The Objective of Islamic Economic and Banking System

Article 1 The direction of Islamic economics emerged since the prophetic period from the practice of Prophet Muhammad as an entrepreneur. His life and the companions that surrounded within the parameter of this business culture as guided by the Holy Qur’an. Nevertheless, the formal discussion of the discipline is rarely discussed in the previous conventional economic system. In order to serve the responsibility as a khalifah, Muslims practice a just economic system to achieve the objective of Shariah, as oppose to embracing economy as the object of the process. Three basic conception of economics which indirectly relate the conception to the objective of economics in Islam, firstly, Allah created body and soul for all creatures and particularly to mankind which are similarly important in the fulfillment of human biological life. The second concept is the oneness of God – Allah bearing objective. All the life and fulfilments are mainly toward His blessings. And the third concept is comprehensive integration of various stems of Islamic system of life. The objectives of Islamic economics are supposed to guide the objective of Islamic banking and Finance. There are four goals of Islamic economics in prevailing the values and holistic purpose of this system. The four are to achieve the economic well-being within the framework of the moral norms of Islam, to uphold universal brotherhood and justice, to attain equitable distribution of income and to accomplish freedom of the individual within the context of social welfare. The objectives of Islamic economics have been divided into philosophical-based objectives and operational-based objectives. The philosophical-based objective is more towards vertical type relationship which exists in the representation of the word “al-falah”. Operational-based objective have been classified into six themes namely as economic-based objective, social-based objective, justice-based objective, self-based (inner-self) objective,