Contemporary Interpretations of Islamic Banking: A Comparative and Critical Study of the Thought of Mufti Muhammad Taqi Usmani and Hafiz Abdul Salam Bhutvi
Abstract
This research article presents a comparative and critical study of the views of two prominent scholarly figures of the Indian subcontinent regarding contemporary Islamic banking: Mufti Muhammad Taqi Usmani and Hafiz Abdul Salam Bhutvi. In the modern era, the rapid expansion of the Islamic financial system has generated numerous juristic and economic debates. The primary objective of this study is to investigate whether contemporary Islamic banking is merely a collection of formal legal stratagems (form) or whether it is genuinely aligned with the objectives of Islamic law (maqasid al-shariah) in substance.For this purpose, a qualitative and analytical research methodology has been adopted, and the primary sources of both scholars have been examined directly.The findings of the study reveal that Mufti Muhammad Taqi Usmani’s methodology is based on the concepts of a “transitional period” and “juristic flexibility,” according to which he considers the use of murabahah, ijarah, and the Karachi Interbank Offered Rate (KIBOR) permissible under conditions of necessity. In contrast, Hafiz Abdul Salam Bhutvi, relying on the principles of sadd al-dharai (blocking the means to prohibited ends) and maqasid al-shariah, offers a strong critique of these practices. In particular, he regards late payment penalties directed to charity (charity on default) and binding promises as mechanisms that effectively produce interest-based outcomes and thus constitute legal devices to circumvent the prohibition of riba.The article concludes with the recommendation that, in order to restore the true spirit of Islamic banking, a practical transition is essential from debt-based financing toward partnership-based contracts (musharakah and mudarabah), along with the development and adoption of an independent Islamic benchmark.
Keywords: Islamic Banking, Maqasid al-Shariah, Deferred Murabahah, Mufti Muhammad Taqi Usmani, Hafiz Abdul Salam Bhutvi, KIBOR, Legal Stratagems (Hiyal Shariyyah).
https://doi.org/10.5281/zenodo.21787022
