Redefining Asnaf Fi Sabillah: Contemporary Interpretations and Zakat Distribution Practices in Islamic Banking and Finance Institutions (IBFIs)

Abstract

This study examines the contemporary interpretations of asnaf fi sabillah in the context of Islamic Banking and Finance Institutions (IBFIs) and their zakat distribution practices. The research explores the evolution of fi sabillah interpretation from its classical, primarily military-focused understanding to its broader, more inclusive modern conceptualizations. Through a comprehensive literature review encompassing institutional practices, ijtihad fatwa, and academic studies, the research identifies significant variations in interpretation and application across different Islamic jurisdictions and schools of thought. The study employs a qualitative methodology, including library research and expert interviews, analyzed through both qualitative and thematic approaches. A theoretical framework integrating Maqasid al-Shariah, Maslahah Theory, and Islamic Finance Development Theory is utilized to evaluate various interpretations and their alignment with Islamic principles and contemporary needs. The research reveals a general trend towards broader interpretations of fi sabillah that encompass educational, social, and economic development activities. However, it also highlights ongoing debates and disagreements regarding the scope and application of this concept. The study identifies several research gaps, particularly concerning the specific role of IBFIs in interpreting and applying fi sabillah in their zakat distribution strategies. Based on these findings, the research proposes guidelines for IBFIs in channelling zakat to fi sabillah recipients, emphasizing the need for balanced distribution, prioritization of core zakat objectives, and alignment with Maqasid Shariah. These guidelines aim to ensure that zakat distribution through the fi sabillah category contributes effectively to the development of Islamic banking and finance while adhering to Islamic principles and addressing contemporary socio-economic challenges. The study concludes by highlighting the importance of continued scholarly discourse and ijtihad in adapting Islamic financial practices to modern contexts