IPBF-Shariah Principles & Its Source Part I – Transcript

00:01Peace be upon you, and the mercy and blessings of Allah! Welcome back to the discussion session, and we are talking about Islamic principles of business and finance. In our basic discussions in the episodes so far, we talked about Islam, its foundation, ideology, belief , life, and the part related to faith ( imaniat). Today's topic is titled ' Sharia Principles and its Sources,' because we will discuss what the

00:29principles or parameters of Sharia are in Islam, and its major sources, which we will refer to as primary and secondary sources. Today, we are looking at this topic. Before we begin, the most important thing to discuss is Islam, and In Islam, we defined four things very simply: Islam is a complete code of life and an unconditional and

00:58total submission to divine instructions , namely the Quran and the practice of Muhammad (peace be upon him). So, the rules and principles of Islam, when summarized, are labeled as Sharia, or we call them Sharia principles. The literal meaning of Sharia is a plain, straight path, the "Sirat-al-Mustaqeem.

01:25" It must be adopted by every person who is a Muslim. Sharia, And this is the path upon which our worldly and afterlife success depends, so we say that if we want Complete success

01:52through Sharia principles, including spiritual, social, and economic aspects , then all our worship, social activities, and economic activities of earning and spending are guided by Sharia or Sharia principles. In terms of terminology, Sharia is the body of Islamic religious law, also called religious laws, rules, principles, or

02:20parameters. But it goes beyond law, as it regulates both the public and private aspects of life, because it guides our family life, personal life, and spiritual life, as well as our public life, whether social, economic, financial, or political. Sharia is the totality of religious, political,

02:48domestic, and private life by covering all these dimensions. It covers every single aspect and dimension of our lives. Regarding Sharia, in Chapter 45, verse 18, Allah, the One without partners, states that Allah has granted you a Sharia, in which it is commanded that you follow the commands given by

03:17Allah and the practices of the Prophet Muhammad (peace be upon him), and it is forbidden to do what those did who were completely ignorant, inactive, and unlearned. It means that with the Prophet (peace be upon him) and the state of a commandment, you follow and

03:40you do not follow. Do not, so those who do not know, their path is not to be followed, one must avoid them, and we must act upon the commands that Allah, the One without partners, has given.

03:57From a Muslim Islamic perspective, a Muslim opinion is that Islamic Law is the Quran, and this is the Quran, followed by Hadith or Sunnah, the beloved life of the Holy Prophet (peace be upon him), then Ijtihad, a combination of two things: one is Ijma,

04:23and the other is Qiyas. So, the normal composition of Sharia, which includes our principles and commands, has its basic source in the Holy Quran. It is gifted and given by Allah Almighty, and it is a part of the knowledge of Wahi ( revelation). The second thing is, well, the Holy Quran contains all the commands that Allah, the One without partners, delivered to us through Prophet Muhammad (peace be upon him).

04:56And as a Muslim, you have to follow the instructions; there is no excuse, no pretext, no justification, or argument against them; they are all applicable, and we need to follow them in our social and economic life. After that is Sunnah, the life of the Holy Prophet ( peace be upon him), and its best example, which we know as Uswa-e-Hasana

05:22or Sunnah-e-Nabawi. Thirdly, the third option Muslims have received is Ijtihad , which consists of Ijma and Qiyas, meaning that if there is a matter—a contemporary issue, emerging problems, or concerns—for which we cannot find proper guidance from the Quran and Sunnah, we seek a solution for it in the light of the Quran and Sunnah, which has two possibilities: Ijma.

05:49Qiyas. Allah, the One without partners, states in Chapter 3, verse 19, that " Indeed, the religion in the sight of Allah is Islam," and therefore Allah has commanded that you must follow Islam. In another place, in Chapter 5, Surah Al-Ma'idah, verse 3, Allah

06:16Almighty says, "Today I have perfected for you your religion.""And have completed My favor upon you." And Allah Almighty has chosen for us Islam as a way of life. Allah Almighty tells us— this verse was likely revealed to the Prophet (PBUH) during the Farewell Pilgrimage—that on this day, Allah

06:45says, I have perfected My religion for you. And I have completed My favor upon you, and I have chosen Islam as your religion. If you speak about Islamic Sharia, its basic principles, or its sources, I have tried to develop that connection for you here. The foundation

07:12is the Holy Quran, then we connect it with the Sunnah, which is the Hadith— the blessed life of the Prophet (PBUH) —and Ijma, which is also called consensus; when scholars and jurists in any era gather to solve an issue, it is termed as consensus or Ijma. Qiyas, or analogy, is analogical reasoning based

07:39on which we derive a conclusion, and in the light of the Quran and Sunnah, our main focus is to provide a solution for matters. Basically, we have two major sources. One primary source which is the foundation, and the other can be called a secondary source. The primary source can be divided into two parts: one, the Holy Quran, and two, the

08:07Sunnah. So, the Holy Quran provides us with the basic principles and guidelines; the rules and parameters are what Allah, the One and Only, has told us in different places throughout the Quran. I have listed a few of these things; Islam says that you must engage in lawful, Halal matters, and avoid everything that is unlawful, as those things are prohibited and discouraged.

08:36Regarding spending, Islam says that you must practice moderation and adopt a balanced approach. Allah Almighty instructs us that for all business affairs, economic transactions, financial dealings, or loans, you must keep a record and put them in writing.

08:57All transactions must be put in writing so that if any ambiguity, confusion, or conflict emerges, that written record will help and support you. Allah Almighty has forbidden us from interest , usury, and gambling, and has declared them Haram. Trade with mutual consent, that commerce is what Allah Almighty told us in Chapter 4, Verse 29, to seek the bounty of Allah and trade with one

09:24another, but with mutual consent—with mutual agreement. The obligation to pay Zakat, so that those who are less fortunate or struggling with low income —the wealthy, those who meet the Nisab threshold—are commanded to pay 2.5 percent as Zakat, and this is mandatory. The Law of Inheritance; for those who pass away, their heirs are the inheritors. Allah Almighty has set

09:53very clear principles in Surah An-Nisa regarding inheritance, defining the shares for the father, mother, daughter , wife, brother, and everyone—every son and daughter—all their shares have been prescribed. Next, the injunction to promote wealth circulation; to prevent the hoarding of wealth, you should not accumulate it, but rather bring it into the mainstream , increase its flow, perform transactions, and keep it in

10:19circulation. Speaking of the Sunnah, it consists of three parts: first, the sayings of the Prophet (PBUH); second, his acts and practices; and third, his tacit approval, which is the "Taqriri" aspect—events that occurred in his presence where he either remained silent, offered guidance, or forbade

10:43them, which we call tacit approval. So, the sayings, acts, and tacit approvals —meaning verbal, practical, and approval-based—all these matters are documented in the six authentic books of Hadith from which we can seek guidance. The major primary source is the Quran. Among the secondary sources, are a couple of sources including

11:12Ijtihad, the application of Ijma, Qiyas , and authorities, especially regarding interpretation. Including the Fiqh Academy of the OIC, Islamic scholars, schools of thought, and currently, contemporary ones. There is what we call AAOIFI—the Accounting and Auditing Organization for Islamic Financial Institutions—which guides IFIs, provides Shariah standards,

11:39offers accounting mechanisms, and guides us regarding audits and their continuity. We also have schools of thought, which include five schools: Hanafi, Maliki, Hanbali, Shafi'i, and Jafari. We can talk about Shariah advisory boards and committees; when we talk about our commercial or corporate entities, our IFIs, the first key

12:07concept is Shariah compliance—that is , adhering to the Shariah limits, the Hududullah, ensuring Shariah compliance . The compliance certificate, which is called a Fatwa, is required by the product development team to follow.

12:23Instructions from the Holy Quran and Sunnah, and Ijtihad, which also includes Ijma and Qiyas, and Fatawa. Also come under this. After the working product development team, if we talk about the role and composition of the Shariah Supervisory Board or Committee, for all IFIs, it is mandatory by law that they have Shariah advisors, Muftis , and authentic religious scholars to seek their guidance. They should take

12:51their guidance and ensure that all their products, operations, and services are Shariah-compliant. You ensure Shariah compliance starting from the organizational, country, to the global level. So Islam, Islam is a universal religion; it is not limited to any state, any country, or any province; it is universal and has beneficiaries across the globe.