Bait al-Mal as a Source of Central Financing for Business

Abstract

Islam, grounded in the essence of nature, offers a comprehensive rationale for addressing the diverse needs of humanity in both the temporal and spiritual realms. Within this worldview, economics stands as intrinsic to the world as the soul is to the body. Islam meticulously lays down rules for business, encompassing micro and macro levels, guiding individuals and society through principles of mutual cooperation, security, ethical values, and obligations embedded in its way of life. Acknowledging economic effort as an inevitable historical reality crucial for poverty eradication and progress, Islam emphasizes the indispensable role of funding and financing in any business activity. The concept of a State Bank, delineated in the holy Quran, with details spanning its establishment, jurisdiction, rules of business, and services, reflects the foresight in ensuring economic continuity, leaving evolving issues to the wisdom of Islamic jurists. The Islamic code not only imparts moral guidance at the individual level but also furnishes religious injunctions, examples, and practices for the Ummah. Rooted in history, the State Bank's inception during the Prophet's life in Madina and subsequent organizational refinement during Hazrat Umer RA's reign positions it as a guardian to the populace, comparable to a father to his offspring. In contemporary Muslim society, the State Bank, along with public sector banks under its purview, plays a pivotal role by providing loans for business promotion, contributing to poverty alleviation, economic rejuvenation, and national income augmentation, thus serving as a bulwark against economic collapse in both realms. This research endeavors to elucidate the rules of business, the State Bank's role, and impact through a multifaceted analysis encompassing legal, academic, and Shariah-based perspectives, grounded in the teachings of the holy Quran, Sunnat, the opinions of Muslim jurists, and a consideration of contemporary issues and universal realities, culminating in comprehensive findings, discussions, future recommendations, suggestions, and conclusive insights.