By Timur Abimanyu, SH.

MH

The Washington Post

OVERVIEW OF ISLAMIC BANKING IN INDONESIA AND HANDLING
DISPUTES AND EFFORT TO MAKE THE ECONOMY
LAW ISLAMIC EVENTS
The development of Islamic banking system in Indonesia is carried out within the
framework of a dual-banking system or the dual banking system within the framework of
the Indonesian Banking Architecture (API), to present an alternative that the complete
banking services to the people of Indonesia. Taken together, the system of Islamic banking
and conventional banking in synergy to support the mobilization of public funds more
broadly to improve financing for national economic sectors. Characteristics of Islamic
banking system that operates on the principle of profit sharing provides an alternative
banking system of mutual benefit for the community and the bank, and highlight aspects of
fairness in trade, ethical investment, promote the values of togetherness and brotherhood in
production, and avoid speculative activity in financial transactions . By providing a variety
of banking products and services that varied with the financial scheme that is more varied,
Islamic banking as an alternative banking system that is credible and can dinimati Indonesia
by all segments of society without exception.

In the context of macro economic management, the widespread use of various products and
Islamic financial instruments will be able to glue the relationship between the financial
sector, real sector and creating harmony between the two sectors. The more widespread use
of Islamic products and instruments in addition to supporting the financial activities and
business community will also reduce the transactions that are speculative, thus supporting
the overall financial system stability, which in turn will contribute significantly to the
achievement of price stability in the medium-term. With the enactment of Law No.21 of
2008 concerning Islamic Banking which was published on July 16, 2008, the development
of a national Islamic banking industry increasingly has a sufficient legal basis and will
encourage the growth is even faster. With impressive progress in its development, which
reached an average asset growth of more than 65% annually the past five years, it is
expected that Islamic banking industry's role in supporting the national economy will be
increasingly significant.

Sharia Banking Development Policy in Indonesia

To provide guidance to stakeholders of Islamic banking and put the position and outlook of
Bank Indonesia in developing Islamic banking in Indonesia, then in 2002, Bank Indonesia
has issued a "Blueprint of Islamic Banking Development in Indonesia." In preparation, many
aspects have been considered in a comprehensive manner, including the actual condition of
the national Islamic banking industry and its related tools, the development trend of Islamic
banking industry in the international and national development of Islamic financial system
that began to materialize, and not apart from the framework of financial system are more
macro like the Indonesian Banking Architecture (API) and the Indonesian Financial System
Architecture (ASKI) and international best practices formulated by Islamic financial
institutions internationally, such as the IFSB (Islamic Financial Services Board), AAOIFI
and IIFM.The development of Islamic banking is directed to provide the highest benefits to
society and contribute optimally to the national economy. Therefore, the direction of the
development of a national Islamic banking is always referred to other strategic plans, such as
the Indonesian Banking Architecture (API), Indonesian Financial System Architecture
(ASKI), as well as National Medium Term Development Plan (RPJMN) and National Long
Term Development Plan (RPJPN). Thus, efforts to develop Islamic banking is part and
activities that support the achievement of the strategic plan in a larger scale at the national
level.
"Blueprint of Islamic Banking Development in Indonesia" with a vision, mission and goals
of the development of Islamic banking as well as a set of strategic initiatives with clear
priorities to address key challenges and achieve the target within the next 10 years, namely
the achievement of Islamic banking market share in significant deepening the role of Islamic
banking in the financial activities of national, regional and international levels, the condition
is being formed with the integration of other Islamic financial sector. In the short term, a
national Islamic banking is more directed toward servicing the domestic market is huge
potential. In other words, a national Islamic banking should be able to be a domestic player
but has the quality of service and performance with international standards. Ultimately, the
Islamic banking system to be established by Bank Indonesia is a modern Islamic banking,
which is universal, open to all Indonesian citizens without exception. A banking system that
delivers applicative forms of economic tenets formulated by wise, in the present context the
problems being faced by Indonesia, and with due regard to socio-cultural conditions in
which the nation's history of travel writing. Only in that way, then efforts to develop Islamic
banking system will always be seen and accepted by the entire people of Indonesia as part of
the solution of various problems of the country.

Grand Strategy of Islamic Banking Market Development

As a concrete step efforts to develop Islamic banking in Indonesia, Bank Indonesia has
formulated a Grand Strategy of Islamic Banking Market Development, a comprehensive
strategy of market development include strategic aspects, namely: determining the vision of
2010 as a leading Islamic banking industry in ASEAN, creating image new national Islamic
banking which is inclusive and universal, market mapping more accurately, a more diverse
product development, service improvement, as well as new communications strategy that
positioned the Islamic banking is more than just a bank. Furthermore, different concrete
programs have been and will be done as the implementation stage of the grand strategy of
development of Islamic banking financial markets, among others, are as follows:

First, implement a new vision of Islamic banking development in Phase I in 2008 to build
an understanding of Islamic banking as a Beyond Banking, with the achievement of the
target assets of Rp 50 trillion and industry growth by 40%, Phase II in 2009 made the
Indonesian Islamic banking as the most attractive Islamic banking in ASEAN, with the
achievement of the target assets valued at Rp.87 trillion and industry growth by 75%. Phase
III in 2010 made the Indonesian Islamic banking as the leading Islamic banks in ASEAN,
with the achievement of targets and assets amounting to Rp.124 trillion industry growth of
81%.
Second, a new imaging program that includes aspects of Islamic banking positioning,
differentiation, and branding. The new positioning of Islamic banks as a banking mutually
beneficial to both parties, aspects of differentiation with a competitive advantage with
products and schemes are diverse, transparent, competent and ethical finance, information
technology is always up-date and user friendly, and the presence of Islamic financial
investment expert adequate. While in the aspect of branding is "Islamic banking is more
than just a bank or banking beyond."
Third, the new mapping program is more accurate on the market potential of Islamic
banking which generally directs Islamic bank services as universal service or a bank for all
levels of society and all segments in accordance with their respective strategies of Islamic
banks.
Fourth, product development programs directed at a diverse variety of products supported
by the unique value offered (mutual benefit) and an extensive office network support and the
use of standard product names are easy to understand.
Fifth, service quality improvement programs that are supported by competent human
resources and provision of information technology that is able to meet customer needs and
satisfaction and be able to communicate the Islamic bank products and services to customers
correctly and clearly, to remain in compliance with Islamic principles; and
Sixth, outreach programs and public education more broadly and efficiently through various
direct, or indirect (print, electronic, online / web-site), which aims to provide an
understanding of the benefits of Islamic banking products and services that can be utilized
by community.

Documentation about Islamic Banking: Shariah Banking Outlook 2011

Acceleration Program of Islamic Banking.
Islamic Banking Investment Guide.
Codification of Islamic Banking Products.
Law of the Republic of Indonesia No. 21/2008 on Islamic Banking
Summary of the Law of the Republic of Indonesia No. 21/2008 on Islamic Banking
Indonesia Sharia Banking Accounting Guidelines (PAPSI 2003).
What is iB (ai-Bi )...??
iB (ai-Bi) Going With New Strategy
Developing Business With Working Capital Financing iB
Calculating Profit Sharing iB
Mobile Banking iB
Multijasa iB: Solution Needs Education Costs
Islamic Banking: More Hold Global Crisis
Impressive Growth iB (ai-Bi) Islamic Banking
List of Islamic Banking Products
Wanted: HR Multidimensional To iB (ai-Bi)
iB (ai-Bi): New Life In Berbanking
Credit Card iB: Under Sharia, Can Wear Worldwide
IB Savings, Savings Simultaneously Investing
KPR iB: Multiple Choice Everything Profitable
Services iB In Anywhere, Easy And Permanent Sharia
Come Together Sharing iB

And Islamic Capital Market Rules Strengthened

Growth of regional and international Islamic economy continues melesat.Untuk support it,
Bapepam LK held a real step for the development of Islamic capital market in Indonesia.
Islamic capital market is a concrete answer to the needs of the financial sector for the
Indonesian people who are listed as the country with the largest Muslim population in the
world. The first step for the development of Islamic capital market (Islamic capital market)
starts with the formation of Islamic mutual funds, the Jakarta Islamic Index (JII) and Islamic
bonds are effective from October 30 2002.Sedangkan Islamic capital market itself began to
be launched on March 14, 2003. In essence, the capital market is equivalent to the
conventional capital market.

Only, there are a number of sharia law to be obeyed. Some countries which could be used as
a reference for the establishment of Islamic capital markets, namely Malaysia, Egypt,
Jordan, and Turkey. Listed company which intends to issue Islamic securities shall sign and
comply with covenants in accordance with syariah.Selain it, ensuring that their operations
comply with Islamic principles and has the Shari'a Compliance Officer. If sewaktuwaktu not
meet these requirements, the securities issued by itself has no effect anymore sharia. Sharia
Consultant KARIM Business Consulting Widyaningsih explain, until August 2009 the total
mobilization of funds in Islamic capital market instruments to reach Rp24, 4 trillion. These
funds are dispersed on the instrument of mutual funds, corporate bonds sharia (sukuk), and
securities of Islamic countries (SBSN). If coupled with JII capitalization, the total funds
islamic reached Rp878, 9 trillion. In addition to the development of the absorption of public
funds into this Islamic investment instruments, he added, the infrastructure in the form of
sets of rules for that industry has begun to be strengthened.

Namely, with the publication of some of the rules of Bapepam in 2006 and 2007. The peak
marked by the passing of the Act (the Act) SBSN in 2008. Ideally, he explained, teaches
Islamic investment principles that actually, that risks come with returns. For equity
instruments, investors are taught to have vision long term investment. Where the practice of
speculation, fried fry stocks by creating a false supply (Najsy), short selling and insider
trading should be accepted and applied as a prohibited transaction. However, he said, does
not mean take advantage of the market mechanism in the form of capital gains is prohibited.
This is clearly stated in the DSN-MUI fatwa. Where the shares sharia not only limited to the
stocks included in JII.Pasalnya, investors can also refer to the list of Islamic securities (DES)
which has been issued by Bapepam LK periodically. He asserted, should be understood that
the Islamic capital markets industry is not solely on its own. Islamic capital market should
be able to integrate with the banking and Islamic insurance. Islamic stock exchange plays an
important role for banks, insurance companies, and other interested parties. Portfolio
Manager Nasional Madani (PNM) Solahuddin Jawas explain, at present the development of
Islamic fund management industry has grown particularly rapidly. However, significant
developments occurred in 2005. At that time many Islamic bonds are launched.

It was then triggered the government to issue Islamic securities in 2007.Salah one country
are in investing in Islamic bonds were sukuk. Basically, he continued, Sukuk are bonds
based on sharia. That is, bonds or debentures has a base or foundation of sharia in which the
funds collected should be invested in investment products are halal, or permitted by sharia.
He added that infrastructure must continue to be prepared. Only the actual percentage
growth of Islamic mutual funds is significant. Even if viewed from the side of the mutual
fund industry, the highest growth occurred in Islamic mutual funds. Its market share also
increased. Although the actual nominal terms tend not been felt. As a comparison, in May
2009, the mutual fund industry reached Rp100 trillion while the new Islamic fund Rp3, 5
trillion. Thus, approximately only 3.5 percent of mutual funds.

Even so, said Mr. Solahudin, the growth of Islamic mutual funds increased significantly
from 2004 which is only Rp500 billion. While at that time was Rp90 trillion mutual fund. In
fact, Islamic and conventional mutual funds have only a few differences, namely product,
contract, and how. Contract between investors and institutions are usually done with
mudharabah system. Technically, al-mudaraba is a business cooperation contract between
two parties where the first party providing the full (100 percent) in capital, while others
become managers. Actually, he continued, there was no significant difference between
Islamic and conventional mutual funds. Therefore, the conventional mutual fund is already
running on sharia principles. The reason, the results are placed in conventional mutual
funds, get a big profit or loss was shared equally. (Hermansah)(//RHS) Source: Okezone.com

Dispute Resolution Still Arguably Islamic Bank

Religious courts still do not have a reference to meneyelesaikan dispute. Are organized
compilation of sharia law in civil and criminal.
Head of Accounting Standards and Disclosure of Bapepam-LK Anis Baridwan dispute
highlights a possible transaction imbul in Islamic economics.
Anis believes Bapepam regulations that must be worn if there is a dispute in the transaction-
based effects can syariah.Jalurnya through the Indonesian Capital Market Arbitration Board
(BAMUI) or other mediation agency, he told hukumonline when met after Indonesia's first
Investor Forum in Jakarta on Tuesday (1 / 8) ..

President Director Karim Karim Business Consulting Adiwarman Azwar another opinion.
He saw that if there is a dispute in the Islamic economy will be completed in the religious
court. He is basing on the provisions of Law no. 3 of 2006 concerning Amendment to Law
no. 7 of 1989 regarding Religious Judicature. Nevertheless, both agree that the dispute over
Islamic economy lately, it often appears to be done on the right track. They look in the
mirror in the case of two leading Islamic banking with Pertamina. The story, two years ago,
Pertamina filed murabaha financing scheme (sale and purchase) to the second Islamic bank
to finance the procurement of 100 units of vehicles.

Each Islamic bank that agreed to channel financing for 50 units of vehicles. One time,
Pertamina's too late to pay, however, unilaterally, one of the banks suddenly raise prices on
murabahah. In fact, according to contract agreement murabahah, the Islamic bank should not
raise prices during the period of financing. Since the dispute erupted.

According to the Secretary General of the Association of Islamic Economics (IAEI)

Agustiono, the dispute is still not finished because the banks are reluctant to bring this case
to institute sharia abitrase. In fact, the new Islamic disputes can be brought to the institution
abitrase if both parties agree. IAEI himself claims to have reported this case to Bank
Indonesia, Islamic banks are concerned, the National Islamic Council? Indonesian Ulema
Council (DSN-MUI) and Sharia Supervisory Board (SSB), but the results remain nil. The
case above is a small sample that appear discreetly in the world of Islamic banking. Data
from the Directorate of Islamic Banking BI mentions throughout 2005 until the end of June
2006 at least there are 150 Islamic disputes. In fact, similar cases are likely to continue
bertambah.BI itself as a banking supervisory authority-including Islamic banks have warned
that Islamic banks do naughty practices. Data evaluation of the performance of Islamic
banks by BI mention a variety of findings. Not just a matter of bad practice of Islamic
banking, but also the problem of Islamic banking products issued.
The document said the banking system, the product is cumbersome. Because the transaction
occurred, although recorded in the books of banks, but it still violates the precautionary
principle hatian.Direktur Muamalat Andi Buchori acknowledge that runs the system of
Islamic banks has not been perfect. but he believed all the cases that arise will not be able to
remove the power of Islamic banking system.

Minimal Standard
Indeed, since the Law no. 3 / 2006 was passed, should the dispute has Islamic banking will
see a bright spot. The law insists that all disputes be resolved in the Courts of Islamic
economics Religion. The problem, in terms of human resources still reap many problems.
Data IAIE mention, of 2,000 Religious Court judges, only 500 are expected to meet other
standar.Masalah, there is no reference to the sharia judges when settling disputes. Reference
that currently there is a product of secular law and therefore may not be able to resolve the
dispute syariah.Untuk overcome this, the Department of Justice and Human Rights has
established a team assigned to review the compilation of Islamic law. The product of this
teamwork is a compilation of Islamic law, both criminal and civil actions that will be a
reference of religious court judges.

Dispute Resolution Still Arguably Islamic Bank

Religious courts still do not have a reference to meneyelesaikan dispute. Are organized
compilation of sharia law in civil and criminal. Head of Accounting Standards and
Disclosure of Bapepam-LK Anis Baridwan dispute highlights a possible transaction imbul in
Islamic economics. Anis believes Bapepam regulations that must be worn if there is a
dispute in the transaction-based effects can syariah.Jalurnya through the Indonesian Capital
Market Arbitration Board (BAMUI) or other mediation agency, he told hukumonline when
met after Indonesia's first Investor Forum in Jakarta on Tuesday (1 / 8) ..

President Director Karim Karim Business Consulting Adiwarman Azwar another opinion.
He saw that if there is a dispute in the Islamic economy will be completed in the religious
court. He is basing on the provisions of Law no. 3 of 2006 concerning Amendment to Law
no. 7 of 1989 regarding Religious Judicature. Nevertheless, both agree that the dispute over
Islamic economy lately, it often appears to be done on the right track. They look in the
mirror in the case of two leading Islamic banking with Pertamina.

The story, two years ago, Pertamina filed murabaha financing scheme (sale and purchase) to
the second Islamic bank to finance the procurement of 100 units of vehicles. Each Islamic
bank that agreed to channel financing for 50 units of vehicles. One time, Pertamina's too late
to pay, however, unilaterally, one of the banks suddenly raise prices on murabahah. In fact,
according to contract agreement murabahah, the Islamic bank should not raise prices during
the period of financing. Since the dispute erupted. According to the Secretary General of the
Association of Islamic Economics (IAEI) Agustiono, the dispute is still not finished because
the banks are reluctant to bring this case to institute sharia abitrase. In fact, the new Islamic
disputes can be brought to the institution abitrase if both parties agree. IAEI himself claims
to have reported this case to Bank Indonesia, Islamic banks are concerned, the National
Islamic Council? Indonesian Ulema Council (DSN-MUI) and Sharia Supervisory Board
(SSB), but the results remain nil (zero).
The case above is a small sample that appear discreetly in the world of Islamic banking.
Data from the Directorate of Islamic Banking BI mentions throughout 2005 until the end of
June 2006 at least there are 150 Islamic disputes. In fact, similar cases are likely to continue
bertambah.BI itself as a banking supervisory authority-including Islamic banks have warned
that Islamic banks do naughty practices. Data evaluation of the performance of Islamic
banks by BI mention a variety of findings. Not just a matter of bad practice of Islamic
banking, but also the problem of Islamic banking products issued. The document said the
banking system, the product is cumbersome. Because the transaction occurred, although
recorded in the books of banks, but it still violates the precautionary principle
hatian.Direktur Muamalat Andi Buchori acknowledge that runs the system of Islamic banks
has not been perfect. but he believed all the cases that arise will not be able to remove the
power of Islamic banking system.

Minimal Standard
Indeed, since the Law no. 3 / 2006 was passed, should the dispute has Islamic banking will
see a bright spot. The law insists that all disputes be resolved in the Courts of Islamic
economics Religion. The problem, in terms of human resources still reap many problems.
Data IAIE mention, of 2,000 Religious Court judges, only 500 are expected to meet other
standar.Masalah, there is no reference to the sharia judges when settling disputes. Reference
that currently there is a product of secular law and therefore may not be able to resolve the
dispute syariah.Untuk overcome this, the Department of Justice and Human Rights has
established a team assigned to review the compilation of Islamic law. The product of this
teamwork is a compilation of Islamic law, both criminal and civil actions that will be a
reference of religious court judges.

=============

Illustration By Timur Abimanyu, SH.MH.

In principle, the Religious Religious Courts in this special handling cases of

economic disputes sharia, just need to be sharpened with specialties such as law
Bankruptcy Law Sharia Law Sharia sale and purchase transaction, Capital Market
Law and Sharia Law Other Shariah relating to Islamic economic disputes. This is the
event of dispute Islamic Economic, Religious Courts are ready to resolve the dispute
and decide the case of Islamic economics.Experts law / Islamic economies have
sought to meet needs such as creating a script tesebut academy Economic Procedural
Law of Sharia as the law of procedure in the Court of Civil Religion, as the activities
were facilitated by Mr. Zainuddin Fajari (Vice-Chairman of the High Court of
Jakarta Religious) and Mr.Hidayatullah (Director Pranata and Management of
Religious Affairs Directorate General Civil Case Badilag-Supreme Court of the
Republic of Indonesia). In the future handling of economic disputes sharia is ready to
be resolved and there will be no mutual attraction between the Religious authority
and General Court.

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