ISLAMIC BANKING
Background Banking Institutions Banks are financial institutions built on the basis of
trust. Banks also in their operational funding mostly come from the community. The funds
collected from the community turned out to be the largest source of funds used by the bank. The
achievement reaches 80-90% of all funds managed by banks. Every level of society that saves its
money must be absolutely sure of the safety of the money entrusted to certain banks and within
a certain period of time. In raising funds, the bank provides several products to meet the needs
of the community and the demands of the increasingly sophisticated times] with modern
technology as well as competition in the global world. In addition, these products aim to improve
people's welfare and wealth storage, so banking services are needed to fulfill them. Such as the
products that raise funds, namely: current accounts, savings, and deposits. However, in
practice, it turns out that not everything can be justified by Islamic law, therefore it needs to be
understood more deeply so as not to violate Islamic law that has been established for the sake
of the fame of mankind. Of the three fund-raising products provided by banks, in this paper, the
author will explain further about current accounts and savings based on sharia, which then the
author hopes that from the completion of this paper, hopefully it can be as useful as possible.
History of Sharia Banking Currently, there are many Islamic banks developing. Islamic banks
emerged in Indonesia in the early 1990s. The initiator of the establishment of Islamic banks in
Indonesia was carried out by the Indonesian Ulema Council (MUI) on August 18-20, 1990.Islamic
banks are banks that operate in accordance with Islamic sharia principles, meaning banks that
in their operations follow the provisions of Islamic sharia provisions, especially those related to
the procedures for believing in Islam. justice, and togetherness. Efficiency refers to the principle
of helping each other synergistically to obtain the greatest possible profit. Fairness refers to a
relationship that is not rigged, sincere,
with mature approval of the proportion of its inputs and outputs. Togetherness refers to
the principle of offering each other help and advice to increase each other's productivity. The
activities of Islamic banks in terms of determining the price of their products are very different
from conventional banks. The determination of prices for Islamic banks is based on an
agreement between the bank and the depositor customer according to the type of deposit and
the term, which will determine the size of the profit-sharing portion that the depositor will receive.
The following are the principles that apply to Islamic banks. a) Financing based on the principle
of profit sharing (mudharabah). b) Financing based on the principle of capital participation
(musharakah). c) The principle of buying and selling goods by obtaining profits (murabahah). d)
Financing of capital goods based on pure lease without option (ijarah). e) Option to transfer
ownership of goods leased from the bank by another party (ijarah wa iqtina). In order to carry out
its activities, Islamic banks must be based on the Quran and hadith. Islamic banks prohibit the
use of the price of their products with certain interest. For Islamic banks, bank interest is usury.
In its development, the presence of Islamic banks is not only carried out by the Muslim
community, but also by the non-Muslim community. Currently, Islamic banks have spread
across various Muslim and non-Muslim countries, both in the Americas, Australia, and Europe.
In fact, many world companies have opened branches based on sharia principles. Examples of
Sharia Banks in Indonesia are Bank Muamalat Indonesia, Bank Syariah Mandiri. In addition to
Conventional Banking, in Indonesia there are also Sharia Banks starting in 1992. The first Sharia
bank in Indonesia was BMI (Bank Muamalat Indonesia) which began operating on May 1, 1992.
Islamic banks exist because of the desire of Muslims for kaffah, namely carrying out banking
activities in accordance with the sharia that is believed, especially the issue of the prohibition of
usury, as well as matters related to economic norms in Islam such as the prohibition of maisyir
(gambling and speculative), gharar (elements of ambiguity), jahala and the need to pay attention
to the halalness of the way and object of investment The Qur'an prohibits usury, including: a. Al-
Baqarah : 278-279 "O you who believe, worship Allah and leave the rest of the riba (that has not
yet been collected) .............. And if you repent (from taking usury), then for you the principal of
your wealth, you do not persecute and are not persecuted." b. Ali-Imran: 130 "O you who believe,
do not eat riba doubling and devote yourself to Allah so that you may benefit." An-nisaa: 130"
............ And because they eat usury, when indeed they have forbidden it and because they eat
people's wealth in a way................" d. Ar-ruum : 39 "And a riba (addition) so that it may be added
to the wealth of man, then on the side of Allah it does not increase........" In addition to the Qur'an,
the prohibition of usury is also contained in the hadith of the Prophet PBUH. The development of
Sharia banks in Islamic countries (Egypt: Mit Ghamar Bank, Islamic Development Bank, Faisal
Islamic Bank, Kuwait Finance House, Dubai Islamic Bank, etc.) has an impact on Indonesia.
Discussions or workshops were held until finally the MUI Banking Team signed the Deed of
Establishment of PT Bank Muamalat Indonesia on November 1, 1991.The development of Islamic
banks in the reform era was marked by the approval of Law no. 10 of 1998. The law provides
directions for conventional banks to open sharia branches/sharia business units (UUS) or
convert into sharia banks. A system that i
ncludes the distribution of business results between financiers and fund managers. For
example, between Islamic banks and depositors of funds and between Islamic banks and
customers who receive funds. The contract used can use mudharabah contracts and
musharakah contracts and so on. The profit-sharing system is a system in which agreements or
joint bonds are carried out in carrying out business activities. In the business, it is agreed that
there is a profit sharing of the profits that will be obtained between the two parties or more. Profit
sharing in the sharia banking system is a special feature offered to the public, and in sharia rules
related to the distribution of business profits must be determined first at the beginning of the
contract (akad). The amount of the determination of the profit-sharing portion between the two
parties is determined according to mutual agreement, and must occur with the willingness (An-
Tarodhin) of each party without any element of coercion. The profit sharing calculation
mechanism applied in sharia banking consists of two systems, namely: a. Profit Sharing b.
Revenue Sharing Definition of Profit Sharing and Revenue Sharing The profit sharing mechanism
is one of the characteristics or characteristics of Islamic banking, where by sharing this profit is
one of the alternatives for the business community, especially the banking community to avoid
interest or usury. This is in accordance with what is explained in the Qur'an, Surah Al Baqarah
verse 275, where Allah SWT prohibits all forms of transactions that contain elements of ribawi,
because these elements do not bring fame and can only bring evil, so as early as possible they
must be avoided. In the world of Islamic banking, you may often hear the term profit sharing or
more commonly known as profit sharing or revenue sharing. In Islamic banking, this profit-
sharing income applies to participating products, either in total, partial or in other forms of
corporations. And this profit-sharing principle will function as a partner for savers, as well as
entrepreneurs who borrow funds. So this profit-sharing principle is the main foundation for the
operation of Islamic banking. The fund fa
ctor is a basic need for the operation of a bank (financial institution). In banking that is
based on profit sharing in its operation, to obtain revenue (profit) is to finance financing with the
principle of profit sharing between investors and fund managers/debtors, where the two agree
on their respective shares of the profits obtained. The definition of Profit Sharing Profit sharing
according to Indonesian etymology is for profit. In the economic dictionary, it is interpreted as
profit sharing. Profit in terms is the difference that arises when the total revenue of a company is
greater than the total cost. In other terms, profit sharing is a profit-sharing calculation based on
the net result of total revenue after deducting the costs incurred to obtain the income. In Islamic
banking, the term that is often used is profit and loss sharing, where this can be interpreted as
the division between profit and loss from the income received from the results of the business
that has been carried out. The profit and loss sharing system in its implementation is a form of
cooperation agreement between investors and capital managers (entrepreneurs) in carrying out
economic business activities, where between the two will be bound by a contract that in the
business if profits are obtained will be
divided by both parties according to the ratio agreed at the beginning of the agreement,
and likewise if the business suffers losses will be borne jointly according to their respective
portions. Losses for financiers do not get back their investment capital in whole or in full, and for
capital managers do not get wages/results from their hard work for the work they have done.
Definition of Revenue Sharing Revenue sharing, in language revenue means incoming money,
income, or income. In banking terms, revenue sharing means the process of distributing income
that is carried out before taking into account the operational costs borne by the bank, usually the
income distributed is only income from the investment of funds, the funds do not include fees or
commissions or services provided by the bank because the income must first be allocated to
support the bank's operational costs. It means the distribution of funds to customers on the
revenues obtained by the bank without waiting for reductions in the financing issued by the bank
in the management of funds mandated by customers, on the one hand the implementation of
revenue sharing is contrary to the principle of profit sharing itself, because in the principle of
profit sharing, of course, the investor is responsible for the funds he mandates, meaning that he
also has a role in the management of his funds, Even if there is a loss in the business, Shohibul
Mall will also bear the loss. In revenue sharing, this revenue distribution process is carried out
before taking into account the operational costs borne by the bank. Usually the income
distributed is only income from the investment of funds and does not include fees or services
provided by the bank. In this mechanism, it means that it contains elements of switching the
profit-sharing mechanism from profit and loss sharing to revenue sharing, the change from risk
management to not bearing risk, although
in this mechanism it is not known how much profit will be obtained, in contrast to interest
which is clear what percentage of profit will be obtained from the amount of funds invested.
Legality of Profit Sharing and Revenue Sharing The legal provisions in the FATWA DSN MUI No.
15/DSNMUI/IX/2000 concerning PRINCIPLES OF DISTRIBUTION OF BUSINESS RESULTS IN
SHARIA FINANCIAL INSTITUTIONS are as follows: First: General Provisions 1. Basically, LKS can
use the principles of Net Revenue Sharing and Profit Sharing in the distribution of business
results with its partners (customers). 2. In terms of benefits (al-ashlah), currently, the distribution
of business profits should be based on the principle of Net Revenue Sharing. 3. The
determination of the principle of sharing the selected business proceeds must be agreed upon
in the contract. Second: If one of the parties does not fulfill its obligations or if there is a dispute
between the two parties, then the settlement is carried out through the Sharia Arbitration Body
after no agreement is reached through deliberation. Third: This fatwa is valid from the date it is
determined with the provision that if in the future it turns out that there is a mistake, it will be
changed and perfected as appropriate. Advantages and Disadvantages The advantages of the
Profit and Loss Sharing system and the Revenue Sharing system compared to the conventional
system are: 1. It is the best tool to remove interest in various short-term transactions and
financing; 2. The level of investment is higher because adequate offers are given to the funds that
can be lent, because entrepreneurs can ignore the certainty of the share of business results given
to lenders due to the uncertainty of their production results. Meanwhile, the weakness of the
profit and loss sharing system in its implementation causes various problems related to the use
of profit and loss sharing in the investment activities of Islamic banks. Based on the theory of
conportable Islamic banking, the principles of mudharabah and musharakah are used as an
alternative to the application of the profit and loss sharing system. However, in practice, it turns
out that the significance of profit and loss sharing in playing the investment operations of bank
funds plays a very weak role. According to some observers of Islamic banking, this happens for
several reasons, including: a. Moral standards There is an assumption that the moral standards
that develop in most Muslim communities do not provide the freedom to use profit and loss
sharing as an investment mechanism. b. Ineffectiveness of the profit and loss sharing financing
model Profit and loss sharing fina
ncing does not serve the various financing needs of the contemporary economy.
However, profit and loss sharing applied in the form of mudharabah and musharakah is the best
tool to remove interest in various types of short-term transactions and financing. c. Related to
entrepreneurs The relationship between banks and borrowers, the profit and loss sharing system
in helping business development is more directly involved than other systems in conventional
banks. d. In terms of costs, providing funds based on the profit sharing and loss sharing system
requires higher vigilance from banks in distributing their funds. e. From a technical point of view,
the technical problems related to the use of the profit and loss sharing system seem to be related
to the bank, the customer (partner), and the profit calculation (profit calculation). B. INSURANCE
AND REINSURANCE BASED ON SHARIA The meaning of the word insurance is taken from the
Dutch language as "assuratie", while in Dutch law it is called "varzekering" which means
coverage. This term later developed into "assuradeur" which means the insurer and the insured
are called "geassureedeur". In the concept of sharia insurance, insurance is called takaful,
ta'min, and Islamic Insurance. Takaful has a mutual bearing between human beings as social
beings. Ta'min is a word from the word "amanah" which means to provide protection, tranquility,
a sense of security, and freedom from fear. The Islamic insurance contains the meaning of
"coverage" or "mutual bearing". The term takaful was first used by Daar al Mal al Islami, an
Islamic insurance company based in Geneva in 1883. According to the Commercial Law Code
(KUHD) article 246, what is meant by insurance or coverage is an agreement (timbal bali), by
which an insurer binds himself to an insured, by receiving a premium, to provide compensation
to him, because of a loss or loss of expected profit, which he may suffer, because of an uncertain
nature. According to Law Number 2 of 1992 concerning Insurance Business, it is stated that
insurance or coverage is an agreement between two or more parties, with which the insurer binds
itself to the insured by receiving insurance premiums to provide reimbursement to the insured
for losses, damages or loss of expect
ed profits, or legal liability to third parties that may be suffered by the insured arising from
an event that uncertain, or to provide a payment based on the death or life of an insured person.
Law Number 2 of 1992 does not accommodate insurance with sharia principles. The Fatwa of the
National Sharia Council Number 21/DSN-MUI/X/2001 concerning General Guidelines for Sharia
Insurance states that what is meant by sharia insurance (ta'min, takaful or tadhamun) is an effort
to protect and help each other among a number of people/parties through investment in the form
of assets and/or tabarru' which provides a pattern of protection to face certain risks through
contracts (engagements) in accordance with sharia. The sharia contract (engagement) is a
contract that does not contain gharar (fraud), masyir (gambling), usury, zhulm (persecution),
risywah (bribery), haram goods, and vices. Development of Sharia Insurance The development of
sharia insurance cannot be separated from the development of conventional insurance that has
been developing for a long time. Insurance-like business practices have been practiced in Italy
since 2000 BC. At that time Italian merchants formed the "Collegia Tennirium", a kind of
insurance institution aimed at helping widows and orphans of deceased members. Another
society similar to the previous one was the "Collegia Nititum" whose members were purchased
slaves who were seconded to the Roman army. Each member pays a certain amount of
contributions and if one of the unfortunate (deceased) is obligated to help by using the funds that
have been collected. In pre-Islam, it is also mentioned in some Islamic legal literature that there
are activities carried out by Arab tribes that are similar to insurance activities called "aqilah".
Aqilah is a practice commonly practiced by the Arabs in that if a tribe member commits murder
against another tribe member, then the heirs of the murder victim will be paid a certain amount
of blood money as compensation given by the murderer's family. The basic idea of the concept
of aqila is that the Arabs have prepared the payment of contribution money for the benefit of the
killer as compensation for losses for the victim's heirs. The willingness to make such a
contribution payment can be equated with the payment of premiums in insurance practice, while
the current compensation, while the
compensation for the payment of a sum of money as the concept of aqila can be equated
with indemnity in the current insurance policy, as a form of financial protection for the heirs from
a death that is not expected by the victim's heirs. In connection with this, several Islamic law
experts conducted research and analysis on Islamic Sharia. The results of the study prove that in
Islamic sharia there is a substance about insurance that can avoid operational principles from
the elements of ghahar, masyir and riba. Looking at the results of the research, the idea of
establishing a sharia insurance institution arises. This idea had arisen three years before the
establishment of PT Syarikat Takaful Indonesia (1994) and grew stronger along with the birth of
Bank Muamalah Indonesia (1991). Based on this idea, the Indonesian Muslim Scholars
Association (ICMI) on July 27, 1993 through the Abdi Bangsa Foundation together with Bangk
Muamalat Indonesia (BMI) and Tugu Mandiri Company agreed to initiate the establishment of
takaful insurance by compiling the Indonesian Takaful Insurance Formation Team abbreviated
as TEPATI. The first step by TEPATI in forming insurance based on sharia was to conduct a bandi
study to Syarikat Takaful Malaysia Sendiran Berhad Kuala Lumpur on 7 to 10 September 1993.
The results of this comparative
study were seminared in Jakarta on October 19, 1993 which recommended the
immediate formation of Asuransi Takaful Indonesia. Then TEPATI formulated and compiled the
concept of takaful insurance and prepared everything needed to establish an insurance
company. Finally, on October 19, 1993, the recommendation for the new era was formed
Asuransi Takaful Indonesia. Then, TEPATI formulated and compiled the concept of takaful
insurance and prepared everything needed to establish an insurance company. Finally, on
August 23, 1994, Asuransi Takaful Indonesia was officially established. This establishment was
carried out by receipt at Puri Agung Room Hotel Syahid Jakarta. The operational license was
obtained from the Ministry of Finance through Decree Number Kep-385/KMK.017/1994 dated
August 4, 1994. PT Syarikat Takaful Indonesia has two subsidiaries, namely Asuransi Takaful
Keluarga which was inaugurated on August 25, 1994 and PT Asuransi Takaful Umum which was
inaugurated by Mar's Muhammad as Minister of Finance and B.J. Habibie as Chairman of ICMI on
June 1, 1995. PT Syarikat Takaful Indonesia has a more lucrative business scope. Camping in the
insurance sector is also engaged in leasing business, receivables, and pawnshops based on
Islamic law. In addition, there are several conventional insurance companies that open sharia
units such as MAA, Great Eastern, Tripakarta, Beringin Life, Bumi Putra, and Jasindo. The
development of sharia insurance in the future is expected to grow, along with the improvement
of world economic development, especially in Indonesia. Although there are still too few sharia
companies in Indonesia compared to the number of Indonesians who are mostly Muslims, it is
hoped that in the future insurance products with sharia value can grow and develop properly. It
is hoped that there are conventional insurance companies in their operations that not only want
profits and bona fide profits, but are willing to shift their operations to sharia principles that base
their operations on the principle of helping with perfect honesty. Legal Basis of Sharia Insurance
1. The practice of sharia insurance is not explicitly mentioned in the Qur'an, there is not a single
verse that explicitly diverts about insurance practices. The Qur'an only accommodates a few
verses that contain basic values that exist in insurance practice, such as the basic value of
helping, cooperation or enthusiasm to protect against losses suffered in the future. With this, the
practice of insurance is not prohibited in Islamic law, because the principle in the practice of
insurance in Islam is to invite the good of fellow humans. The Qur'an surah al-Maidah (5) verse 2,
Allah says which means: "... Please help you in doing good and piety, and do not help in doing
doss and transgressions. And fear Allah, indeed, Allah is very merciful to Him." The verse
expresses the command to help between fellow human beings in social life. In the insurance
sector, customers are expected to be able to give some of their money to be used as social funds
(tabarru') which are used to help one of the insurance members who has experienced a disaster.
Then in the Qur'an Murat al-Baqarah (2) verse 261, Allah SWT says which means: "The parable (of
the livelihood incurred by) th
ose who spend their wealth in the way of Allah is similar to a seed that grows seven grains,
on each grain a hundred seeds. Allah multiplies (the reward) for whomever he wills. Allah is the
Most Knowledgeable (His bounty) and the Most Knowing." The words of Allah SWT are normative
encouragement to give alms to each other in the way of Allah and carry out social activities to
help the poor and poor. The insurance practice that can be extracted from the meaning of this
verse is to pay insurance premiums that are tabard'. This is a form of infusing wealth in the way
of Allah SWT, because the payment is intended to help each other members of the insurance
association if there is a disaster in the
day. Furthermore, in Murat at-Taghabur (64) verse 11, Allah SWT says which means: "No
calamity befalls a person except with Allah's permission." In this verse Allah emphasizes that all
calamities and losses suffered by humans cannot be known for sure, when the calamity will
come and how much loss it will suffer. With this, it is appropriate for manu to try to avoid losses
and minimize those losses as little as possible. One of the cars that olch teaches religious
teachings is to multiply to Allah SWT so that there will be no calamities in this world. In relation
to the insurance business, it is expected that humans will manage the risks that occur due to the
disaster by protecting their lives and assets resulting from these losses. 2. AI-Hadith Narrated by
Muslim from Abu Harairah r.a. which means: "Whoever releases a Muslim from a difficulty in the
world, Allah SWAT will release the difficulties from him on the Day of Resurrection, and Allah SWT
always helps His servants who are (like) to help their brothers." In the Hadith, it is implied that
there is an encouragement to help each other between fellow Muslims in this world by
eliminating the difficulties of life that th
ey suffer. For those who have excess wealth, it is recommended to help people who are
in difficulties and if this is done, then Allah SWT will make the affairs of this world and the
hereafter easier for him. In relation to insurance, this hadith implies that there is a
recommendation to carry out insurance premium payments in the form of social fund payments
(tabarru') which will be used to help and improve affairs for people/members who get disaster
funds. Hadith Narrated by Bukhari r.a. which means: Narrated by olch Abu Hurairah r.a., he said:
"There was a dispute between two women from the Huzail tribe, then one of the women threw
stones at the other woman, causing the woman and the fetus she was carrying. So, the heirs of
the deceased woman complained about the incident to the Prophet PBUH. For this incident, the
Prophet PBUH decided to compensate for the murder of the fetus with the release of a male or
female slave, and decided to compensate the woman for the death of the woman with blood
money (diyat) paid by her agilah (relatives of the male parents)" 3. Law Number 2 of 1992
concerning Insurance Business This legislation does not accommodate asu ransi in sharia
principles.
