Review Of Some Historical Facts And ‘Rulings’ On Ḥiyal And Their Practice In The Contemporary Islamic Banking Sector

By Shafiq ur Rahman, 

Abstract

The era comprising circa two hundred years i.e. 18^th and 19^th centuries is the most dormant period in the entire Islamic History in which the work on Sharīʿah Law had almost come to a total halt. It started with the Muslims politically declining and Western nations rising to the leading role. This gradual process not only affected the Muslim nations politically, but also on academic and literary levels as well. Islamic Law, inter alia, was also subject to certain changes. After remaining away from the scene for considerable period, the re-emergence of the Sharīʿah has been observed in the shape of Islamic banking and finance. There may, however, be certain issues with regard to the compliance of the Islamic banking and finance with the basic Sharīʿah. One of the issues is the assertion that the Islamic Banking and finance is based on Hīlah. This paper explores some factors which might have affected the evolution of the Sharīʿah Law during the preceding circa two centuries prior re-emergence in the shape of Islamic Finance. The paper reviews pioneer work which paved the way for transition to changes in concepts and other developments in the Fiqh during recent centuries. The author concludes that Hiyal as a whole are neither absolutely prohibited nor permitted totally. Hence the present practices of the Islamic Banking and finance can neither be construed to be Hīlah-based nor devoid of the same. The paper recommends that the Sharīʿah Advisors in the respective Islamic Finance should endeavour to avoid indulging in the transactions that tend to be based on ʿĪnah, organised tawarruq or other similar kinds of modes offered in their dealings. They should also practically and physically oversee, monitor and audit all the projects offered by their respective institutions at each stage.