Sunday, June 18, 2017



Habibah Solehah Binti Ramli
Universiti Sultan Zainal Abidin ,UNISZA 2017

Islamic banking is banking based on Islamic Law (Sharia ). It follows the shariah, called fiqh muamalat (Islamic rules on transactions). The rules and practices of fiqh muamalat came from Al-Quran and As –Sunnah, and other secondary sources of Islamic law. The foundation of Islamic economics, the parents science of Islamic Banking are based on the concept of economic wellbeing, universal brotherhood, justice, equitable distribution of income, and freedom of the individual within the context of social welfare. Islam also encourages truthfulness in business transactions and raises the status of a truthful merchant.
Islamic banking concept was introduced in Malaysia in the early ‘80s with a noble cause to assist the Muslims as a better banking system . In view of those developments in muslims countries have led to the establishment of Bank Islam Malaysia berhad (BIMB) which has incorporated as a public limited company under Malaysia Companies Act 1965 and its activities were separately regulated under the Islamic Banking Act 1983. In launching BIMB in 1983 the fourth Prime Minister Dr Mahathir describe it as “the first step in the larger concept of Islamic economy” and “an alternative to the western banking system” (Kamali,2000). In 1993, the Malaysia government had liberalized the banking industry futher by allowing the conventional banks to offer Islamic Banking product through an “Islamic windows” to enhance the dual banking system to be more effective in promoting Islamic banking as a whole.

Islamic finance is a term that reflect to financial business that is not contradictory to Sharia principle. In Islamic law, one of important principle is calles Istihab which means, the presumption of permissibility. Hence this definite the original rulling for every matter is permissible unless proven otherwise. The issue is when Islamic finance is coming after non-compliant were practiced in this century. This means Islamic finance must take on distinctive features with an innovative approach to remain true to Sharia principle while being remain competitive against conventional finance at the same time.
1.      To understand the idea of sharia, and its practices in muamalah.
2.      To study about Istishab and its application in Islam.
3.      To analyses the issues of istishab in Islamic banking’s product at; Malaysia.

After passing through the decades with a great effort and force, Islamic economics has currently taken place as a newly-developed body knowledge, which provides new insight of economic analyses in the modern world. This is indicated by the fast growth of the literatures available in many languages, apart from mushrooming the Islamic banking and financial institutions (Masyhudi  Muqorobin, 2005).
This also include the issued that the capital market is an important component of a financial system where long-term funds can be raised. This long-term investment can be implemented via a few short-term contracts or in the form of securities which allow the investor to enter or leave the business as they wish. Thus, capital market not only is an avenue for long-term investment but also provides possible liquidity for non-liquid assets. (Shamsiah mohamad, Nor fahimah mohd razif, 2008).
As what we can see, Islamic law has its own specialities and can be tailored to current and local needs. This is because, among the objectives of Islamic law is to create human character, thoughts, feeling and life styles to suit the truth and ensure universal justice. Among the clear evidence is that Islamic law has introduced the knowledge related to the field of fiqh ang laws. At the beginning of islam, fiqh provide a meaningful understanding of what Islamic teaching are, whether related to the beliefs, morality, and human physical activities. (Wan Zulkifli,2012).
The discussion can be extended about the qard . It is because Islam recognised the contract of qord as mentioned in a hadith of the Prophet in which he sais, “If a muslim loans to another Muslim, the reward from it is twice that of sadaqah.” However islam has forbidden the practice the practice of usury as mentioned in the Quran which says “But God hath permitted trade and forbidden usury’ (surah Albaqarah :275). This means that islam preserved the original idea of qard with the banning of interest (Riba). This show that islam has been considered some practise of jahiliyyah and not totally abandoned the practice of that period, also taken into consideration some practice of conventional bank as ‘urf (custom) among the customers, which does not contradict any Sharia principle. Moreover, as function of shariah is to revaluate or ratify the existing practice when it does not violate Islamic law. Similarly, ‘urf has been played a good role in Islamic and conventional bank. (Shafi’I Abdul Azeez Bello, 2013).
Islamic finance industry faces unprecedented new issues that need immediate attention by Shariah scholars. The issues require Shariah scholars to exercise their own ijitihad whether it is collective or independent ijtihad especially in the innovations of Islamic Finance. One of the main challenges in issuing fatwa in Islamic Finance is that the scholars have to innovate Shariah compliance peoducts that are workable and meet the modern market needs. To address this issue, it requires the scholars to have mastery skills in both turath (clasiical knowledge) and contemporary knowledge in Islamic Finance. (Yasmin Hanani Mohd Safian, 2013)

The research methodology used for preparation of this article is that of secondary data. Secondary materials are obtained from related books, documents and journal. Also the facility of internet  were used to help the collection of important information related of the topic.

1.1                  OBJECTIVE OF SHARIA

In principle, Shari’ah aims at bringing benefit to the people and removing hardship from them.
Specifically, the objective or purpose of Sharia (maqasid Sharia) may be stated in the form of general principles as follow :

        i.            Protection of religion (hifz al-din) : Sharia requires the preservation and protection of religion (din) under all circumstances. This is because religion is the essence and spirit of life.
      ii.            Protection of life ( hifz- of nafs) : Sharia requires the preservation and protection of life (nafs) under all circumstances. In other words, Sharia aims at protecting life. A person cannot go and kill others nor harm them in any way save in accordance with the due process of law.
    iii.            Protection of lineage (hifz al nasab) : Sharia requires the preservation and protection of descendants and honour under all circumstances. Sharia is very keen on keeping lineages clear and accurate. Progeny is protected, and thus pre-marital sexual relations and extramarital sexual relations are forbidden and punishable. Sharia prohibits not only fornication and adultery, but also all that lead to them.
    iv.            Protection o intellect (hifz al-aql): Sharia requires the preservation and protection of intellect and mind under all circumstances. To protect the intellect and mind, people should not take any intoxicants, whether alcohol or drugs as these intoxicants bring much more destruction to people than benefits.
      v.            Protection of property ( hifz-al mal ) : Sharia requires the preservation and protection of property under all circumstances. Property in Shariah is something that is highly protected. Naturally, to feel a sense of security is to feel that the fruit of one’s labour is protected and not subjected to theft or usurpation by others.

2.1                  SOURCES OF SHARIA
The sources of the Sharia can be divided into two : Primary sources and Secondary sources.
        i.            Primary sources.

Basically, there are two primary sources of Sharia, which are the Quran and Sunnah. This can be inferred from the following Quran verse: “O you who believe! Obey Allah and obey the messenger, and those charged with authority among you. And if you differ over anything among yourselves, refer it to Allah (al-quran) and the Messenger (al sunnah)” (Al nisa’:59)

a)      Al- Quran :

The Quran is the primary source containing all the fundamental directives and instructions of Allah. Herein are to be found not only directives relating individual conduct but also principles relating to all the aspects of social and cultural life of human being. The Quran is the last and complete edition of Divine Guidance and this is the only book of Allah which has not been distorted.
'Qur’an' literally means 'reading' or 'recitation'. The Meaning Of The Holy Quran is the words of Allah s.w.t., which are miracles that have been revealed to His Messenger Prophet Muhammad s.a.w., which are written in book form, which are reliably transmitted to all mankind by continuous testimony ( tawatur'),with the pronunciations and meanings in theArabic language and its recitations are made as acts of devotion to Allah s.w.t.(‘Ibadah’).The Quran is not only a book of law. The main purpose of Quran is to awaken in man thehigher consciousness of his relation with Allah and the universe. However, in the Quranthere are at least five hundred verses which possess definite legal elements. The scholars of Islam have developed a complete science of interpretation of the Quranic verses which canbe seen in any book of Islamic jurisprudence.

b)     Sunnah ( Al- hadith)
The Sunnah is the second source of Islamic law. Sunnah is an Arabic word which means "Method".   It was applied by the Prophet Muhammad   (peace be upon him) as a legal term to represent what he said, did and agreed to. Its authority is derived from the text of the Quran. The Quran says,  "For you the life of the Prophet is a model of behaviour" (Al-Quran 33:21).
Many of books of traditions were compiled by the companions of the Prophet Sm). These were later on incorporated in the great collections of Hadith (i.e. traditions) of Bukhari, Muslim etc. The collectors of the traditions adopted a very scientific system in collection the Traditions. They did not record any tradition except with the chain of narrators. Every tradition gives the names of the last narrator of the tradition from whom he learnt the tradition and so on back to the Prophet or Companion of the Prophet. The Sunnah which is established through reliable narrators is fully dependable as legal element.

      ii.            Secondary sources.

Basically, there are many secondary sources of Sharia. These sources are not based on divine revelations or divine inspiration but based on Ijtihad or the interpretations of Islamic Jurists.

a)      Ijma’ (Consensus of Opinion):  Ijma’ means unanimous agreement among the mujtahidun (Islamic jurists) of a Muslim community on any Shariah ruling in a particular period following the demise of Prophet Muhammad (SAW).
Ibn Qudamah, a jurist of the Hanbali School, stated that Bay’ Al Muzayadah is permitted according to Ijma’ based on what was practised by Prophet Muhammad (SAW).
Bay’ Al Muzayadah is the offering of goods for sale in a market by a seller followed by demads form buyers who compete to offer the highest price. This process ends in the seller selling the goods to the highest bidder.

b)     Qiyas (analogy) : Qiyas refers to likening a new case in question without textual evidence to an original ruling which is supported by explicit legal text which shares the same cause (‘illah).
To apply Qiyas, it is necessary to find similarity between what is mentioned in legal text and a new problem. Once it is known that both cases, the original and the assimilated, share the same ‘illah (similarity), the judgment of the original case is extended to the assimilated. Consequently, the new problem will caryy the same rulling, as does the original.
The prohibition on wine drinking has been extended to narcotic drugs based on Qiyas. The analysis in this issue is as follows:

Original case : wine drinking
Assimilated : taking narcotic drugs
‘Illah : intoxication
Rulling : prohibition

c)      Istihsan (Juristic preference or Equity in Islamic Law) : istihsan refers to setting aside an established ruling backed by dalil (evidence) on a matter in favour of an alternative ruling which is stronger and more convincing than the first ruling, based on the support by dalil in order to serve the ideals of justice and public interest in a better way.
It is one of the basic principles in sale contract that the object of the sale must be existent at the time of the execution of the sale contract.
      There is however exceptions to the principle. One of the said exceptions is pertaining to Istisna’ contract and the main basis for its legality as advances by the classical jurist is Istihsan which is based upon need and necessity.

d)      Maslahah mursalah (Considerations of jurisprudential or Public Interest) : Maslahah means deciding a ruling based on the principle of general public interest in issues which do not have clear and specific ruling from legal text of either Quran or Sunnah.
According to the Sharia, it is defined as a consideration which is proper and harmonious with the objective of the Sharia consisting of protecting religion, life, intellect/mind, lineage and property.
      For example, the requirement of a written and stamped Sale and Purchase Agreements in a house purchase and practice of warranty of manufacture on sold merchandise is Maslahah based on innovation which is in line with general objective of Islamic law, eventhough it is not textual covered by both the Quran and the Sunnah.

e)      Urf (Custom) : Urf is defined as established norms common to the majority of people in community either in the form of sayings or doings. It is a common customary practice which is collectively accepted and applicable as a legal basis of ruling as long as it does not contradict the Sharia ruling.

f)       Istishab (Presumption of Continuity of a rule): Istishab means the maintenance of the previous ruling (hukum) as long as there is no other evidence (dalil) that can change the particular ruling (hukum).
In other words, it refers to the denotation of a rational proof, which may be employed in the absence of other indications or in simple words the presumption of continuity.
Istishab presumes the continuation of positive and negative until the contrary is established by evidence. For example, a concluded contract of lease is presumed continuing until thwew is a letter of termination, which proves the termination of the contract.


Literally, Istishab means 'escorting' or `companionship'. Technically, istishab denotes a rational proof which may be employed in the absence of other indications; specifically, those facts, or rules of law and reason, whose existence or non-existence had been proven in the past, and which are presumed to remain so for lack of evidence to establish any change. The technical meaning of istishab relates to itsliteral meaning in the sense that the past `accompanies' the present without any interruption or change.[1.
Shawkani, Irshad, p. 237; Amidi, Ihkam, IV, 127; Ibn al-Qayyim, I'lam, I, 294.]

Istishab is validated by the Shafi'i school, the Hanbalis, the Zahiris and the Shi'ah Imamiyyah, but the Hanafis, the Malikis and the mutakallimun, including Abu al-Husayn al-Basri do not consider it a proof in its own right. The opponents of istishab are of the view that establishing the existence of a fact in the past is no proof of as continued existence. The continued existence of the original state is still in need of proof in the same way as the claim which seeks to establish that the original condition has changed.[2. Shawkani, Irshad, p. 237; Abu Zahrah, Usul, p. 234; Mahmassani, Falsafah (Ziadeh's trans.) p.95.]

For the Shafi`is and the Hanbalis, istishab denotes 'continuation of that which is proven and the negation of that which had not existed'. Istishab, in other words, presumes the continuation of both the positive and the negative until the contrary is established by evidence. In its positive sense, istishab requires, for example, that once a contract of sale (or of marriage for that matter), is concluded, it is presumed to remain in force until there is a change. Thus the ownership of the purchaser, and the marital status of the spouses, arc presumed to continue until a transfer of ownership, or dissolution of marriage, can be established by evidence. Since both of these contracts are permanently valid under the Shari'ah and do not admit of any time limits it is reasonable to presume their continuity until there is evidence to the contrary.
 A mere possibility that the property in question might have been sold, or that the marriage might have been dissolved, is not enough to rebut the presumption of istishab.[3. Ibn al-Qayyim,I'lam, I, 294; Badran, Usul, p. 218; Abu Zahrah, Usul, p. 234.]

However, if the law only validates a contract on a temporary basis, such as lease and hire (ijarah), then istishab cannot presume its continuity on a permanent basis.The contract will continue to operate within the specified period and terminate when the period expires.

      Since istishab consists of a probability, namely the presumed continuity of the status quo ante, it is not a strong ground for the deduction of the rules of Shari'ah. Hence when istishab comes into conflict with another proof, the latter takes priority. As it is, istishab is the last ground of fatwa: when the jurist is asked about the ruling of a particular case, he must first search for a solution in the Qur'an, the Sunnah, consensus of opinion, and qiyas. If a solution is still wanting, he may resort to istishab in either its positive or negative capacities. Should there be doubt over the non-existence of something, it will be presumed to exist, but if the doubt is in the proof of something, the presumption will be that it is not proven. In the case of a missing person, for example, the nature of the situation is such that no other proof of Shari'ah could be employed to determine the question of his life or death. Since the main feature of the doubt concerning a missing person is the possibility of his death, istishab will presume that he is still alive. But in the event of an unsubstantiated claim when, for example, A claims that Bowes him a sum of money, the doubt here is concerned with the proof over the existence of a debt, which will be presumed unproven.[6. Shawkani, Irshad, p.237; Abu Zahrah, Usul, p. 235.]


From the viewpoint of the nature of the conditions that are presumed to continue, istishab is divided into four types an follows:

1) Presumption of original absence (istishab al-'adam al-asli),
Which means that a fact or rule of law which had not existed in the past is presumed to be non-existent until the contrary is proved. Thus a child and an uneducated person are presumed to remain so until there is a change in their status, for example by attaining majority, or obtaining educational qualifications respectively. Similarly if A, who is a trading partner to B, claims that he has made no profit, the presumption of absence will be in A's favour unless B can prove otherwise. Another area which is determined by the presumption of original absence is the original freedom from liability, or the presumption of innocence, which will be separately discussed later.[10. Shawkani, Irshad, p. 238; Badran, Usul, p. 219; Abu Zahrah, Usul, p. 236.]

2) Presumption of original presence (istishab al-wujud al-asli).
This variety of istishab takes for grantedthe presence or existence of that which is indicated by the law or reason. For example, when A is known to be indebted to B, A is presumed such until it is proved that he has paid the debt or was acquitted of it. Provided that B's loan to A is proven in the first place as a fact, this is sufficient to give rise to the presumption of its continuity and B need not prove the continuity of the loan in question every day of the month. Similarly, under the presumption of original presence, the purchaser is presumed liable to pay the purchase price by virtue of the presence of the contract of sale until it is proved that he has paid it. By the same token, a husband is liable to pay his wife the dower (mahr) by virtue of the existence of a valid marriage contract. In all these instances, istishab presumes the presence of a liability or a right until an indication to the contrary is found. The ulema are in agreement on the validity of this type of istishab, which must prevail until the contrary is proved.[11. Khallaf,`Ilm, p.92.]

3) Istishab al-hukm, (juristical)
Istishab which presumes the continuity of the general rules and principle, of the law. As earlier stated, istishab is not only concerned with presumption of facts but also with the established rules and principles of the law. Istishab thus takes for granted the continued validity of the provisions of the Shari'ah in regard to permissibility and prohibition (halal and haram). When there is a ruling in the law, whether prohibitory or permissive, it will be presumed to continue until the contrary is proved. But when there is no such ruling available, recourse will be had to the principle of ibahah, which is the general norm of Shari'ah law concerning a matter that is deemed beneficial and free of evil consequences. Hence when the law is silent on a matter and it is not repugnant to reason it will be presumed to be permissible.
This is the majority view, although some Mu'tazilah have held a variant opinion, which is that the general norm in Shari'ah is prohibition unless there is an indication to the contrary. The principle of permissibility (ibahah) originates in the Qur'an, in particular those of its passages which subjugate the earth and its resources to the welfare of man. Thus we read in sura al-Baqarah (2:29): `It is He who has created for you all that is in the earth,' and in sura al-Jathiyah, (45:13) that 'God has subjugated to you all that is in the heavens and in the earth. These Qur'anic declarations take for granted that man should be able to utilise the resources of the world around him to his advantage, which is another way of saying that he is generally permitted to act in the direction of securing his benefits unless he has been expressly prohibited. Hence all objects, legal acts, contracts and exchange of goods and services which are beneficial to human beings are lawful on grounds of original ibahah.[12. Abu Zahrah, Usul, p. 236; Khallaf, 'Ilm, p. 92; Badran, Usul, p. 219; Khudari, Usul, pp. 354-55.] But when the legal norm in regard to something is prohibition, then istishab presumes its continuity until there is evidence tosuggest that it is no longer prohibited.

4) Istishab al-wasf (nature, characteristic)
Continuity of attributes, such as presuming clean water (purity being an attribute) to remain so until the contrary is established to be the case (for example, through a change in its colour or taste). Similarly, when a person makes an ablution to perform the salah, the attribute of ritual purity (taharah) is presumed to continue until it is vitiated. A mere doubt that it might have been vitiated is not sufficient to nullify taharah. By the same token, a guarantor (kafil - kafalah being a juridical attribute) remains responsible for the debt of which he is guarantor until he or the debtor pays it or when the creditor acquits him from payment.[13. Ibn al-Qayyim, I'lam, I, 295; Badran, Usul, p. 219.]
The jurists are in agreement on the validity, in principle, of the first three types of istishab, although they have differed in their detailed implementation, as we shall presently discuss. As for the fourth type of istishab, which relates to the attributes, whether new or well-established, it is a subject on which the jurists have disagreed. The Shafi'i and the Hanbali schools have upheld it absolutely, whereas the Hanafi and Maliki schools accept it with reservations. The case of the missing person is discussed under this variety of istishab, as the question is mainly concerned with the continuity of his life-life being the attribute. Since the missing person (mafqud) was alive at the time when he disappeared, he is presumed to be alive unless there is proof that he has died. He is therefore entitled, under the Shafi'i and Hanbali doctrines, to inherit from a relative who dies while he is still a missing person. But no-one is entitled to inherit from him for the obvious reason that he is presumed alive. Yet under the Hanafi and Maliki law,the missing person neither inherits from others nor can others inherit from him. The Hanafis and Malikis accept istishab al-wasf only as a means of defense, that is, to defend the continued existence of an attribute, but not as a means of proving new rights and new attributes. Istishab can therefore not be used as a means of acquiring new rights for the missing person, but can be used so as to protect all of his existing rights. To use a common expression, istishab can only be used as a shield, not as a sword.If, for example, the missing person had owned property at the time of his disappearance, he continues to be the owner.
Similarly his marital rights are presumed to continue, just as he remains responsible to discharge his obligations until his death is established by evidence or by a judicial decree. But for as long as he remains a missing person, he will not be given a share in inheritance or bequest, although a share will be reserved for him until the facts of his life or death are established. If he is declared dead,the reserved share will be distributed among the other heirs on the assumption that he was dead at the time of the death of his relative. Upon declaration of his death his own estate will be distributed among his heirs as of the time the court declares him dead. This is the position under the Hanafi and Maliki schools, which maintain that although the mafqud is presumed to be alive, this is only a presumption, not a fact, and may therefore not be used as a basis for the creation of new rights.[14. Shawkani, Irshad, p. 238; Abu Zahrah, Usul, p. 237; Badran, Usul, p. 223; Coulson, Succession, p. 198ff.]
The question may arise: why can his heirs not inherit from the mafqud? If nothing is certain, perhaps his heirs could be assigned their shares, or the shares may be reserved in their names until the facts are known. In response to this, the Hanafis invoke the principle of "original absence", which means here that a right to inheritance is originally absent and will be presumed so until there is positive proof that it has materialised.

2.3   Application of istishab in response to contemporary issues in muamalah islam.

Istishab is a method of applying the formulation of the law applicable in the field of economy. The principle that basically every person is free from any kind of liabilities in debt.Therefore, if a debtor beg to repay debt, the person who sued is entitled to reject it, until that the creditor is able to prove in court.
There is a Hadith :  “عليه  المدعى   عل واليمين المدعي عل  البينة " , The burden of proof is on the accuser and swearing the oath is on the one accused (Riwayah Bayhaqī).
      based on the concept istishab, a defendant in a strong position for the plaintiffs could not prove his claim, he is free from lawsuits. This is because the original law every person has dependents forest.

1.      M.H. Kamali, Principles of Islamic Jurisprudence
2.      Mohd Herman Sukri bin Mohammad Hussin , Mohd Hawari bin Mohammad Hussin,Understanding Shariah and its application in Islamic finance, IBFIM Malaysia.
3.      Masyhudi Muqorobin,2015, Journey of Islamic economics in the modern world, Islamic Economic Forum for Indonesian Development (ISEFID) Kuala Lumpur – Jakarta.
4.      Shamsiah Mohamad, Nor Fahimah Mohd Razif, 2008 , Shariah-compliant securities, sukuk and Islamic reits in Malaysia.
5.      Wan Zulkifli, Hasnan, Mohammad Sabri,Zulkifli Mohamad, Azizi Umar, 2012, Suitability of the zakah fatwa with economics society in Terengganu, Malaysia
6.      Shafi’I Abdul Azeez Bello, Rusni Bt Hassan,2013, Application of Urf in Islamic and conventional bank.
7.      Yasmin Hanani Mohd Safian, 2013, Shariah scholars and fatwa making process in Islamic Finance.
8.      Mohammed Zeeshan Yousuf, 2014, Introduction to Islamic Finance.
9.      Anas P.A. , The Applications of Islamic banking in the light of Maqasid Al- Shariah

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