The Implications of Contemporary Financial Transactions in Islamic Banks: An Applied Fiqh Approach

There is a growing controversy regarding the permissibility of many transactions in Islamic banks, which Muslims have embraced as an alternative to conventional banking system that deals with usury and other impermissible transactions according to Sharia. In Islamic law, the basic principle is that all transactions are permissible unless a particular transaction is proven to be impermissible by a divine text prohibiting the transaction, or impermissible elements having to be involved in the transaction. To solve this dilemma urges a sincere study to identify the factors affecting the permissibility of transactions in Islamic banks. Having little written on the subject (even though I have not come across any), this thesis aims at reaching this goal under the title "Factors invalidating Contemporary Financial Transactions in Islamic Banks: a Fiqh approach within an applied frame". The research comprises of an Introductory chapter, four other chapters, and a conclusion. The introductory chapter includes the research problems, objectives, questions, methodology, and literature review. Chapter one discusses the factors that legally invalidate transactions in general. In the subsequent chapters I discussed the sources of funds, financial transactions, and services rendered by Islamic banks, while pointing out at the factor(s) affecting the legality (permissibility) of each item. I then concluded my research with findings and a suggestion.