Choudhury, Masudul Alam,(2018), The ontological law of Tawhid contra ‘Shari’ah-compliance’ in Islamic portfolio finance. , International Journal of Law and Management, UNSPECIFIED
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Abstract
Purpose – The purpose of this study/paper is the generalized ontological law of monotheism (unity of
knowledge) and its functioning in the financial world system is summarized and contrasted with the recent
conception of “shari’ah-compliance”. Thereby, some specific rulings of shari’ah-compliance in Islamic finance
are critically annulled. The principal problem of the inability of shari’ah-compliance in the formalism of ratesetting
and debt cancellation is pointed out in analytical ways. The alternative valuation models in the light of
the Tawhidi ontological law are formalized. Many important issues are examined in analytical and Tawhidi
authentic ways of Islamic law contra to shari’ah-compliance.
Design/methodology/approach – The epistemological approach commencing from the Tawhidi
ontological law is used as the premise of developing analytical formalism to counter the irrelevant
rulings done by the field of shari’ah compliance. Thereby, endogenous moral and ethical foundations
are studied in deriving analytical finance models of asset valuation, rate-determination and debt
cancellation.
Findings – Substantive analytical results are derived for intellection in the area of the primal ontological
law of Tawhid that negates many of the rulings framed up in shari’ah-compliance area of Islamic law. These
results can guide financial academia, practitioners and policymakers.
Research limitations/implications – The paper can be expanded subsequently to the area of
analytical Islamic finance in general by further investigating the Modigliani and Miller theorem on optimal
debt-equity structure of corporate finance. An introduction to this study is provided in this paper as a starting
point of dealing with the debt problem of shari’ah-compliance.
Practical implications – The paper presents important guidance as input for the rulings of shari’ahcompliance
idea held by shari’ah advisory boards and similar institutions presently operating at the financial
level.
Social implications – The paper presents a subtle transformation of the social and financial order in the
light of the Tawhidi ontological law quite differently from the way that shari’ah-compliance envisions.
Originality/value – The theoretical and projected applied perspectives in analytical finance presented in
this paper provide a methodological worldview for all areas of social finance with ethical consciousness. Such
analytical approach is much needed today in the reconstruction of global finance in the scale of ethics and
away from the sole focus on capital market efficiency.
Keywords : | Islamic epistemology, Critique of Islamic Shari’ah-compliance idea, Islamic financial modeling, UNSPECIFIED |
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Journal or Publication Title: | International Journal of Law and Management |
Volume: | 60 |
Number: | 2 |
Item Type: | Article |
Subjects: | Ekonomi Islam |
Depositing User: | Users 15 not found. |
Date Deposited: | 26 Dec 2019 06:08 |
Last Modified: | 26 Dec 2019 06:08 |
URI: | https://repofeb.undip.ac.id/id/eprint/841 |