Syed, Ehsanullah Agha and Omar, Mustafa,(2017), Hiyal in Islamic finance: a recognition of genuine economic need or circumvention of Riba? , Qualitative Research in Financial Markets, UNSPECIFIED
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Abstract
Purpose – This paper aims to develop a Sharīʿah framework for using � hiyal in Islamic finance. � Hīlah
(singular of � hiyal) is an Islamic juristic term which refers to the application of acumen and ingenuity to avoid
hardship in one’s commitment to Islamic rulings. It has been used as a legal device in Islamic jurisprudence to
actualize a legitimate objective. Particularly, it plays a significant role in financial engineering, as it alleviates
financial predicaments with remedies.
Design/methodology/approach – The study adopted qualitative method of research by using content
analysis approach. Inductive reasoning is applied to drive legal provisions from Sharīʿah sources that would
be used as basic principles to develop an objective measure for using � hiyal in Islamic banking and finance.
Findings – This study attempted to identify the distinctive features of legitimate � hiyal for the purpose of
developing a Sharīʿah framework. It is observed that a �hīlah would be considered permissible in Islamic finance if it
meets the prescribed criteria of (1) Sharīʿah objectives, (2) user’s motivation, (3) means, (4) benefit and (5)
concessionary rules. This proposed framework may serve as an ‘objective measure’ that will determine whether a
� h
īlah based financial engineering aims to actualize a genuine economic need or to circumvent the prohibition of ribā.
Practical implications – The proposed standard of � hiyal will enable Sharīʿah advisors, economists,
financial engineer, legal experts and policy makers to develop comprehensive guidelines for using � hiyal in
Islamic financial engineering.
Originality/value – Islamic financial institutions rely heavily on � hiyal to operate in a predominant
conventional financial system. The application of these legal stratagems in Islamic finance has been the center
of an intense debate between Islamic economists and jurists. The former argues that over-reliance on � hiyal not
only divorces morality from technicality but also defeats the noble purposes of Islamic economics. This paper
provides a synthesis of the diverse views on the subject to facilitate a minimum level of convergence among
scholars on the permissibility of � hiyal.
Keywords : | Islamic finance, Hiyal, Legal stratagem, Riba, UNSPECIFIED |
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Journal or Publication Title: | Qualitative Research in Financial Markets |
Volume: | 9 |
Number: | 4 |
Item Type: | Article |
Subjects: | Ekonomi Islam |
Depositing User: | Users 15 not found. |
Date Deposited: | 19 Dec 2019 07:13 |
Last Modified: | 19 Dec 2019 07:13 |
URI: | https://repofeb.undip.ac.id/id/eprint/423 |