Can Shariah compliance be just a checklist without true intent?

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Shariah Compliance May Fall Short of Intended Outcomes if Treated Merely as a Checklist

The current understanding and application of Shariah compliance in Islamic finance may be insufficient, as it is increasingly expected to extend beyond mere structural permissibility to encompass the intended welfare outcomes, known as maqasid. While ensuring a transaction's structure adheres to religious law is the foundational requirement, this alone may not guarantee that the finance's ultimate impact promotes broader societal well-being and produces wholesome results. This suggests a potential gap between fulfilling the literal requirements of Islamic law and achieving its underlying spirit.
The "Double Patty" Analogy for Islamic Finance

The concept of Shariah compliance is being likened to a double cheeseburger, where one patty represents the basic structural permissibility, ensuring the transaction is lawful according to Islamic principles. This includes avoiding prohibited elements like interest (riba), gambling (maysir), and ensuring correct contractual sequences. However, a second, more substantial patty is now expected: one that ensures the financial activity's outcome actively promotes welfare and yields something wholesome (tayyib). This dual expectation signifies a move from a purely compliance-driven model to one that also prioritises the ethical and beneficial impact of financial activities.
Beyond Permissibility to Promoting Welfare

Discussions among industry participants indicate a growing sentiment that simply being Shariah-compliant may no longer be enough to attract broader support. Some suggest that framing Islamic finance as 'ethical' finance might resonate more effectively, highlighting a potential disconnect where adherence to the letter of the law does not necessarily translate into achieving the law's intended beneficial purposes. This mirrors Adam Smith's distinction between justice, which prevents harm, and beneficence, which actively promotes good. While justice (akin to a Shariah compliance checklist) ensures basic fairness, beneficence is crucial for society to truly thrive, implying that Islamic finance needs to move beyond preventing harm to actively contributing to human flourishing.
The Risk of Maqasid Becoming Another Checklist

There is a concern that the pursuit of maqasid could itself become another superficial checklist, where companies merely tick boxes and publish reports without fundamentally altering their practices. This would add another layer of documentation but not necessarily imbue the finance with greater substantive value or align it more deeply with the Shariah's original intent. Instead, the article advocates for a first-principles approach, where Islamic finance is designed from its inception to achieve the Shariah's intended ends, rather than adapting existing practices through analogy. This ensures that the foundational permissibility also leads to outcomes that are genuinely worthy of investment due to their positive impact on human welfare.

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Can Shariah compliance be just a checklist without true intent?

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