Ḥīlah (stratagem) and its implications on contemporary Islamic financial contracts

Busari, Saheed Abdullahi and Zakariyah, Habeebullah and Mikail, Sa'id Adekunle (2026) Ḥīlah (stratagem) and its implications on contemporary Islamic financial contracts. International Journal of Fiqh and Usul al-Fiqh Studies, 10 (2). pp. 147-162. E-ISSN 2600-8408

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Abstract

This paper explores "ḥīlah" (legal stratagem) within modern Islamic financial contracts, tracking its evolution from classical roots to contemporary banking applications. A major issue today is the deep divide among scholars over these mechanisms, driven by a growing gap between formal contract paperwork and real economic impact. To this effect, this study examines how financial stratagems play out in practice, reviews recent fatāwā, and outlines the strict boundaries, like actual asset risk and independent contracts, needed to tell legitimate financial design apart from deceptive loopholes. Using a qualitative doctrinal method, our analysis shows that while Islamic finance has developed sound, Sharīʻah-compliant alternatives to replace usurious transactions, careful juristic assessment (takyīf fiqhī) and consistent global oversight are still essential. Financial institutions must go beyond simple compliance checkboxes and align their operations with the broader goals of Islamic law (maqāṣid). This research recommends the urgent need for separate constructive legal tools that protect the market from manipulative tricks that exploit loopholes. While instruments like murābaḥah, takaful, and sukūk can serve genuine business needs ethically, structures designed merely to disguise interest or avoid religious obligations compromise the entire system and highlight the urgent need for tighter oversight. By grounding modern banking practices in established legal maxims, this study provides Islamic finance professionals and regulators with a clear roadmap to navigate complex product engineering without sacrificing the ethical core of Sharīʻah principles

Item Type:	Article (Journal)
Uncontrolled Keywords:	Ḥīlah, Contemporary Applications, Islamic Finance, Islamic Contracts
Subjects:	BPH Islamic Economics > BPH321.5 Bay’ Al-‘Inah- Loan In The Form Of A Sale BPK Islamic law. Shari'ah. Fiqh > BPK36 Islamic law (General) > BPK78 Usul al-fiqh > BPK109 Sources of Islamic law > BPK121 Ijtihad > BPK125 Applicability of Ijtihad. Instances of application
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF) Kulliyyah of Islamic Revealed Knowledge and Human Sciences > Department of Fiqh and Usul al-Fiqh
Depositing User:	Dr. Saheed Abdullahi Busari
Date Deposited:	13 Aug 2026 11:56
Last Update:	13 Aug 2026 11:56
Queue Number:	2026-08-Q4705
URI:	http://irep.iium.edu.my/id/eprint/130749

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