Maqasid Al-shariah In Ijarah (leasing) Contract Of Islamic Banking System

The operating ijarah and ijarahfinancing are currently generating interest among the Islamic banks, investors, customers and even policy makers due to their less risk overloads and better profits to the public. This paper attempts to highlight the benefits of applying the Islamiclegal objectives (Maqasid Al-Shari’ah) in ijarahcontract, and how a strict compliance to the latter can help manage Shari’ah, business and distribution of wealth in the society. The paper discusses the impact of Muslim scholars in applying ijtihadand analogical deduction to fashion out the appropriate ruling in respect of the issues, by putting into consideration what would be the best interest of Islam and Muslim community as a whole. It also discusses the consent of the contracting parties as one of the conditions validating the ijarahcontract, and as a supplement to the objective of avoiding injustice and embezzlement of another person’s wealth. The paper explains how the profit made and the risks incurred, if any, are shared between the parties involved in ijarahtransaction which are proportionally shared according to what has been earlier agreed upon.

Keywords: ‘Ijarah, Maqasid al-Shari’ah, Islamic banking, ijtihad,distribution of wealth