is called mujtahid mu’ayyan.
  2. Every mujtahid has hadiths of the Prophet and
    the reports of the companions. Every one of
    them exercised ijtihad (deductive reasoning)
    in preferring or finding compatibility among
    hadiths and companions’ reports regarding any
    given legal situation. Their ijtihad took it to the
    status of a determined command, due to which
    the difference of opinion transpired to the
    scope of adopting any of the opinions.
  3. The mujtahids differed in the following matters:
    • The connotations and interpretation of words
    and idioms in use and determining their meanings and implications.

• Pinpointing and determining the confines of
• The true recognition of conditions and
constituent elements of a legal act or its
effects. Thus ijtihad of every mujtahid took him
to a separate and permanent opinion in framing
the legal position of that act.
• A different approach in formulating the juristic
principles. Since the framed juristic principles
or conditions were different from one another,
resultantly, difference of legal opinion occurred
also in peripheral issues.

That is why the Prophet said: “Difference of
opinion amongst my Umma is a blessing.”21 This
difference of opinion has been declared to be a
blessing of Almighty Allah, because none of them
is negating the command of God. All of them are
trying to determine the meanings and specify the
implications of a particular verse, hadith or word
in question in different ways. Therefore, these
juristic differences have expanded the scope of
legal options for the Umma.

“Therefore, all of the mujtahids are on straight
path in all the above-mentioned forms when
their sources are akin to and compatible with the
indicated methodology. That is why, one can easily
accept anyone of them without any confusion.”

It can be asserted in the light of legal arguments
that, apart from the Prophets, it is not legally
prohibited to differ with any person of any exalted
position in any issue under any circumstances. This
station is only exclusive for Allah and His exalted
Messenger. The four Imams too have expanded
upon this matter. The Quran states:

“O believers! Obey Allah and obey the Messenger
and those who hold the authority amongst you.”

The Quran and Sunna come under the article of:
“Obey Allah and obey the Messenger.”

The schools of law and their Imams fall under the
article of:
“Those who hold the authority amongst you.”

As mentioned in this verse, the commandment of
“obey’ has been repeated for the Prophet in the
same way as for Allah, to declare the absolute
and unconditional authority vested with the
commandment of the Holy Prophet. However, in
the case of the ruler, the command of obeying
has not been verbally repeated. This style of
linguistic composition signifies that the obedience
rendered to the ruler is qualified, conditional and
challengeable. That is why, Almighty Allah has
further commanded:

“Then if you disagree amongst yourselves over any
issue, refer it to Allah and the Messenger (for final
judgment), if you believe in Allah and the Last Day.”

This Quranic article promulgates three basic
i. The principle of the supreme and absolute juristic
authority of the Quran and Sunna;
ii. The principle of subordinate and conditional
authority of the juristic opinions; and
iii. The principle of permissibility of differing from
one opinion and adopting the other, due to the
reason of stronger supporting evidence of the
Quran and Sunna.

  1. Imam Wali Allah al-Dihlawi states:
    “The overwhelming majority of scholars belonging
    to the four schools have followed the middle course
    between two extremes of excess and paucity we
    have mentioned. All the four Imams instructed their
    followers of the same path of moderation. Shaykh
    Abd al-Wahhab al-Sharani has reported from Imam

Abu Hanifa in al-Yawaqit wa al-Jawahir, saying, ‘It is
unjust for a person who is not acquainted with the
proof contained in my words to issue an edict just
on the basis of my words.’ When he decreed his
edict he would point towards himself and say, ‘As
far as I know, this is the opinion of Numan Bin Thabit
[Abu Hanifa], and, this is more acceptable to me. If
there is a better opinion, that is more authentic and
would be closer to the truth.’ Similarly, Imam Malik
used to say, ‘Except for the Messenger of Allah,
everyone can be seized for his words and his words
can be rejected.’ Hakim and Bayhaqi have reported
from Imam Shafi’i, saying, ‘When the authenticity
of hadith is proved, that is my school.’”

Abu Hanifa in al-Yawaqit wa al-Jawahir, saying, ‘It is
unjust for a person who is not acquainted with the
proof contained in my words to issue an edict just
on the basis of my words.’ When he decreed his
edict he would point towards himself and say, ‘As
far as I know, this is the opinion of Numan Bin Thabit
[Abu Hanifa], and, this is more acceptable to me. If
there is a better opinion, that is more authentic and
would be closer to the truth.’ Similarly, Imam Malik
used to say, ‘Except for the Messenger of Allah,
everyone can be seized for his words and his words
can be rejected.’ Hakim and Bayhaqi have reported
from Imam Shafi’i, saying, ‘When the authenticity
of hadith is proved, that is my school.’”

  1. Zarkashi states:
    “The Companions had a common agreement on
    this point that there was a difference in their level
    of knowledge and understanding but, despite
    that, there was consensus among them on the
    permissibility of following a path of a person of
    lower rank in the presence of a person enjoying a
    higher rank in knowledge and wisdom.”

This principle reveals that, under peculiar
circumstances, it is permissible to prefer another
Imam’s verdict due to legal expediency, evidential
strength or circumstantial necessity. The majority
of jurists maintain the same standpoint. However,
the juristic conditions and limits have to be
observed compulsorily.

  1. Ibn Taymiyya states:
    “Sometimes, Allah Most High bestows upon a
    scholar the wisdom and insight which the other
  2. Ibn Abidin has stated with reference to al-Iqd alFarid authored by Allama Shurunbulali:
    “It is not imperative for a person to follow a
    particular school of law in all cases, without any

He further states:
“In certain issues, it is permissible for a person to
follow another Imam’s school against the school of
his own Imam, provided he cares for all the terms
and conditions fixed by the other Imam.”
We learn from these proofs and statements that,
about a given disputation, shifting from one juristic
school to the other is permissible. However, this
permissibility is dependent upon the fulfilment of
certain conditions described by the jurists.

The following are the guiding principles for finding
juristic solutions for modern issues, through the
methodology of inclusive accommodation and
flexibility (al-tawassu’).

  1. As far as possible and whatever way it works,
    we should normally try to draw inferences from the
    rulings of the great Imams and must not exit from
    all of the four schools of jurisprudence. There is no
    harm in deserting one school of law and taking up
    the other in solving a specific complicated issue.
  2. Of the followed schools, whichever offers any
    key or solution to any modern-day complication or
    complex development, should be adopted to solve
    the problem. Therefore, conducting a modern
    ijtihad does not become the only solution, nor do
    we open the door of ijtihad to every Tom, Dick and
  3. This is so because the demand of necessity or
    compulsive intervention of time neither does open
    the door of ijtihad wide apart, nor shuts it absolutely.
    The right and moderate path lies between these
    two extremes, so that juristic reasoning is practiced
    under real necessity. And this juristic reasoning does
    not transgress or go independent of the principles
    and juristic procedures laid down by the schools

of law. In brief, if the desired solution is found in
the master books of any of the four schools, the
edict can be issued from there, and so new juristic
reasoning remains beyond any need.

  1. The change of school of law should not be due
    to personal desire; it should rather be owing to
    religious necessity or general expediency as stated
    by Allama Ibn Abidin al-Shami:

of law. In brief, if the desired solution is found in
the master books of any of the four schools, the
edict can be issued from there, and so new juristic
reasoning remains beyond any need.

  1. The change of school of law should not be due
    to personal desire; it should rather be owing to
    religious necessity or general expediency as stated
    by Allama Ibn Abidin al-Shami:

“A person’s change from one juristic school to the
other due to worldly desires and pursuits without a solid
reason will be an extremely condemnable act, because
he has followed the prohibitions of deen and degraded his School of law.”

  1. Leaving one’s own Imam’s verdict and following
    the other’s should be based on the strength of
    proof, legal expediency or circumstantial necessity.
    It should not be for the sake of avoiding the Divine
  2. Only such a person is allowed to shift from one
    school to another who is sufficiently competent to
    distinguish between weak and strong reasons and
    equipped with knowledge of legal expediencies.
  3. If a solution is not explicitly found, even in any
    of these sources, there is no harm in exercising
    analogical deduction for unsolved matters provided
    the analogy is not absolutely differential.
  1. However, if all the four schools do not offer
    any analogical solution to a modern-day problem,
    then we should go for exegetical deduction.
    This is reinterpretation of the text, following the
    exegetical and juristic principles and general legal
    provisions of the Quran and Sunna.
  2. If we do not find any clear text of the divine
    command that can be used as juristic basis for the
    above-mentioned deductions, then we should go
    for deductive reasoning based on public interest.
    This can be conducted in the forms of: juristic
    preference (al-istihsan), presumption of continuity
    (al-istishab), public good (al-istislah), common
    benefit (al-masalih al-mursala), ‘usage (al-urf) and
    convention (al-ada)’, ‘legal necessity (al-darura)’,
    ‘change of law by change of time (taghayyur alahkam bi taghayyur al-zaman)’, etc.
  3. There are some juristic principles, agreed
    upon and practiced by all great scholars of the
    early Islamic generations, before the schools of
    law were formulated. One of these principles
    relates to interactions. According to this principle,
    wherever flexibility and facilitation is necessarily
    required, anyone of the four schools or anyone
    of the Shari’a evidences will be adopted on the
    basis of compatibility between the spirit of Islamic
    teachings and the demands of the time.

In view of the current national and international
complexities and changing ground realities,
the jurists have followed the path of openness,
flexibility and liberality (al-tawassu’) instead of
tenacious adherence to a single school of law or
the path of narrowness and rigidity. As the basis
of the problems grows wider and expands in span
and novelty, the rules to resolve the problems
also demand adoption of an open-minded and a
holistic approach. If the issue is related to personal
matters, adherence to a particular school of law will
be preferred. However, if the problem happens to
be wide-spectrum and involves a broader span of
activity and extensive international repercussions,
the methodology to deal with it would also be allinclusive, liberal and wide-ranging.

In like manner, the above-mentioned
intra-school principles should be
applied to inter-school matters, in
order to infer, extend, prefer or adopt
a verdict of any of the schools of law
as per requirements. This is how the
truthfulness and veracity of all the four
schools of law would be practically
applied and enforced. Otherwise, it will
negate Islam’s global immensity and
One of the main Divine objectives,
and why various schools of law earned
acceptance and popularity amongst
the Umma, was that all the commands
and teachings of the Prophet
Muhammad (peace be upon him)
should be protected, practiced and
transmitted in their real manifestation.
In this way, every single Sunna of the
Holy Prophet would always remain
alive. None of the Prophets’ practices,
teachings and commands may be
abandoned at any given time. Almighty
Allah has practically protected all
aspects of the holy life of the Prophet
in the form of different schools of law.
Nevertheless, the protection of the
whole of the Sunna of Holy Prophet
would not have been possible through
one school of law only, because some
variations and alterations gradually
took place in the Sunna from time to
time, in accordance with occasional
needs and circumstantial requirements.
Therefore, the real purpose of the
existence of different madhahib is to
create a total comprehension of the
Prophetic practices, and not to create
a narrow and rigid vision of Islamic

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