Sharia Framework for Islamic Banking
This domain tests your command of the sources and secondary tools of usul al-fiqh, and your ability to test a contract against the conditions of Islamic commercial law.
Sources
- Quran - the primary text; roughly 500 verses carry legal content.
- Sunnah - the Prophet's words, acts and approvals; a decisive (qat'i) hadith outranks a speculative one.
- Ijma - consensus of qualified jurists of a generation.
- Qiyas - analogy, extending a ruling to a new case sharing the same effective cause ('illah).
Secondary: istihsan (juristic preference), maslaha mursala (public interest), 'urf (custom), istishab, sadd al-dhara'i (blocking lawful means to unlawful ends), darura (necessity).
Conditions of validity
- Lawful object and purpose (halal).
- Free consent; no duress.
- Certainty of price and subject matter.
- Ownership and possession before sale - the hadith "do not sell what you do not own" (Tirmidhi).
- No riba, gharar or maysir.
- Profit follows liability (al-kharaj bil-daman).
- No two contracts in one, and no loan tied to a sale.
Worked example
A bank wants a loyalty bonus for early repayment. The 'illah test: the bonus is an increase linked to the debt, so it is riba, even if voluntary and called a discount. A permissible alternative is a documented charitable penalty (gharamah) on late payers, paid to charity and never to the bank's income, with SSB approval.
Traps
Qiyas is analogy and one of the four roots; istihsan is a secondary principle of preference. A fatwa is an opinion, not legislation. 'Urf may shape contract interpretation but never overrides a clear text.