Application of Modern Collective Ijtihād Approach in Islamic Banking: Analysis of AAOIFI's Juristic Methodology
DOI:
https://doi.org/10.33102/uij.vol36no02.614Keywords:
Collective ijtihād, AAOIFI, Juristic methodology, TalfīqAbstract
The Islamic Banking industry has observed many disputes regarding the legality of the sharī῾ah status of different products due to the contradictions in different schools of thought. That created the need to standardize and harmonize the industry's sharī῾ah practices. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has done tremendous work in standardizing and harmonizing different opinions of different schools. It designs products according to the needs and practices of the industry in a sharī῾ah-compliant way. Its sharī῾ah standards are developed through a rigorous and professional process. They are widely accepted globally in the Islamic banking industry. The development of the sharī῾ah standards is based on the application of the collective ijtihād approach. This collective ijtihād approach is not limited to a specific school of thought. Instead, it has benefited from all the schools and harmonized them, making it a unique collective ijtihād approach. Hence, to find AAOIFI’s collective ijtihād approach, the study objective is to extract the juristic methodology of AAOIFI sharī῾ah standards. The method used for the analysis is qualitative content analysis. A sample of six standards from the 57 standards is selected based on purposive sampling. The coding is done on these six sample standards to deduce the embedded themes and categories related to the juristic methodology applied by AAOIFI. The findings were further verified by interviewing five experts. Therefore, the data analysis through coding and validation through experts’ opinions, the study found that AAOIFI’s juristic methodology is lenient, flexible, maintains equilibrium, avoids injustice and is not confined to a specific school of thought. Further study is recommended to analyse the criteria on which AAOIFI prefers one opinion over others among the schools. The study's results are expected to enhance the adoption of the AAOIFI’s collective ijtihād approach, globally, which will improve the standardization of the fatwa’ practices in the Islamic banking industry.
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