Bank Indonesia should educate Islamic Banking officer and investor or indonesia citizen about muamalah or syariah properly,,

Written by Gerry Octaviano, S.Soc, MBA

As long Islamic Banking still using fiat money, we can not say Islamic Banking is Islamic since fiat money or money creation or in the bank we know the term multiple deposit creation that is the root of the evil.

However, in legal maxim we know that we should choose lesser evil or in the other word rather than we go to conventional banks, we should go to Islamic Banks.

Actually, Islamic Bank has the pure Islamic Products (partneship) which are mudharabah and Musharaqah. Before, I come to the issue I would like to explain briefly about mudharabah and musharaqah product.

Basically, mudharabah is the partnership agreement between 2 parties or more which consist of rabbal mal (investor) and mudharib (entrepreneur) and at the beginning of contract they already agreed ratio in sharing profit. But, the loss is burden to rabbal mal (investor) if the loss is not because of mudharib's negligent . The concept in here is sharing profit but loss is burden to investor if loss is not because of mudharib's negligent. The basic concept in shariah is investors can not guarantee their capita, that's why riba is haram since investors guarantee their income, as consequence, they can relax sit on their luxury sofa and wait the interest comes to them by charging fix or fluctuate interest rate is the evident.

In practice, Islamic Banking covers themselveswith the name of mudharabah but actuall they offer interest rate like conventional banks do.

There is the story about an innocent Islamic Bank officer went to Investor's office. At the beginning, this innocent officer was going to explain his bank's mudharabah product but this investor can not really understand and this investor asked about how much interest rate per yer or equivalent ratethat this guy can give to this investor. Then, this officer called his marketing manager and then this manager told him to give fix rate 9.5% p.a. for example. Eventually, this investor agreed.

From this real story we can see that Indonesian people is lack of knowledge about Islamic Product which is the mudharabah and musaharaqah are the solution of the global crisis which was mentioned by US and other westers countries economic experts.

Bank Indonesia and media should support Islamic Banking in educating Indonesia citizen without charge. In order to implement properly Shariah principle in Islamic Banking we should focus on Research and Development (R&D).

Allah Wa' Alam