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Some abstraction is necessary for scientific analysis to proceed. Traditions change only in
the long run and can be abstracted away in a short-term analysis. Demonstration effect and
peer pressure also belong to that category, though to a lesser extent. Taking the easiest
course (by maintaining the status quo, for example) leads to different paths in different cases
and cannot be handled scientifically. It is better left to be taken into account at the policy
level, if and when needed. The remaining four factors are of a different nature. They should
not be abstracted away without careful consideration of the implications of doing so.
Before we proceed to consider the desirability and possibility of including care for others
and spiritual-moral dimensions of economic decisions into behavioral analysis, a word on
the interrelation between analysis and policy prescription is called for. In other words we
have to ponder over the relation of studying what is and what should be in an aspect of life
susceptible to human will. When the ‘is’, the existing reality at a particular time and place, is
the creation of willful choice by economic agents, it becomes very important to know how
those choices are made. One’s view of what one should choose would affect what one
actually chooses. This in turn is of great significance to policy makers targeting results that
are easier obtained through reshaping incentives.
Insofar as policy is directed at well-defined goals, it would help to get economic agents
willfully choose paths leading to those goals. A study of the relation between possible paths
of action and desirable goals would, therefore, occupy center stage in economic policy
studies. To make these studies meaningful, economic analysis too would have to pay
attention to factors influencing choice. One’s world-view (spirituality) and leanings towards
goodness (morality) would be prime influencing factors to be considered. Care for others,
individuals as well as the society or humanity as a whole, becomes the immediate
expression of spirituality and morality in economic choice. While the actual content of care
for others in a particular time and place for a particular economic agent will require
empirical rather than logical/theoretical study, the mere admittance of this dimension in
economics has far reaching consequences.
Emerging from the bosom of a religion with its world-view and moral values, Islamic
economics focuses on behavioral and policy studies that take both values and interests into
account. Its primary task is to understand. This involves not only observation (empirical
studies) but explanation too. Part of the explanation refers to values Islam seeks to inculcate
in its adherents. But the other factors involved: local conditions and cultures, etc. are also in
focus. In fact the former, Islamic values, enter into picture as frame of reference, they are
not imposed on reality, which is recorded as observed. But since the policy goals involve
transformation of human behavior from what they actually are to what they should be,
reference to Islamic values serves the dual purpose of revealing the actual impact of Islam,
if any, as well as indicating the gap that remains to bee bridged.
How to go from here to there, from the state of the economy that actually obtains to the state
of the economy desired, is a big question to ask. It cannot be answered by economics alone.
But economics sure can play a role in answering it. One of the major problems of economic
management in our age of globalization is the widening gap between the desirable state of
the economy and the actual state of the economy. A major task for economics in the coming
days would be to discover the causes of the widening gap, its consequences for people and
the possible ways to remedy the situation. Islamic economics should be able to make
significant contribution in view of its incorporating values and care for society in its
analytical framework and its emphasis on the possibility of reshaping incentives and
harnessing a variety of policy tools for realizing the goals, termed maqasid al-Shariah in
Islam.
There is a fundamental difference between the two elements in the economist’s field of
observation, values and interests that needs to be noted. Values are above time and place
whereas interests are situation bound. Values such as truthfulness, honesty and compassion
do not differ from person to person, situation to situation. Interests do. Values may
sometime be so interpreted that they serve the interests of the interpreter. It is also possible
for an economic agent to pursue his or her interests in clear violation of certain values.
There is no compulsion. Values do not impose themselves. Pursuit of value is an act of will,
one is free to do so or not to do so. The role of Islam is suasion, goading man to pursue
higher moral and spiritual values. Islam also provides substance to values by means of
anecdotes and episodes that help one in interpreting values in one’s own situation. Islamic
economics envisages economic agents in pursuit of their interests within a framework of
moral and spiritual values. Applied to a particular situation this would lead to a vision. The
ground reality may or may not conform to that vision. But the exercise is nevertheless useful
as it helps in identifying the gap between the reality and the desired state of the world that
can help policy makers in their efforts at transforming what exists into what is desirable.
It is advisable at this stage to devote some thought to vision and its significance for Islamic
economic analysis and policy studies. Unlike a statement of moral and spiritual values based
on Quran and Sunnah, which is couched in general terms, the vision mentioned above is
situation specific. It is stated in concrete terms, spelling out appropriate behavior and sound
policy in a well-defined situation. It is possible, building on such a vision, to project a state
of the world resulting from realization of that vision. That can be compared to what
currently obtains, prompting people to move on to a better world. The entire exercise takes
place in a framework of freedom, assuming free people choosing freely. In studying the
behavior of economic agents----as consumers, producers, employers, employees, lenders,
borrowers, importers, exporters, etc.---Islamic economics does not impose the Islamic vision
on what exists, which is recorded as it is, in all honesty and humility. The Islamic vision is
kept in the back ground as a point of reference.
FOCUS ON THE MARKET
Households, markets and states are three entities most prominent in the economy. They act
and interact in producing, distributing and consuming wealth. To them belongs ownership of
and control on natural resources. In the process of exchange several other entities and
institutions are created but they are invariably related to one or more of these three entities.
Money and credit stand out among these institutions as among the most important, affecting
almost all economic activities. For an orderly study of economy we start with the market.
Our justification of preferring it to households for a starting point is that households become
economically relevant mainly through interactions in the market. As regards the state it
derives its role mostly from the happenings in the households and markets.
It will be unrealistic to assume, however, that each and every household has access to the
market. He or she who has nothing to give has nothing to get from the market. But even the
households with no purchasing power are part of the economy by virtue of being human.
Whether the society handles their case by providing them access to market through grants or
in any other manner is another matter worthy of study. One possible approach is entitlement
based on need. The role of the state vis a vis these households is another subject of study.
Markets are for exchange. Every exchange involves at least two parties, each having
something to give and desiring to acquire something. Beginning with the simplest act of
exchange, bartering one thing for other, we notice how interests as well as values are
involved. Interests inhere in the desirability of the things exchanged to the respective parties.
The value framework inheres in truthfulness of description of their wares by the respective
owners, and any promises, warnings, etc. that might be involved. Bringing money into the
picture does not alter the picture. It only complicates it, increasing the importance of the
value framework. Introduce credit and the problem of keeping promises and honoring any
other commitments involved takes the center stage. It is in this context that some writers
have emphasized the role of trust. The more we complicate the picture by introducing
multiple parties to the act of exchange, bringing in middlemen and lengthening the supply
chain, making the things to be acquired more exotic and sophisticated, passage of time
between clinching a deal and actual delivery, etc. the more important the value framework
tends to become. Today in the early years of the twenty-first century with its electronic
payments, cross border deliveries and goods comprising myriad parts manufactured in a
number of countries, the importance of value framework in which exchange takes place has
increased manifold. Interests of the parties to economic exchange can hardly be secured
unless a clearly defined framework of values is there. To what extent such a value
framework needs to be reinforced by the coercive powers of law-enforcement and to what
extent voluntary adherence can be relied upon is a different matter. But interests of both
parties to exchange do require that certain values be honored.
The central problem for Islamic economics, and for any ethical approach to economics, for
that matter, is motivating the parties to a contract to care about the welfare of the other
parties too, and to adhere to moral-spiritual values to that end. It is a challenge yet to be met.
Some people think they can provide material incentives for doing so, apparently under the
assumption that there is no other kind of incentive. I think that is a hasty conclusion reached
under the influence of the ruling materialistic ethos. We need historical and empirical
research to arrive at a realistic conclusion. The role of incentives other than the material
incentives needs being fully explored. Insofar as an overwhelming majority of people
believe in some kind of life after death, and do things to secure a better dispensation in that
life, it will be unrealistic to ignore good of the hereafter as an incentive.
Despite the potential role of ethics, matters like fulfillment of contracts cannot be left
entirely to voluntary compliance. No markets can function and no civilized living is possible
unless contracts that are freely entered into are legally enforced. At the same time it is also
clear that the value framework mentioned above cannot be legally enforced in its entirety.
Part of the reason is the cost of enforcement. The wider the coverage of law the greater the
cost of redress through litigation. But this is not the only reason for some parts of the value
framework remaining outside the scope of law. There are values like compassion that,
though necessary for civilized living can hardly be legislated, much less enforced. Some
values require for their realization information available only with one of the parties to
exchange. The cost of extracting that information and/or punishing failure to act accordingly
may be sometimes prohibitive, always problematic. Exchanges between a patient and her or
his doctor or surgeon, or between a student and tutor come to mind. Examples may also be
found in environment and ecology related matters. Fair dealings are often difficult to define
in international trade or/and international financial dealings. The society would be better off
relying on voluntary adherence to basic moral values than on long-winded negotiations
between unequal parties whose end results often suffer in credibility. It will be a fairer
world, the world where there is a greater adherence to moral values. It will also be a more
efficient one, as it would avoid the cost of litigation and law enforcement to the extent of its
moral betterment.
Is there a way to handle values necessary for good life but hardly amenable to legal
enforcement? Can society harness morality to avoid some of the heavy costs of litigation
and law enforcement? Islamic economics, which greatly values the role of moral-spiritual
values in promoting human felicity, has an answer. The answer lies in demonstrating the
costs/benefit of violating/voluntary adherence to these values. This is possible for Islamic
economics as its very raison d’etre is the values Quran and Sunnah advocate relevant to
man’s economic life. It doesn’t have to ‘discover’ the relevant values as they are rooted in
human nature, indicated in Quran and Sunnah and elaborated upon in Islamic heritage with
respect to various regions and periods of time in history. The present generation has only to
project basic moral values onto its cultural and technological conditions. Can we do so?
Some Precedents
The value-based legal framework for the market as developed early in Islamic history can be
summarized as follows:
‘ All economic transactions require the willingness of the concerned parties with the
provision that goods and services transacted do not belong to the prohibited category and the
transaction is free from the following corrupt practices:
Riba, i.e. interest on loans and exchange of unequal quantities of similar fungibles. Gold or
silver or a particular paper currency must be exchanged in equal quantities. When gold or
silver or a particular paper currency are exchanged with one another, the quantities can be
unequal but the exchange must be simultaneous.
Qimar, i.e. gambling, bet and wager. The essence of gambling is taking a risk deliberately
created or invited which is not necessary in economic activity, to gain thereby.
Ghaban, i.e. fraud, especially that relating to the characteristics of a product
Ikrah, i.e. coercion, or imposing a contract, or a condition therein, on an unwilling party.
Bay’ al- mudtarr, i.e. exploitation of need, e.g. by charging an exorbitantly high price.
Ihtikar, i.e. withholding supply of essential goods and services with a view to raising prices.
Najash, i.e. raising prices by making false bids.
Gharar, i.e. hazard or uncertainty surrounding a commodity, its quantity, price, time of
payment, time or delivery etc.( with the provision that some little gharar can be ignored if it
is humanly impossible to ignore it).
Jahl mufdi ila al-niza’, i.e. such lack of information about a commodity, its quantity, price,
etc. as may lead to dispute.’
The Firm
The market attracts those who supply what is in demand. Suppliers wish to make profit by
doing so, i.e. sell for more than it costs to produce and supply the goods and services in
which they are dealing. Given the price at which to sell, profits can be maximized by
producing an amount at which marginal cost equals marginal revenue, in this case the given
market price. This neat formula is, however, based on certain assumptions that rarely obtain
in real life. Good for drawing a diagram to show how things could work out in certain cases,
it is not how the sellers actually behave in most of the cases. Prices tend to be sticky in most
markets. Observations show that average cost is, in general, more important in price
determination than marginal cost. Instead of profit maximization taking primacy so that
prices respond to changes in demand and cost conditions, profits rise and fall to enable a
degree of price stability in most markets. Firms attach greater importance to retaining their
customers, i.e., their share of the market, than to maximizing profits in the short run. Only
empirical research into specific markets can reveal how firms respond to changes in market
price, and how they are able to influence that price and to what extent.
The above falls within the conventional view of profits as an entity measurable in terms of
money, a view long exposed to have little basis in reality. Actually there are a number of
factors that, though not measurable, do intrude upon the situation. Economists generally
dismiss them as effective only in the long run, then never mention them again! But certain
traditions and norms of behavior, conditioned by ethnicity, community feeling or sheer
public opinion do impact day to day decision-making and should not be ignored.
To complete the picture of the market we have to bring in the buyers. Demand for goods and
services come from households as well as from firms and the government. Buyers are
looking for the best bargain, the best commodity at the lowest price. Competition results in a
price at which all those willing to sell are able to sell and all those willing to buy are able to
buy the commodity. This is the market price. Lack of information on part of some buyers
/sellers or power enjoyed because of being the only seller/buyer of a commodity, or because
of being a very large seller/buyer of a commodity results in deals at a price different from
what it would have been in the absence of these conditions. The market is in a continuous
state of flux, changing in response to ever changing condition on supply side and/or demand
side. However economists envisage a state of equilibrium at which a price equating demand
and supply is established. They also imagine a state of affairs in which every firm in a
particular industry is in equilibrium, so that the whole industry is in equilibrium, i.e. things
do not change unless and until some of the factors determining the equilibrium, such as
demand conditions change. Some go even further to envisage a condition of general
equilibrium in which every industry is in equilibrium so that the market as a whole is in
equilibrium. Since the notion of equilibrium prices is applicable to all markets, including the
markets for labor and capital, the notion of general equilibrium has been very dear to
theoreticians. It gives the economic cosmos the aura of the cosmos itself in which the
heavenly bodies appear to be in equilibrium. But the idea of general equilibrium is based on
very tough assumptions and is hardly of any practical significance.
Market price of a commodity is the most important signal for the suppliers (producers) of
that commodity as well as for the demanders (consumers) of that commodity. But if forces
other than competition are working, as they often do, the importance of the price signal
decreases. In certain cases the government may intervene to regulate prices, ready to
regulate production also, should it lag behind the national targets. It may be appropriate in
such cases that all stakeholders participate in taking a decision. The idea of a free market is
still valid but the complexity of modern life often necessitates a managed market .The
crucial question is: how to ensure that market management caters to general interest rather
than serving particular interests. This brings economics nearer to politics. Since the market
and the related price mechanism involves the markets for labor, land and capital also (and
therefore incomes of the members of society), the politics of managing the market becomes
one of the central issues in modern living. The fusion of economics and politics required at
this juncture has to be informed by a framework of values. Bereft of moral- spiritual values
to guide it, management of money, wages, rents, and other prices (to the extent necessary)
would be decided by the tug of war between various interest groups. The interest group that
is able to capture the state or its important organs will use this power to maximize its
advantages, irrespective of the need of the society.
THE STATE
Markets need supervision and control. Market supervision and control can be exercised, and
historically has been exercised, only by the social authority. Before the modern state it had
been the king or the tribal chief, sometimes partly aided by vocational guilds. In earlier
times, the most important things to monitor were weights and measures, quality control and
keeping of promises. The relevant tasks would be easily done by a market inspector, a mint
to issue coins, an arrangement for settlement of disputes by courts or special arbitration, etc.
With increasing complexities and widening scope of markets and increasing use of money
and credit more elaborate mechanisms have been devised. But the essence of the matter
remains the same: The market cannot manage itself, it has to be supervised and controlled
by the social authority. Social welfare has always been one of the objectives of social
supervision and control, besides ensuring justice and fair play. A focus on the role of state in
economic management is, therefore, an essential part of economics. Islamic vision of state
and its role in the economy has been in focus of Islamic thinkers since the earliest days.
Building on that rich heritage and keeping the objectives of Islam in view, Islamic
economics has to weave into market economics such essentials of state management as the
situation demands. It has no bias against authority, nor does its adherence to individual
freedom ever over ride public interest.
An Islamic theory of state envisages a representative institution. There is no place for
dictatorship in Islam. Given the consensual nature of social authority, it is assigned the task
of realizing the goals of the economy—the maqasid al-Shariah relevant for the economy.
One of the primary goals is universal need fulfillment, there are others too discussed in the
extant literature on Islamic economics. The state is authorized to use coercive power to
fulfill this goal after having exhausted all means of persuasion to let the goal be realized
voluntarily.
Since some prices are incomes for people, and as sustenance and survival of human beings
hinges on their incomes, such prices cannot be left entirely to the market to determine. Just
as social intervention in the labor market may be called for to ensure survival and need-
fulfillment, intervention in some markets, e.g. those of land and real estate, may be called
for to prevent concentration of wealth. The same applies to the financial markets whose
regulation and control is necessary for ensuring equity as well as efficiency. The role of
maqasid e Shariah in economic management has to be carefully fine-tuned so as not to
jeopardize the essentially free nature of the economy. The results of such fine-tuning are
bound to differ from time to time and place to place. Islamic economics cannot commit
itself to any particular mix of private enterprise and public control for all times and places.
Since the relevant details differ from country to country, even in the same period of time
Islamic economic policies could be/would, be different in
different countries.
"We should broaden and deepen our economic relations. With a growing population and
depleting resources in the world, such intra-Islamic cooperation is becoming increasingly
important for ensuring our energy security, water security and food security," he added.
"We must undertake necessary political, economic and social reforms to create an enabling
environment for harnessing our individual and collective potential. For this, we need to
ensure political stability and continuity, good governance, transparency and accountability
as well as consistent economic policies and improved delivery of social services,especially
in health and education."
He said: "we should focus on education and catch up in the field of science and technology.
Skill development through vocational training should receive a high priority to equip our
workforce with capabilities which are in demand in national and international markets."
"We must evolve a comprehensive growth model to provide a strategy for balanced
development. Moreover, we should provide for sharing of financial and commodity
surpluses through institutional mechanisms driven by public-private partnerships."
He said, the less endowed countries amongst us should develop absorptive capacity to make
optimal use of scarce domestic capital and to benefit from cross-border flows.
"Depending upon our individual comparative and competitive advantage, we should try to
specialize and carve out niches for ourselves in vital economic sectors such as energy,
telecom, IT, banking, mining,agriculture, services and so on. We can thus create
complementarities and by sharing best practices help each other to help ourselves.
Our eventual goal should be to create an Islamic Economic Union towards which we can
begin by entering into multilateral free trade agreements as well as promoting the free flow
of capital, labour, goods and services. We can also create a world-class capital market to
attract international capital, which would enable us to finance our growth and development."
The prime minister said this is the kind of global environment in which we in the Muslim
world have to position ourselves in our pursuit of economic resurgence. The sooner we
adjust to the ground realities of the new global order, the brighter our prospects of success
would be. The way forward in this highly competitive and inter-dependent world is through
improved governance and reform within individual Muslim states on the one hand and by
exploring new avenues of mutual cooperation based on commonality of interest on the
other.
The task of reconstructing Muslim societies is indeed stupendous. Such a process has to
reflect not only the idiom and thought currents of the modern age but also embody the drive
and inner quality of Islam. We are proud of the humane values and principles of Islam but at
the same time firmly believe that blind adherence to tradition should be discouraged to make
way for creative thinking. This is how Islam as a great faith can perpetuate itself as a living,
inspiring force in a world of relentless change. Before I revert to the specific strategies that
we require to ignite the process of economic revival in Muslim countries, let me emphasize
that we should not allow ourselves to become a hostage to the actions of a minority within
ourselves who have taken to extremism for one reason or the other.
We need to seriously explore as to why Islam has not been understood in its true light and
spirit and address the perception issues with clarity and force. We should approach the
current day realities with open minds and adopt a futuristic vision to resolve our issues and
problems. While doing so, we certainly need to highlight the root-causes of extremism
which breeds in the smouldering fires of injustice and resentment not only in Muslim
societies but in all societies. History is full of such examples. The world community has a
responsibility to remove the causes of injustice and frustration so that a lasting solution to
the scourge of extremism and terrorism can be found.
"We in Pakistan have already commenced this journey towards a better future. Over the past
seven years our government has been implementing policies to rejuvenate and reposition
Pakistan in the world. These involve comprehensive and multi-dimensional reforms in the
political,economic and social spheres."
In the political field, we have ensured good governance through accountability and
transparency. We have empowered people from the grassroots to the national level. We have
a vibrant opposition, an independent judiciary and a free media, he added.In the economic
sector, our reforms based on the principles of deregulation, liberalization and privatization,
have ensured an upward growth trajectory and our economy has been amongst the fastest
growing economies within Asia. About 14 million people have come out of poverty in just
four years. We have now embarked on our second generation reforms for enhancing
productivity and competitiveness, institution building and improving governance.
In the social realm, we are focusing on improving and enlarging the delivery of health and
education in order to develop a healthy and educated workforce that would shore up our
knowledge-based economy.Our government is also determined to leverage Pakistan's
strategic location at the crossroads of South, Central and West Asia to promote peace,
security and prosperity in the region and specially in the Islamic world. Pakistan provides
the shortest access to the sea for landlocked countries of Central Asia as well as Western
China. With the creation of energy, trade and transportation linkages across these
regions,Pakistan can play a key role towards promoting mutually beneficial regional
cooperation.
In conclusion, let me say that the Muslim world is faced with serious and multiple
challenges. A lot of progress has been made in many areas but a lot more needs to be done.
It requires clarity of thought, will to change, and determined and concerted action by all of
us individually and collectively. It is a difficult and arduous journey. It is a constant and
unrelenting struggle. The Muslim world, with its rich resources, vibrant energies and
unflagging determination, will overcome these challenges and open new avenues of
progress and prosperity not only for Muslims but for entire humanity. Islam promises
universal peace, progress and prosperity and so should our endeavors aim at and contribute
to make a better world for all mankind.
Islamic banking in Indonesia started to operate from 1992 by virtue of the enactment of the
Banking Act No. 7/1992; and when Bank Muamalat was established as the first bank which
operates in accordance with Islamic principles. The Banking Act No. 7/1992 was amended
by Act No. 10/1998, to provide an opportunity to conventional banks to open an Islamic
window. Since that time, the growth of Islamic banking in Indonesia has been progressing
steady and fast. Presently there are 3 full-fledged Islamic banks, 19 Shariah Business Units
and 92 Shariah Rural Banks. This tremendous growth deserves to be supported by a strong
legislation. One allied aspect that deserves attention relates to settlement of disputes in
Islamic banking. In the past, there was confusion on the question which forum was
competent to settle Islamic banking disputes: civil court or religious court. Both regarded
themselves to be competent to settle such disputes. But the problem was that the jurisdiction
of the civil courts did not extend to Shari’ah matters, within which Islamic banking disputes
apparently came. On the other hand, the jurisdiction of the religious courts was limited to
Personal law matters which did not cover banking disputes, and was confined to a)
marriage, b) inheritance, testamentary succession, hiba and waqf. There was no possibility
of any deviation as the matter was clearly spelled out in section 49 of the Act No. 7 of 1989
In the absence of an appropriate body to take charge of the settlement of Islamic banking
disputes, an initiative was taken by the Indonesia Council of Religious Scholars to set up
BAMUI (Indonesian Muamalat Arbitration Body) in 1993. The name of this body was
changed in 2003 to Basyarnas (National Shari’ah Arbitration Body). However due to very
poor knowledge of the Islamic law of arbitration possessed by the banks and their banking
costumer complainants, the National Shari’ah Arbitration Body could not function
effectively. The very fact that a dispute cannot be arbitrated unless there is an arbitration
agreement between the parties (i.e., the bank and customer) was not fully appreciated by the
parties. Consequently, disputes brought for arbitration by both of them were lacking
necessary legal foundation and could not thus be legally arbitrated. Any award made in such
an arbitration was not enforceable. As a result of this problem, most of the cases involving
Islamic banking disputes continued to be taken to the civil courts, notwithstanding the
questionable knowledge of the judges of such courts of matters relating to Islamic banking
and finance.
This anomaly was rectified in February 2006 through Law No. 3 of 2006 which amended
Law No. 7 of 1989 and expanded the jurisdiction of the Religious courts to cover
adjudication of disputes belonging to Islamic economic matters, including Islamic banking.
This expansion arguably enhanced the status and authority of Religious courts as a dispute
settlement institution within the judiciary system in Indonesia. Its jurisdiction is now no
more confined to the settlement of disputes in the Islamic family law matters, but extended
also to the field of Islamic business and economic matters. However, this turns out as
another challenge for Religious courts due to the fact of the complexity of Islamic
economics matter, and needed more time to be properly absorbed and understood. With this
in mind, this paper tries to analyze the challenge faced by Basyarnas as a non-litigation
forum and Religious courts as litigation institutions both of which have been conferred with
the competency to settle of disputes in the area of Islamic banking.
Furthermore, Allah also commands Muslims to bring peace when the dispute
arises among them. It is stated in the Quran, Surah Al-Hujurat, ayat 9:
“If two parties among the Believers fall into a quarrel, make ye peace between
them: but if one of them transgresses beyond bounds against the other, then fight
ye against the one that transgresses until it complies with the command of Allah;
but if it complies, then make peace between them with justice, and be fair: for
Allah loves those who are fair (and just)”.
Contrary to the points of strength stated above, there are some weaknesses in
Basyarnas that should be improved. First of such weakness is the lack of
professionalism in Basyarnas personnels. Having known that the Islamic banking in
Indonesia has been fast developing and it will play significant role in Indonesian
national banking industry in the future, not much has been done in the area of human
resource development. As the institution which has authority in dispute settlement of
Islamic banking, it should be managed in a professional manner and be supported by
the professionals. However, the board members of Basyarnas consist of the busy
persons who could not bestow full attention to it. This creates a bad influence on its
activity and it could not work in maximal manner. The restructuring of Baysarnas
with the professional persons is possible.
Secondly, Baysranas must have its own building, a good administration, and its own
secretariat which is always ready to serve the parties at any time, and have to have
the qualified arbiters who have the capability to help the disputing parties to resolve
their banking disputes in a good manner. Thirdly, the Basyarnas has only 4 branch
offices in the whole of Indonesia. These are in Provinces of Surabaya, Riau,
Lampung and Yogyajarta. Indonesia consists of 31 provinces and Islamic banks have
been widespread and exist in all provinces. These limited number of branch offices
of course could not accommodate the demands and facilitate good services to the
society. In order to solve this problem, the enlargement of networking of Basyarnas
office to other provinces is necessary. Fourth, Islamic bank and customers are
apparently have less understanding about the Basyarnas as the institution which has
jurisdiction in resolving Islamic banking disputes. The mutual familiarization of
Basynarnas and Bankers, customers, ulama, academicians, entrepreneurs and others
should be carried out by conducting seminars, training camps, etc. It is hoped this
could agenda can improve their understanding of the role of Basyarnas.
D. Brief Conclusion
Looking to the impressive improvement of the Islamic banks in Indonesia, the
existence of Basyanas and Religious court as the institution which has authority to
settle the dispute of Islamic banking is very impressive. Basyarnas as non-litigation
institution can play important role in resolving disputes of Islamic banking
expeditiously, inexpensively, and simply. Its process of reconciliation is indeed
attractive to the disputing parties. However, it remains to be seen how it is managed in
a professional, manner. Its office should not be centralized in Jakarta, but must have
branch offices in every province of Indonesia. Furthermore, the enforcement of
exclusive jurisdiction on the religious courts in the field of Islamic economics
including Islamic banking, by virtue of the Act No. 3 of 2006, constitutes a huge trust
reposed in these courts which was impossible to conceive in the Dutch colonial era.
The Religious courts should carry out this trust in as good a manner as possible. It will
also enhance the status of Religious courts in Indonesia that it has power and ability to
settle disputes not only in the traditional area of marriage, divorce, inheritance, etc. but
in the new area of banking and finance also.
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Illustration By Timur Abimanyu, SH.MH.
Dispute ditinjauan Islamic economics from several countries with the settlement of
economic disputes sharia in Indonesia, it was clear that the subject matter of the
dispute looks ordinances initial agreements between the parties, Value object, the
value of bankruptcy, compensation and others. Dispute at Indonesian Islamic
economics is divided based on individual circumstances and diverse economic
community that cause economic senketa sharia in Indonesia becomes complicated.
As we all know that Islamic banking in Indonesia does not stand alone, where its
presence is still below the Bank of Indonesia which is a conventional bank. Islamic
Bank should stand on its own is not under the influence of Conventional Banks, this
is to avoid if there is a variety of Islamic transactions do not affect transactions in
conventional as well as in case of dispute Shariah.
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