Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia
The profit-sharing system is the main characteristic of Islamic banking that distinguishes them from conventional (ribawi) banking. However, in reality, the profit-sharing contract is rarely implemented in Islamic banking. As a result, Islamic banking is still identified as ribawi banking. Many Isla...
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| Format: | Article |
| Language: | Indonesian |
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Universitas Negeri Surabaya
2020-01-01
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| Series: | al-Uqud: Journal of Islamic Economics |
| Subjects: | |
| Online Access: | https://journal.unesa.ac.id/index.php/jie/article/view/6807 |
| _version_ | 1827979686424084480 |
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| author | Muhamad Nafik Hadi Ryandono |
| author_facet | Muhamad Nafik Hadi Ryandono |
| author_sort | Muhamad Nafik Hadi Ryandono |
| collection | DOAJ |
| description | The profit-sharing system is the main characteristic of Islamic banking that distinguishes them from conventional (ribawi) banking. However, in reality, the profit-sharing contract is rarely implemented in Islamic banking. As a result, Islamic banking is still identified as ribawi banking. Many Islamic economists have examined the reasons behind fixed income contracts, especially murabahah contract that applied predominantly, structurally, systematically and massively compared to the profit-sharing contract. Therefore, with a critical analytical approach, this study aims to dismantle and look for solution towards exploitation of fixed income-based financing in Indonesian sharia banking. The results of this study are fixed income-based financing should be applied limited to covering the operational costs of Islamic banks but the remainder must be channelled based on profit-sharing systems. Meanwhile, funding for profit-sharing systems is intended to gain profits and cover the operational cost variables. Thus, predatory exploitation of Islamic banks in Indonesia can be minimized by maintaining the composition of the maximum financing about forty per cent which is a fixed-yield based and leave the rest to a profit-sharing system. Then, the more equitable Islamic bank system and Islamic economic goals will be created and offer benefits such as the achieving of the objectives of Islamic sharia (maqashid shariah) and minimizing the image of Islamic banks as ribawi bank. |
| first_indexed | 2024-04-09T21:41:46Z |
| format | Article |
| id | doaj.art-e6ce058caee846c3b6a2f5e754d5b26a |
| institution | Directory Open Access Journal |
| issn | 2549-0850 2548-3544 |
| language | Indonesian |
| last_indexed | 2024-04-09T21:41:46Z |
| publishDate | 2020-01-01 |
| publisher | Universitas Negeri Surabaya |
| record_format | Article |
| series | al-Uqud: Journal of Islamic Economics |
| spelling | doaj.art-e6ce058caee846c3b6a2f5e754d5b26a2023-03-26T08:26:51ZindUniversitas Negeri Surabayaal-Uqud: Journal of Islamic Economics2549-08502548-35442020-01-0141486810.26740/al-uqud.v4n1.p48-685572Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in IndonesiaMuhamad Nafik Hadi Ryandono0Department of Islamic Economics, Faculty of Economics and Business, Universitas AirlanggaThe profit-sharing system is the main characteristic of Islamic banking that distinguishes them from conventional (ribawi) banking. However, in reality, the profit-sharing contract is rarely implemented in Islamic banking. As a result, Islamic banking is still identified as ribawi banking. Many Islamic economists have examined the reasons behind fixed income contracts, especially murabahah contract that applied predominantly, structurally, systematically and massively compared to the profit-sharing contract. Therefore, with a critical analytical approach, this study aims to dismantle and look for solution towards exploitation of fixed income-based financing in Indonesian sharia banking. The results of this study are fixed income-based financing should be applied limited to covering the operational costs of Islamic banks but the remainder must be channelled based on profit-sharing systems. Meanwhile, funding for profit-sharing systems is intended to gain profits and cover the operational cost variables. Thus, predatory exploitation of Islamic banks in Indonesia can be minimized by maintaining the composition of the maximum financing about forty per cent which is a fixed-yield based and leave the rest to a profit-sharing system. Then, the more equitable Islamic bank system and Islamic economic goals will be created and offer benefits such as the achieving of the objectives of Islamic sharia (maqashid shariah) and minimizing the image of Islamic banks as ribawi bank.https://journal.unesa.ac.id/index.php/jie/article/view/6807exploitationfinancingfixed yieldspredatoryprofit sharing. |
| spellingShingle | Muhamad Nafik Hadi Ryandono Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia al-Uqud: Journal of Islamic Economics exploitation financing fixed yields predatory profit sharing. |
| title | Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia |
| title_full | Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia |
| title_fullStr | Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia |
| title_full_unstemmed | Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia |
| title_short | Solution for Islamic Banks Exploitation: A Criticism of Fixed-Yields Based Financing in Indonesia |
| title_sort | solution for islamic banks exploitation a criticism of fixed yields based financing in indonesia |
| topic | exploitation financing fixed yields predatory profit sharing. |
| url | https://journal.unesa.ac.id/index.php/jie/article/view/6807 |
| work_keys_str_mv | AT muhamadnafikhadiryandono solutionforislamicbanksexploitationacriticismoffixedyieldsbasedfinancinginindonesia |