The Role of Maqasid al-Shariah in Product Development within Islamic Financial Institutions in Pakistan: Perspectives of Shariah Scholar

Abstract

Islamic banking aims not only to replicate the standard financial services by means of permissible contracts but also to achieve the ethical, social, and economic goals of Shariah. That said, there are still concerns that Islamic financial products are assessed mainly on the basis of contractual compliance, with only a limited and systematic attention given to justice, welfare, transparency, the protection of wealth, financial inclusion, and actual economic value. This qualitative study looks at how Shariah scholars understand and apply the Maqasid al-Shariah in the development of Islamic banking products in Pakistan. It uses an interpretivist approach that is informed by phenomenology and examines semi-structured interviews with six anonymised participants who were selected using purposive criterion sampling. The data were analysed through reflexive thematic analysis and four main themes came to light: that the Maqasid represent the underlying purpose of Islamic banking; the gap between the normative ideals and the present state of product development; the influence of institutional and commercial constraints on the Shariah scholars; and the need to incorporate the Maqasid into all stages of the product development process. Most of the participants made a distinction between formal Shariah compliance and the actual fulfilment of the Maqasid, although a small number believed that true compliance inevitably leads to the attainment of Shariah's higher objectives. The participants suggested that scholarly involvement should take place at an early stage, that interdisciplinary capacity should be developed, that Maqasid-based assessment criteria should be introduced, that regulatory bodies should take a leadership role, that impact should be documented and that post-launch monitoring should be carried out. The study concludes that the Maqasid should supplement rather than substitute for contractual validity and should be applied as a framework for evaluation at both the pre- and post-implementation stages. The findings provide a process-oriented framework for regulators, Shariah boards, management, and product developers who wish to enhance the ethical authenticity and social relevance of Islamic banking in Pakistan.