the development of murabaha in indonesian islamic banks(malaysia: centre for research and training...

Rechtsidee, 3 (1), June 2016

P. ISSN. 2338-8595, E. ISSN. 2443

Journal Homepage: http://ojs.umsida.ac.id/index.php/rechtsidee

DOI Link: http://dx.doi.org/10.21070/jihr.v3i1.153

Article DOI: 10.21070/jihr.v3i1.153

*Coresponding author.

E-mail address: [email protected]

Peer reviewed under reponsibility of Faculty of Law, Universitas

© 2016 Faculty of Law, Universitas Muhammadiyah Sidoarjo, All right

access article under the CC BY license (

Review Article

The Development of Murabaha in Indonesian Islamic Bank

Ari Kurniawan1*

, Abd. Shomad1,2

Faculty of Law, Airlangga University

Java, Indonesia, 60286.

Article history: Received 28 May 2016; accepted 28

ABSTRACT

Over the last few years, Islamic trading transaction has become more popular in Indonesia.

Islamic banks for an example. There are many Islamic banks in Indonesia that

transactions and halal product in retail trade to the public based on Islamic law, but Islamic banks must obey not

only the origins of Islamic law, such as the Holy

the prohibition of uncertainty, interest and gambling when they run their business in retail trade. One of the

agreements in retail trade is Murabaha which involve

company (seller) purchases via an agent or a third party and murabaha via the customer as an Agent. However,

there are several contemporary issues, particularly

still need to be discussed whether they disobey Islamic law and basic Islamic principles or not.

Keywords: murabaha; islamic banks

HOW TO CITE: Kurniawan, A., & Shomad, A. (2016). The Development of Murabaha in Indonesian

Banks. Rechtsidee, 3(1), 1-16. doi:http://dx.doi.org/10.21070/jihr.v3i1.153

ABSTRAK

Transaksi perdagangan Islam telah menjadi lebih populer di Indonesia dalam beberapa tahun terakhir. Sebagai

contoh bisnis perbankan syariah dalam perdagangan retail. Ada banyak bank syariah di Indonesia yang

menyediakan transaksi bisnis alternatif dan prod

berdasarkan hukum Islam, namun bank

Al Qur'an dan Sunnah tetapi juga prinsip

mereka menjalankan bisnisnya dalam perdagangan

retail adalah Murabaha, yang memiliki bebe

langsung, perusahaan (penjual) pembelian melalui agen atau pihak ketiga dan

sebagai agen. Namun, ada beberapa isu

mengeksekusi Murabaha yang masih perlu dibahas apakah mereka melanggar hukum Islam dan prinsip

dasar Islam atau tidak.

Kata kunci: murabaha; bank-bank Islam di Indonesia; riba

1. Introduction

One of the factors influencing a

has a high trade business activity, the economy of the country would also rise. Likewise, its

growth would slow when it does not have a sustainable trade business activities

the trading business would affect the growth of a country’s economy.

June 2016, 1-16

8595, E. ISSN. 2443-3497

http://ojs.umsida.ac.id/index.php/rechtsidee

http://dx.doi.org/10.21070/jihr.v3i1.153

10.21070/jihr.v3i1.153

Peer reviewed under reponsibility of Faculty of Law, Universitas Muhammadiyah Sidoarjo.

© 2016 Faculty of Law, Universitas Muhammadiyah Sidoarjo, All right reserved, This is an open

license (http://creativecommons.org/licenses/by/4.0/)

of Murabaha in Indonesian Islamic Banks

, Abd. Shomad2

University, Jl. Darmawangsa Dalam Selatan, Surabaya

2016; accepted 28 June 2016; Available online 30 June 2016

Over the last few years, Islamic trading transaction has become more popular in Indonesia.

an example. There are many Islamic banks in Indonesia that provide alternative business


only the origins of Islamic law, such as the Holy Qur’an and the Sunnah but also Islamic principle in terms of


in retail trade is Murabaha which involves several possible structures, notably direct trading,


there are several contemporary issues, particularly Murabaha via Shares and executing time of Murabaha that

e discussed whether they disobey Islamic law and basic Islamic principles or not.

s in Indonesia; riba; islamic law; finance law.

Kurniawan, A., & Shomad, A. (2016). The Development of Murabaha in Indonesian




menyediakan transaksi bisnis alternatif dan produk halal dalam perdagangan retail kepada masyarakat

namun bank-bank Islam harus mematuhi tidak hanya sumber hukum Islam

Al Qur'an dan Sunnah tetapi juga prinsip-prinsip hukum Islam dalam hal riba, gharar dan maysir ketika

mereka menjalankan bisnisnya dalam perdagangan retail. Salah satu bentuk perjanjian dalam perdagangan

, yang memiliki beberapa kemungkinan bentuk perdagangan retail, yakni perdagangan

pembelian melalui agen atau pihak ketiga dan murabaha melalui pelanggan

ada beberapa isu-isu terkini, khususnya pembelian saham dengan murabah

yang masih perlu dibahas apakah mereka melanggar hukum Islam dan prinsip

Islam di Indonesia; riba; hukum islam; hukum pembiayaan.

s influencing a country’s economic increase is trading. Once a state


growth would slow when it does not have a sustainable trade business activities

the trading business would affect the growth of a country’s economy. In addition,

__

1

open

Surabaya, East

Over the last few years, Islamic trading transaction has become more popular in Indonesia. Retail trade in

alternative business


Qur’an and the Sunnah but also Islamic principle in terms of


notably direct trading,


and executing time of Murabaha that

Kurniawan, A., & Shomad, A. (2016). The Development of Murabaha in Indonesian Islamic



kepada masyarakat

bank Islam harus mematuhi tidak hanya sumber hukum Islam, seperti

prinsip hukum Islam dalam hal riba, gharar dan maysir ketika

Salah satu bentuk perjanjian dalam perdagangan

, yakni perdagangan

melalui pelanggan

pembelian saham dengan murabaha dan waktu

yang masih perlu dibahas apakah mereka melanggar hukum Islam dan prinsip-prinsip

; hukum islam; hukum pembiayaan.

is trading. Once a state


growth would slow when it does not have a sustainable trade business activities; therefore,

In addition, Islamic

__

2

trading transaction in Indonesia has increased significantly.

business of Islamic banks in retail trade in Indonesia.

Indonesia that provide an alternative business transaction

the public based on Islamic law.

Moslem, Islamic banks have a big opportunity for

on Islamic law.

The business of Islamic finance is not similar to conventional finance regarding the

basic principles and the origins of Islamic law. One of the differences is Islamic banks offer

interest-free banking whereas conventional banks

Islamic law that comes from not only the Holy Qur’an but also Sunnah as primary origins

and several secondary and dependent sources that obtain the value

Qur’an but also the Sunnah, notably ijma and ijtihad. In addition, they must also comply with

Islamic principles in terms of the prohibition of uncertainty, interest and gambling when they

run their business in retail trade.

One of the agreements in retail tra

in which the seller sells a good by asserting the purchase price to the buyer and the buyer

pays for it with more price as a profit

parties might be run either via the customer

structures of Murabaha in retail trade might involve Direct Trading, Company (seller)

Purchases via an agent or a third party and Murabaha via the customer as an Agent.

There are several contemporary issues

and the practice of Islamic finance in Indonesia reg

Shares. This issue arises once it would be “

time of Murabaha, particularly whether Islamic bank could put the goods up for sale legally

to its customer or not. However, these several issues still need to be discussed whether they

disobey Islamic law or not, but Islamic bank must comply with Islami

the prohibition of Gharar, Riba and Maysir.

1.1 Islamic Jurisprudence

The primary origins of Islamic Jurisprudence come

Sunnah. Firstly, it is from The Holy Qur’an. It provides the key text upon that the Sharia is

founded. In other words, it is the Prophet Muhammad Revelations, that came from Allah

1 National Sharia Board of Indonesia,

Sharia Board NO: 04/DSN-MUI/IV/2000, 2000).

Rechtsidee, 3 (1),

P. ISSN. 2338-8595, E. ISSN. 2443



trading transaction in Indonesia has increased significantly. A good example would be the

in retail trade in Indonesia. There are many Islamic banks in

ternative business transaction and halal product in retail trade

based on Islamic law. Due to the fact that the majority of the population

a big opportunity for running a retail trade in Indonesia

Islamic finance is not similar to conventional finance regarding the


banking whereas conventional banks offer interest. Islamic banks

Islamic law that comes from not only the Holy Qur’an but also Sunnah as primary origins

and several secondary and dependent sources that obtain the value of not only the Holy

n but also the Sunnah, notably ijma and ijtihad. In addition, they must also comply with

in terms of the prohibition of uncertainty, interest and gambling when they

run their business in retail trade.

in retail trade is Murabaha that is a sale and purchase contract


pays for it with more price as a profit1. The trading activities which are conducted by the

either via the customer as agent or via a third party agency. This possible



several contemporary issues that affect the differences between the theory

and the practice of Islamic finance in Indonesia regarding murabaha contract. Murabaha via

This issue arises once it would be “buyback”. The second issue relates to executin


However, these several issues still need to be discussed whether they

disobey Islamic law or not, but Islamic bank must comply with Islamic principles in terms of

the prohibition of Gharar, Riba and Maysir.

The primary origins of Islamic Jurisprudence come from the Holy Qur’an and

. Firstly, it is from The Holy Qur’an. It provides the key text upon that the Sharia is


National Sharia Board of Indonesia, DSN No.04/DSN-MUI/IV/2000 Tentang Murabaha (Fatwah of National

MUI/IV/2000, 2000). View Item.

), June 2016, 1-16

8595, E. ISSN. 2443-3497



A good example would be the

many Islamic banks in

and halal product in retail trade to

the population is

Indonesia-based

Islamic finance is not similar to conventional finance regarding the


offer interest. Islamic banks must obey

Islamic law that comes from not only the Holy Qur’an but also Sunnah as primary origins,

not only the Holy

n but also the Sunnah, notably ijma and ijtihad. In addition, they must also comply with

in terms of the prohibition of uncertainty, interest and gambling when they

that is a sale and purchase contract


The trading activities which are conducted by the

agent or via a third party agency. This possible



between the theory

Murabaha via

. The second issue relates to executing


However, these several issues still need to be discussed whether they

c principles in terms of

from the Holy Qur’an and

. Firstly, it is from The Holy Qur’an. It provides the key text upon that the Sharia is


(Fatwah of National

Review Article

The Development of Murabaha in Indonesian Islamic Banks

Ari Kurniawan, Abd. Shomad.

SWT2. According to Coulson

3

Jurisprudence ideologically and historically

Jurisprudence comes from the Sunnah. It defines literally “

religious beliefs, it conveys all the saying and acts of the Prophet Muhammad

he commended. It is defined as hadith that literally refers to a “history” or “communication

However, in this perspective, it is recognized to define particularly a description of the

Prophet Muhammad life and conduc

Companions the Prophet Muhammad. It was merely put in text after several substantial

period had passed since the death of the Prophet Muhammad

Qur’an but also Sunnah is the main and independent origins of religious beliefs. The Qur’an

would take priority over the Sunnah

Sunnah for legal guidance merely if there is no obvious directive could be gained from the

Holy Qur’an8. Furthermore, there are several the secondary and dependent sources that obtain

the value from not only the Holy Qur’an but also the Sunnah. They are

involve qiyas as the secondary of Islamic Jurisprudence

1.2 Basic Terms of Islamic Law

Islamic Jurisprudence does not recognize commercial transactions which have illegal

aspects. Islamic principle has categorized several features that are to be avoided in business

transactions, notably Riba, Gharar and g

these elements, it would be void and null contract. Therefore, Islamic contract must avoid

them to be legal and valid contract due to Sharia compliance.

1.2.1 Riba prohibition

Riba is expansion, increase,

prohibit every increase11

. The base of prohibition is accordance with the manner via which an

2 Angelo M. Vernandos, Islamic Banking and Finance in South

Publishing, 2012). p. 17. View Item 3 Noel J. Coulson, “Islamic Law,” in An Introduction to Legal Systems

Maxwell, 1968). View Item. 4 Vernandos, Islamic Banking and Finance in South

5 Ibid.

6 Ibid. 7 There are differences of scholarly opinion concerning how early the

earliest systemic collection which has survived was the

Brown, Rethinking Tradition in Modern Islamic Thought

94. View Item. 8 Vernandos, Islamic Banking and Finance in South

9 A. R. A. Haqqi, The Philosophy of Islamic Law of Transactions

CERT Publication, 2009). p. 17. View Item10 Abu Abdullah Muhammad Al-Qurtubi,

Murabaha in Indonesian Islamic Banks

, the Holy Qur’an is “the main expression of the Islami

Jurisprudence ideologically and historically”. Furthermore, the second sources of Islamic

Jurisprudence comes from the Sunnah. It defines literally “a beaten track”

religious beliefs, it conveys all the saying and acts of the Prophet Muhammad and everything

he commended. It is defined as hadith that literally refers to a “history” or “communication


Prophet Muhammad life and conduct6

. It was constructed from the recollection of


period had passed since the death of the Prophet Muhammad7. Therefore, not only the Holy

the main and independent origins of religious beliefs. The Qur’an

Sunnah as certain ethical. Moslem scholars ought to use the


Furthermore, there are several the secondary and dependent sources that obtain

the value from not only the Holy Qur’an but also the Sunnah. They are Ijma and ijtihad that

qiyas as the secondary of Islamic Jurisprudence9.

amic Law



ions, notably Riba, Gharar and gambling. They must be avoided as if contract has


be legal and valid contract due to Sharia compliance.

Riba is expansion, increase, growth or addition10

. However, Islam does not always

The base of prohibition is accordance with the manner via which an

Islamic Banking and Finance in South-East Asia, 3rd ed. (Singapore: World Scientific

An Introduction to Legal Systems, ed. J.D.M. Derrett (London: Sweet &

Islamic Banking and Finance in South-East Asia.

There are differences of scholarly opinion concerning how early the hadith commenced to be recorded. The

earliest systemic collection which has survived was the Muwatta of Iman Malik (d. 179 AH). See

Rethinking Tradition in Modern Islamic Thought (Cambridge: Cambridge University Press, 1996).

Islamic Banking and Finance in South-East Asia.

The Philosophy of Islamic Law of Transactions (Malaysia: Centre For Research and Training

View Item.

Qurtubi, “al-Jami” Li Ahkam Al-Qur’an Volume 3, n.d.. p. 348.

__

3

the main expression of the Islamic

Furthermore, the second sources of Islamic

”4. Regarding

and everything

he commended. It is defined as hadith that literally refers to a “history” or “communication5.


from the recollection of


Therefore, not only the Holy

the main and independent origins of religious beliefs. The Qur’an

as certain ethical. Moslem scholars ought to use the


Furthermore, there are several the secondary and dependent sources that obtain

Ijma and ijtihad that



ambling. They must be avoided as if contract has


However, Islam does not always

The base of prohibition is accordance with the manner via which an

, 3rd ed. (Singapore: World Scientific

, ed. J.D.M. Derrett (London: Sweet &

commenced to be recorded. The

of Iman Malik (d. 179 AH). See Daniel

(Cambridge: Cambridge University Press, 1996). p.

(Malaysia: Centre For Research and Training

p. 348. View Item

__

4

increase is obtained12

. Furthermore, riba defines an excessive payment that has to be paid by

borrower to the lender as a condition for the loan

from the loan that given to the borrower. At the very beginning, it is to be noted that there is a

similarity of Moslems view regarding the Riba prohibition.

Islamic jurisprudence strongly prohibid Riba.

The Holy Qur’an definitely prohibit Riba.

several displeasure indications against Riba

prohibition prior to the “Uhad” battle in the year 3 AH

passing away of the Holy Prophet, Riba is prohibited finally and repeatedly in the year 10

AH16

. The Holy Qur’an (not only al

130 and al-Rum: 39) prohibits Riba strictly.

In addition, numerous traditions of the following holy Prophet (

prohibition of Riba. One of them is Zaid B. Aslam

this nature: “a person lends fund or money to

period expired, the lender will ask:

well, otherwise the lender added the loan and extended the time

1.2.2 Gharar prohibition

Gharar is uncertainty, hazard, or risk

of clarity regarding the goods, or the price or the time of delivery

example would be the sale of a fish in water. It has no

cost for the fish or would pay the cost for servi

fish, people do not recognize how many fish in the water. Islam prohibits a sale or any other

business that contains Gharar element. It contains Gharar if the liability of any parties to a

contract is uncertainty or the price of goods is uncertainty. However, as the lack of agreement

on the part of Moslem jurists as to precisely what does and d

creates uncertainty as to whether

11

Mohd. Daud Bakar, Riba and Islamic Banking and Finance (Essential Reading in Islamic Fi

(Malaysia: Centre For Research and Training (CERT) Publication, 2008).12

Ibid. 13 Ibid. 14

Muhammad Ayub, Understanding Islamic Finance

44. 15

Ibn Hajar Al-Asqalani, Fathul Bari, Sharah of Sahih Al Bukhari16 Ayub, Understanding Islamic Finance17

Malik Ibn-e-Anas, Muwatta' (English Translation)

1985). p. 427. 18

Ayub, Understanding Islamic Finance19 Ibid.

Rechtsidee, 3 (1),

P. ISSN. 2338-8595, E. ISSN. 2443



Furthermore, riba defines an excessive payment that has to be paid by

nder as a condition for the loan13

. So the lender would gain the addition


similarity of Moslems view regarding the Riba prohibition. Furthermore, the main sou

Islamic jurisprudence strongly prohibid Riba.

definitely prohibit Riba. In the Makkah period, the people

several displeasure indications against Riba14

. However, Islam imposed the express

prohibition prior to the “Uhad” battle in the year 3 AH15

. Around two weeks before the


(not only al-Nisa: 161 and al-Baqarah: 275-281; but also al

39) prohibits Riba strictly.

traditions of the following holy Prophet (PBUH) revealed the

prohibition of Riba. One of them is Zaid B. Aslam17

described that interest in time

fund or money to other people for a particular time

period expired, the lender will ask: ‘you repay extra to me’, once he made payment, it was

well, otherwise the lender added the loan and extended the time for repayment”.

Gharar is uncertainty, hazard, or risk18

. In other words, Gharar is a thing that has lack

of clarity regarding the goods, or the price or the time of delivery on a contract

fish in water. It has no clarity whether people would

cost for the fish or would pay the cost for service. Furthermore, if people pay the cost for the

not recognize how many fish in the water. Islam prohibits a sale or any other

iness that contains Gharar element. It contains Gharar if the liability of any parties to a


on the part of Moslem jurists as to precisely what does and does not constitute Gharar it

whether any given transaction involving it is permissible or not,

Riba and Islamic Banking and Finance (Essential Reading in Islamic Fi

(Malaysia: Centre For Research and Training (CERT) Publication, 2008). p. 7. View Item.

Understanding Islamic Finance (Chichester: John Wiley & Sons, 2007).

Fathul Bari, Sharah of Sahih Al Bukhari, 8th ed. (Makkah, 1981). p. 205.

Understanding Islamic Finance. p. 44.

(English Translation), ed. M. Rahimuddin Sh. and Muhammad A


), June 2016, 1-16

8595, E. ISSN. 2443-3497



Furthermore, riba defines an excessive payment that has to be paid by

So the lender would gain the addition


Furthermore, the main sources of

, the people provided

However, Islam imposed the express

Around two weeks before the


also al-Imran:

) revealed the

that interest in times was of

a particular time and the

e payment, it was

In other words, Gharar is a thing that has lack

a contract19

. A good

clarity whether people would pay the

pay the cost for the

not recognize how many fish in the water. Islam prohibits a sale or any other

iness that contains Gharar element. It contains Gharar if the liability of any parties to a


constitute Gharar it

any given transaction involving it is permissible or not,

Riba and Islamic Banking and Finance (Essential Reading in Islamic Finance)

(Chichester: John Wiley & Sons, 2007). View Item. p.

p. 205.

, ed. M. Rahimuddin Sh. and Muhammad Ashraf (Lahore,

Review Article



Moslem jurists have different opinions to determine Gharar in any transactions that is

accordance with Islamic Jurisprudence.

Although the Holy Qur’an has no verse to forbid Gharar

prohibits vanity (albatil)20

. The Holy

showed that “do not consume your property among yourselves for vanities, nor apply it as

enticement for the courts“.

Interpreters of these verses have

Ibn Al-Arabi, he claimed that al

principles, notably Riba and Gharar

consuming other’s good in method that was prohibited by Islamic Law

Zamakhsari asserted that the acts that were prohibited by religious belief as vanity, notably

theft, gambling and Gharar contracts

One of the reasons that Gharar is not legal is any risk between the parties that make

contract at the beginning and may cause a loss for one party and profit for the other. Risk due

to uncertainty between the parties might generate unfair and unbalanced

whether the way that profit of loss is achieved is unfair or unbalanced.

According to the Malikies

classified by Shaikh Al-Dhareer

below:

1. Gharar in the conditions and substance of the agreement involves

a. Two sales in one

b. Suspended transaction

c. Future transaction

2. Gharar in the object of the agreement involves

a. The object of unidentified identity

b. The object of unidentified genus

20

Abdul Rahim Al Sa’aati, “The Permissible Gharar (Risk) in Classical Isl

Abdulaziz University: Islamic Economics21

Ibid. 22 Abu Bakrr lbn AI-Arabi, Ahkam AI

View Item. 23

Mohamed Bin Jareer AI-Tabary, Tafsir Al

(Beirut: Dar al-Kutub al-’Ilmiyah, 1997).24 Sa’aati, “The Permissible Gharar (Risk) in Classi25

AI Siddiq Mohammad Al Amin Al Dharir,

Transaction. (Jeddah: Islamic Reseacrh and Training Series, 1997).26

Ibid. 27 Ayub, Understanding Islamic Finance



accordance with Islamic Jurisprudence.

ly Qur’an has no verse to forbid Gharar explicitly, in many verse

The Holy Qur’an (an-Nisa (4): 161) and Al-Baqarah (2)

do not consume your property among yourselves for vanities, nor apply it as

Interpreters of these verses have a consensus which Gharar is vanity21

.

al-batil or vanity is not legal as it is forbidden by Islamic

principles, notably Riba and Gharar22

. Furthermore, Al-Tabari considered vanity as

consuming other’s good in method that was prohibited by Islamic Law23

asserted that the acts that were prohibited by religious belief as vanity, notably

contracts24

.

that Gharar is not legal is any risk between the parties that make


to uncertainty between the parties might generate unfair and unbalanced profit or loss. It is

whether the way that profit of loss is achieved is unfair or unbalanced.

Malikies Mahdzab, the principles covering Gharar have been

Dhareer25

who is a contemporary scholar through the following

Gharar in the conditions and substance of the agreement involves26

:

Gharar in the object of the agreement involves27

:

The object of unidentified identity

genus

Abdul Rahim Al Sa’aati, “The Permissible Gharar (Risk) in Classical Islamic Jurisprudence,”

Abdulaziz University: Islamic Economics 16, no. 2 (2003): 3–19. View Item Google Scholar

Ahkam AI-Qur ’an, 1st ed. (Beirut: Dar al kotob al Ilmiyyah , 1957).

Tafsir Al-Tabari : Al-Musammá Jami’ Al-Bayan Fi Ta'wil Al

’Ilmiyah, 1997). p. 949. View Item.

Sa’aati, “The Permissible Gharar (Risk) in Classical Islamic Jurisprudence.”

AI Siddiq Mohammad Al Amin Al Dharir, Al-Gharar in Contracts and Its Effects on Contemporary

(Jeddah: Islamic Reseacrh and Training Series, 1997). pp. 10-11. View Item.


__

5


, in many verses it

Baqarah (2): 188

do not consume your property among yourselves for vanities, nor apply it as an

According to

or vanity is not legal as it is forbidden by Islamic

Tabari considered vanity as

23. Moreover,

asserted that the acts that were prohibited by religious belief as vanity, notably

that Gharar is not legal is any risk between the parties that make


profit or loss. It is

, the principles covering Gharar have been

who is a contemporary scholar through the following

amic Jurisprudence,” Journal of King

, 1st ed. (Beirut: Dar al kotob al Ilmiyyah , 1957). pp. 41-42.

Bayan Fi Ta'wil Al-Qur'an, 3rd ed.

Gharar in Contracts and Its Effects on Contemporary

__

6

c. The object of unidentified species

d. Ignorance about the time of payment in deferred transactions

e. Inability to deliver the item

f. Agreement on a nonexistent item

g. the item could not be seen

Furthermore, Islamic Jurisprudence forbids the power to sell

under the following three circumstances

1. There are no things as the object of legal transaction. In other words, it does not exist.

2. There are things that exist. However, the seller does not have the possession of those

things.

3. There are things that exist. However, they are exchanged on the basis of uncertain

payment and delivery.

The general principles could be implemented

contract must be certain regarding the subject matter, price and time of delivery

must be defined clearly with proper description in

obligation of the parties that are co

contract. The availability, deliverability and existence of the commodity should be known by

the parties.29

1.2.3. Maysir prohibition

The Holy Qur’an prohibits

showing by it Satan “would like merely to spread hatred and enmity among you, and delay

you from prayer and from the remembrance of Allah SWT

(5): 90); and al-Baqarah (2): 219

‘In them is serious wrong doing and (yet, several) advantage for people. However

transgression is greater than their advantage’.

‘The excess (beyond needs)’. Therefore

which you may provide thought”.

One of the reasons why maysir

way to get the property, money or profit. In other words, gaining revenue without working or

gaining things too easily are prohibited. If people would like to earn money, they have to

28

Ibid. 29

Ibid. 30

Frank E. Vogel and Samuel L. Hayes,

Item.

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The object of unidentified species

Ignorance about the time of payment in deferred transactions

Inability to deliver the item

Agreement on a nonexistent item

Furthermore, Islamic Jurisprudence forbids the power to sell to prevent uncertainty

under the following three circumstances28

.

There are no things as the object of legal transaction. In other words, it does not exist.

There are things that exist. However, the seller does not have the possession of those

things that exist. However, they are exchanged on the basis of uncertain

The general principles could be implemented to avoid Gharar. One of them is the

contract must be certain regarding the subject matter, price and time of delivery

must be defined clearly with proper description in the contract. Furthermore, the rights and

obligation of the parties that are concerned must be determined and defined clearly in

The availability, deliverability and existence of the commodity should be known by

The Holy Qur’an prohibits maysir that is gambling. It condemns gambl

would like merely to spread hatred and enmity among you, and delay

you from prayer and from the remembrance of Allah SWT”30

. The holy Qur’an

19 showed that “They ask you about wine and gambli

doing and (yet, several) advantage for people. However

is greater than their advantage’. And they ask you what they ought to pay.

Therefore, Allah makes obvious to you the verses (of revelation)

.

maysir is prohibited is that gambling, or the game is not

money or profit. In other words, gaining revenue without working or


Frank E. Vogel and Samuel L. Hayes, Islamic Law and Finance, 1st ed. (Berlin: Springer, 1998).

), June 2016, 1-16

8595, E. ISSN. 2443-3497



revent uncertainty

There are no things as the object of legal transaction. In other words, it does not exist.

There are things that exist. However, the seller does not have the possession of those

things that exist. However, they are exchanged on the basis of uncertain

avoid Gharar. One of them is the

contract must be certain regarding the subject matter, price and time of delivery. The good

contract. Furthermore, the rights and

ncerned must be determined and defined clearly in the

The availability, deliverability and existence of the commodity should be known by

that is gambling. It condemns gambling (maysir),

would like merely to spread hatred and enmity among you, and delay

The holy Qur’an (al-Maidah

and gambling. Say,

doing and (yet, several) advantage for people. However, their

they ask you what they ought to pay. Say,

bvious to you the verses (of revelation)

the game is not the

money or profit. In other words, gaining revenue without working or


, 1st ed. (Berlin: Springer, 1998). p. 87. View

Review Article



work hard. If they do not work, they will not have money. Secondly, gambling could cause

hate or hatred or hostility for the party who lose. Therefore, it is not accordance with Islamic

Law.

According to Samuelson31

taking. There are two types of commercial gambling.

casino games, and skill, particularly football games and horse races

notably skill and chance game is speculation regarding Brenner

where the member, notably the gamblers earn money using their s

gambling convey their traditional act because a difference from the common

might be against the marketplace

gambling is the hope of becoming rich quickly

ways to getting rich based on speculation. If people win a lottery, they will become rich. If

they lose a lottery, they might be disappointed,

Jurisprudence forbids gambling or

1.3 Brief Definition of Murabaha

One of the contracts form in Islamic

sale and purchase contract which has the nature of trust on specific goods

is the purchase price plus the profit which the parties can make a bargain profit margins

other words, it is one of the form of particular purchase contract when the seller to provide

information to buyers about the cost of acquisition o

the goods and the profit38

. According to

a sale and purchase contract in whi

the buyer and the buyer pays for it with

the item that is needed by customer and then bank sells this to the client with the purchase

price plus the profit, but the transactions must be valid and avoid riba,

31 Paul Samuelson, Economics (New York: McGrow32

Sa’aati, “The Permissible Gharar (Risk) in Classical Islamic Jurisprudence.”33

Reuven Brenner, Gambling and Speculation A Theory, a History, and a Future of Some Human Decision

(Cambridge: Cambridge University Press, 1990). 34 Ibid. 35

Ibid. 36

Sayyid Sabiq, Fiqih Sunnah Jilid 12, 10th ed. (Bandung: Alma’Arif, 1996).

Said and Achmad Zaidun, Tarjamah Bidayatul Mujtahid Jilid III (Ibnu Rusyd)

n.d.). p. 181. View Item. Adib Bisri Must

Lumpur: Darulfikir, 1992). pp. 262-263. 37

Ayub, Understanding Islamic Finance38

Ascarya, Akad & Produk Bank Syariah39 Indonesia, DSN No.04/DSN-MUI/IV/2000 Tentang Murabaha



hatred or hostility for the party who lose. Therefore, it is not accordance with Islamic

31, Gambling involves the voluntary idea and intentional risk

There are two types of commercial gambling. The chance games, notably

casino games, and skill, particularly football games and horse races32

. The second type,

notably skill and chance game is speculation regarding Brenner33

. He argued that it is an act

where the member, notably the gamblers earn money using their skill. Either speculation or

gambling convey their traditional act because a difference from the common

might be against the marketplace34

. Brenner considered the reason they do speculation and

gambling is the hope of becoming rich quickly35

. Take lottery as an example. It is one of the


ry, they might be disappointed, hatred or hate. Therefore, Islamic

gambling or maysir in any transactions.

Definition of Murabaha

form in Islamic finance is Murabaha. Regarding the fiqh, it is a

sale and purchase contract which has the nature of trust on specific goods36

. Ayub

is the purchase price plus the profit which the parties can make a bargain profit margins


information to buyers about the cost of acquisition of goods, including the purchase price of

According to Fatwah Of National Sharia Board of Indonesia

a sale and purchase contract in which the seller sells a good by asserting the purchase price

for it with more price as a profit. In other words, bank purchases


price plus the profit, but the transactions must be valid and avoid riba, gharar and

(New York: McGrow-Hill, Back company, 1976). pp. 425-426.


Gambling and Speculation A Theory, a History, and a Future of Some Human Decision

(Cambridge: Cambridge University Press, 1990). pp. 90-112. View Item.

, 10th ed. (Bandung: Alma’Arif, 1996). p. 83. View Item

Tarjamah Bidayatul Mujtahid Jilid III (Ibnu Rusyd) (Jakarta Pusat: Pustaka Amani,

Adib Bisri Musthofa, Tarjamah Muwaththa’ Al-Imam Malik R.a.: Jilid 2

263. View Item.

Understanding Islamic Finance.

Akad & Produk Bank Syariah, 1st ed. (Jakarta: Rajawali Pers, 2013). pp. 81-82.

MUI/IV/2000 Tentang Murabaha.

__

7


hatred or hostility for the party who lose. Therefore, it is not accordance with Islamic

, Gambling involves the voluntary idea and intentional risk

The chance games, notably lotteries,

The second type,

He argued that it is an act

kill. Either speculation or

gambling convey their traditional act because a difference from the common view as they

they do speculation and

It is one of the


hatred or hate. Therefore, Islamic

is Murabaha. Regarding the fiqh, it is a

Ayub describes it

is the purchase price plus the profit which the parties can make a bargain profit margins37

. In


f goods, including the purchase price of

National Sharia Board of Indonesia39

, it is

the purchase price to

. In other words, bank purchases


and maysir. In

Gambling and Speculation A Theory, a History, and a Future of Some Human Decisions

View Item. Imam Ghazali

(Jakarta Pusat: Pustaka Amani,

Imam Malik R.a.: Jilid 2 (Kuala

__

8

addition, the Bank Indonesia Regulation

Transaction of Sharia Banks40

,

transactions which are based on the Islamic contract of Murabaha,

Furthermore, regarding Bank Indonesia Circular Letter

Murabaha contract is bank provides fund to purchase a good relating to Murabaha transaction

with customer as a buyer.

Islamic sources provides

Nisa (4): 29 reveals:

“O you who have believed, do not consume one another's wealth unjustly155 but only

[in lawful] business by mutual consent.

another]. Indeed, Allah is to you ever Merciful

Secondly, Al Baqarah (2): 275 mentions

“Those who consume interest

one stands who is being beaten by Satan into insanity.

‘Trade is [just] like interest’.

interest. So whoever has received an admonition from his Lord and desists may have

what is past, and his affair rests with Allah.

interest or usury] – those are the companions of the Fire; they will abide eternally

therein”.

In addition, Surah Al-Ma’idah

contracts”.

1.4 Possible structures of the practice of Murabaha in Indonesia.

Particular expertise might be required by trading and other real sector business

activities. The firms might purchase goods and assets and sell them to their clients,

specifically on the base of deferred payment

conducted by the parties might be run either via the customer

agency. This possible structures of Murabaha involve

1.4.1 Direct Trading

The most ideal possibility is direct trading

basics. However, there might be several difficulties in retail trading business

40

Governor of Bank Indonesia, PBI No. 9/19/PBI/2007 Tentang Pelaksanaan Prinsip Syariah Dalam Kegiatan

Penghimpunan Dana Dan Penyaluran

No. 9/19/PBI/2007: SG No. 165 Dpbs, 2007).41

Governor of Bank Indonesia, SEBI No. 10/14/DPbS Tentang Pelaksanaan Prinsip Syariah Dalam Kegiatan

Penghimpunan Dana Dan Penyaluran Dana Serta Pelayanan Jasa Bank Syariah

Letter No. 10/14/DPbS, 2008). View Item42 Ayub, Understanding Islamic Finance

Rechtsidee, 3 (1),

P. ISSN. 2338-8595, E. ISSN. 2443



Regulation on the Implementation of Islamic Principle

reveals financing at Islamic Bank relates to the purchase

transactions which are based on the Islamic contract of Murabaha, Salam

Bank Indonesia Circular Letter41

, one of the requirements of

contract is bank provides fund to purchase a good relating to Murabaha transaction

Islamic sources provides several rules of Murabaha. Firstly, The Qur’an, Surah

O you who have believed, do not consume one another's wealth unjustly155 but only

[in lawful] business by mutual consent. In addition, do not kill yourselves [or one

another]. Indeed, Allah is to you ever Merciful”.

275 mentions:

Those who consume interest cannot stand [on the Day of Resurrection] except as

one stands who is being beaten by Satan into insanity. That is becau

‘Trade is [just] like interest’. But Allah has permitted trade and has forbidden


what is past, and his affair rests with Allah. But whoever returns to [dealing in

those are the companions of the Fire; they will abide eternally

(5): 1 describes “O you who have believed, fulfill [all]

the practice of Murabaha in Indonesia.



specifically on the base of deferred payment. Therefore, the trading activities which

conducted by the parties might be run either via the customer as agent or via a third party

This possible structures of Murabaha involve42

:

The most ideal possibility is direct trading concerning the fulfilment of the Murabaha

basics. However, there might be several difficulties in retail trading business, specifically for

PBI No. 9/19/PBI/2007 Tentang Pelaksanaan Prinsip Syariah Dalam Kegiatan

Penghimpunan Dana Dan Penyaluran Dana Serta Pelayanan Jasa Bank Syariah (Bank Indonesia Regulation

No. 9/19/PBI/2007: SG No. 165 Dpbs, 2007). Article 1 (3c). View Item.

SEBI No. 10/14/DPbS Tentang Pelaksanaan Prinsip Syariah Dalam Kegiatan

Penghimpunan Dana Dan Penyaluran Dana Serta Pelayanan Jasa Bank Syariah (Bank Indonesia Circular

View Item.


), June 2016, 1-16

8595, E. ISSN. 2443-3497



Islamic Principle in the

reveals financing at Islamic Bank relates to the purchase

and Istishna.

, one of the requirements of

contract is bank provides fund to purchase a good relating to Murabaha transaction

, The Qur’an, Surah An

O you who have believed, do not consume one another's wealth unjustly155 but only

do not kill yourselves [or one

cannot stand [on the Day of Resurrection] except as

That is because they say,

Allah has permitted trade and has forbidden


ns to [dealing in

those are the companions of the Fire; they will abide eternally

O you who have believed, fulfill [all]



refore, the trading activities which are

agent or via a third party

concerning the fulfilment of the Murabaha

, specifically for


(Bank Indonesia Regulation

SEBI No. 10/14/DPbS Tentang Pelaksanaan Prinsip Syariah Dalam Kegiatan

(Bank Indonesia Circular

Review Article



banking business. One of them is the managerial difficulties an

and this concern could be addressed via the introduction

1.4.2 Company (seller) Purchases via an agent or a third party

Another possibility is through an agent

which relates to customers’ requests for Murabaha business

principle of taking possession and commercial hazard by the bank or company for the period

between the assets purchase from the trader or merchant and their transaction to the customer

on Murabaha45

. The client could not guarantee the transportation risk of the commodities if it

is directly delivered by a third party to t

responsibility46

.

1.4.3 Murabaha via the customer as an Agent.

This structure is one of the safe

threats and related difficulties. The client ought to describe to

his/her agency positions47

. However, the trading structure via a customer as Agent is likely to

create Murabaha operation a back door to interest,

maintain it relating to Islamic principle

2. Discussion

All valid contracts in banking

of the prohibition of Maysir or gambling, Gharar or uncertainty and Riba or interest. The

majority of scholars, Kettel and Ayub believed that Islamic contract must avoid them in

current business transaction, notably

allowable when among the Moslem jurists have no broad consensus or contract that are

prohibited and the contract that involves uncertainty is not valid

or school allows this with or without circumstances, then this is considered as allowable

uncertainty50

.

43

Ibid. 44

Ibid. 45

According to the AAOIFI standard, the option of a third party agent is better: it recommends that the customer

should not be appointed to act as agent for purchase of items for Murabaha except in situations of dire need .

AAOIFI, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Standard

2004). Clause 3/1/3, p. 117. View Item.46

Ayub, Understanding Islamic Finance47 AAOIFI, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) St

Clause 3/1/1, pp. 117. 130. 48


Sa’aati, “The Permissible Gharar (Risk) in Classical Islamic Jurisprudence.”50 Ibid.


. One of them is the managerial difficulties and the possibility of corruption

d be addressed via the introduction of effective internal controls

Purchases via an agent or a third party

Another possibility is through an agent to retain inventory or to obtain or buy items

which relates to customers’ requests for Murabaha business44

. It is likely to meet the Islamic


from the trader or merchant and their transaction to the customer

The client could not guarantee the transportation risk of the commodities if it

is directly delivered by a third party to the seller as the goods safety of

Murabaha via the customer as an Agent.

s structure is one of the safe way for company (seller) to prevent commodity

threats and related difficulties. The client ought to describe to the supplier or trader about

However, the trading structure via a customer as Agent is likely to

ion a back door to interest, hence, there is a need extra care to

maintain it relating to Islamic principle48

.

in banking finance transaction must obey Islamic principle in terms



current business transaction, notably murabaha contract. However, uncertainty can be


prohibited and the contract that involves uncertainty is not valid49

. When one Moslem scholar




Organization for Islamic Financial Institutions (AAOIFI) Standard

.


Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) St



__

9

d the possibility of corruption

of effective internal controls43

.

retain inventory or to obtain or buy items

It is likely to meet the Islamic


from the trader or merchant and their transaction to the customer

The client could not guarantee the transportation risk of the commodities if it

he seller as the goods safety of the owner

way for company (seller) to prevent commodity-based

the supplier or trader about

However, the trading structure via a customer as Agent is likely to

hence, there is a need extra care to

must obey Islamic principle in terms



uncertainty can be


When one Moslem scholar




Organization for Islamic Financial Institutions (AAOIFI) Standard (Bahrain,

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Standard.

__

10

It is true that interest, gambling and uncertainty are prohibited by the theory of

Islamic Jurisprudence. However, the practice

the theory, notably murabaha contract in house financing

finance has to purchase a house

purchases the item that is needed by customer and then bank sells this to the client with the

purchase price plus the profit, but the transactions must be valid and avoid riba, gharar and

maysir. In contrast, Islamic finance might not have and purchase

One of the alternative contracts that is implemented by Islamic bank for house

financing is Murabaha. There are several contemporary issues

between the theory and the practice of Islamic finance in Indonesia reg

contract in house financing. One of the issues is Murabaha via Shares. It has been conducted

by several Sharia banks. Payment should be directly made by Islamic banks to the brokers

and agent should not appoint the client for buying

banks could sell them onward on a basis of Murabaha,

should wait for tangible transfer because it

price risk51

. Shares Murabaha would be “buy

sister matter or concern of the customer. Therefore, although it is allowable

require to be more careful regarding the concerns of Islamic compliance

In addition, the second

whether Islamic bank could put the goods up for sale legally to its customer or not because

the theory that is advised by most scholar reveals that when Islamic bank execute

with the customer, it has to take full possession of the item or the object before putting the

object up for sale, but it has no possession and the items does not exist

would be a car financing. It might have the difficulties

warehouse capabilities to fulfill the terms and prerequisite of murabaha contract once it has to

take full possession of the goods before putting the item up for sale.

these difficulties, it should make ag

agreement and make a separate offer and acceptance between the customer and Islamic

financial intermediary institutions

51


Ibid. 53

Ibid. 54 Ibid.

Rechtsidee, 3 (1),

P. ISSN. 2338-8595, E. ISSN. 2443




Islamic Jurisprudence. However, the practice of Islamic finance in Indonesia is not similar to

abaha contract in house financing. This theory shows that Islam

finance has to purchase a house earlier before selling it to clients. That is to say, bank

s needed by customer and then bank sells this to the client with the


In contrast, Islamic finance might not have and purchase a house earlier


There are several contemporary issues that relates to the

between the theory and the practice of Islamic finance in Indonesia regarding

One of the issues is Murabaha via Shares. It has been conducted

banks. Payment should be directly made by Islamic banks to the brokers

and agent should not appoint the client for buying the shares. After this is conducted,

banks could sell them onward on a basis of Murabaha, and once the payment takes time, they

should wait for tangible transfer because it takes mostly several days, so they have to take the

baha would be “buy-back” that is prohibited once it is

sister matter or concern of the customer. Therefore, although it is allowable

require to be more careful regarding the concerns of Islamic compliance52

.

the second issues relates to executing time of Murabaha, particularly

put the goods up for sale legally to its customer or not because

he theory that is advised by most scholar reveals that when Islamic bank execute


object up for sale, but it has no possession and the items does not exist53

. A good example

t might have the difficulties regarding the risks and a lack of


take full possession of the goods before putting the item up for sale. However,

difficulties, it should make agency contract as a part and package of Murabaha


financial intermediary institutions54

.

c Finance.

), June 2016, 1-16

8595, E. ISSN. 2443-3497




of Islamic finance in Indonesia is not similar to

. This theory shows that Islamic

That is to say, bank

s needed by customer and then bank sells this to the client with the


in practice.


the differences

arding murabaha

One of the issues is Murabaha via Shares. It has been conducted

banks. Payment should be directly made by Islamic banks to the brokers

the shares. After this is conducted, Sharia

once the payment takes time, they

several days, so they have to take the

back” that is prohibited once it is been of any

Sharia banks

Murabaha, particularly

put the goods up for sale legally to its customer or not because

he theory that is advised by most scholar reveals that when Islamic bank executes Murabaha


A good example

risks and a lack of


However, to resolve

ency contract as a part and package of Murabaha


Review Article



However, Islamic finance in Indonesia

gambling and interest in Islamic business.

bank has not purchased a car or product, it does not disobey Islamic principle because its

business does not include uncertainty, gambling and interest. In addition, the

Murabaha in Indonesia implements MPO that is permissible.

Firstly, murabaha contract between Islamic bank and the client in car financing does

not include excessive Gharar regarding the prohibition of uncertainty. It is because the items

or car is certain. According to Maliki school and Al

has the object identity could be permissible Gharar

buyer (the bank clients) would obtain the clarity of the car. This could b

the car, so the buyer could recognize the type and quality of purchased car. Prior to entering

into murabaha contract, Islamic finance would ask a client or borrower to not only make a

promise to buy a car but also write the model or

is bought. Moreover, it might ask a customer to act as a representative to

car dealer where a client would like to purchase. A client would gain clear and certain

information about the price of the car and the time of car delivery from the automotive dealer

or the broker. Therefore, with regards to certain car, time of delivery, and price, the

transaction does not consist of Gharar.

Secondly, murabaha contract does not consist of Riba. It is

not lend money to buy a car. Al

Riba is addition as a requirement for the loan agreement

of the client is not a borrower. However, t

bank and the client are the seller and the buyer. Islamic bank sells a car to the buyer (the

client). The client who is the buyer would not pay interest to Islamic Bank. Therefore, the car

financing is free from interest or Riba.

Moreover, murabaha contract does not include Maysir. It is because the car financing

does not play the game or involve gambling activitie

risk taking58

. Furthermore, Brenner

is the hope of becoming rich quickly

55

Sa’aati, “The Permissible Gharar (Risk) in Classical Islamic Jurisprudence.”56Al-Qurtubi, “al-Jami” Li Ahkam Al-Qur’an Volume 357

Bakar, Riba and Islamic Banking and Finance (Essential Reading in Islamic Finance)58

Samuelson, Economics. pp. 425-426 59

Brenner, Gambling and Speculation A Theory, a History, and a Future of Some Human Decisions

112.


inance in Indonesia obeys Islamic law in terms of uncertainty,

ing and interest in Islamic business. Car financing as an example, even though Islamic


business does not include uncertainty, gambling and interest. In addition, the

Murabaha in Indonesia implements MPO that is permissible.

contract between Islamic bank and the client in car financing does


r is certain. According to Maliki school and Al-Saati, the commercial transaction that

has the object identity could be permissible Gharar55

. There is no risk in car financing as the

buyer (the bank clients) would obtain the clarity of the car. This could be done by identifying



promise to buy a car but also write the model or specification of this to ensure the desire car

is bought. Moreover, it might ask a customer to act as a representative to purchase


of the car and the time of car delivery from the automotive dealer


transaction does not consist of Gharar.

contract does not consist of Riba. It is because Islamic ban

car. Al Qurtubi stated that Riba is excessive56

. According to Bakar,

Riba is addition as a requirement for the loan agreement57

. In murabaha contract, the position

a borrower. However, the positions or the relationship between the Islamic



ree from interest or Riba.

contract does not include Maysir. It is because the car financing

does not play the game or involve gambling activities. According to Samuelson

. Furthermore, Brenner argued that the reason they do speculation and gambling

is the hope of becoming rich quickly59

. The bank as a seller sells the car to the client


Qur’an Volume 3. p. 348.

slamic Banking and Finance (Essential Reading in Islamic Finance). p. 7.

Gambling and Speculation A Theory, a History, and a Future of Some Human Decisions

__

11

Islamic law in terms of uncertainty,

though Islamic


business does not include uncertainty, gambling and interest. In addition, the practice of

contract between Islamic bank and the client in car financing does


Saati, the commercial transaction that

There is no risk in car financing as the

e done by identifying



specification of this to ensure the desire car

purchase this in a


of the car and the time of car delivery from the automotive dealer


because Islamic bank does

According to Bakar,

contract, the position

he positions or the relationship between the Islamic



contract does not include Maysir. It is because the car financing

s. According to Samuelson, it reflects

they do speculation and gambling

The bank as a seller sells the car to the client, and the

Gambling and Speculation A Theory, a History, and a Future of Some Human Decisions. pp. 90-

__

12

client buys a car from the Islamic bank. The car is not from lottery. Furthermore, car

financing does not have specula

information about the car that is purchased.

In addition, according to Venardos

the transaction fulfills the circumstances because the existence of the

real60

. The buyers could recognize the characteristic of the car, so they could inspect the car

before buying it. Moreover, to

the car must be halal.

Besides, according to the basic regulation of the

central bank and Sharia Supervisory Board (Majelis

regulations. Some of them are the Islamic Banking Law

of Sharia Supervisory Board63

. Furthermore, Sharia Supervisory Board has supervised this

product to obey Islamic principle regarding

Moslem jurists have pointed out the obvious identification of the object contract and

delivery to the buyer definitely. In order to be a valid sale, Islamic finance need a several

number of terms and circumstances regarding the object contract. One of the

must exist and the seller must own things that be sold. The seller who does not have the

possession of things cannot sell. For instance, once Islamic bank would like to sell a car that

is currently owned by the car dealer to customer. Howe

would purchase this from a car dealer and deliver it to customer subsequently, the contract

would be invalid and void regarding the

promise to sell it to customer64.

It is related to conditions which take possession of the commodities prior to their

trade. According to Imam Bukhari: “

randomly in the life time of the Prophet. Once they attempted to trade it prior to owning

they were penalized”.65 According to the commentary of Qastalani on Sahih Bukhari states

that prior to owning the commodities by the seller, the sale is unlawful regarding

60

Vernandos, Islamic Banking and Finance in South61

Indonesia, UU Nomor 21 Tahun 2008 Tentang Perbankan Syariah

View Item. 62 Governor of Bank Indonesia, PBI No. 10/17/PBI/2008

Syariah (Bank Indonesia Regulation No. 10/17/PBI/2008: SG No. 137 Dpbs, 2008).63

Indonesia, DSN No.04/DSN-MUI/IV/2000 Tentang Murabaha64

Ayub, Understanding Islamic Finance65 Ibid.

Rechtsidee, 3 (1),

P. ISSN. 2338-8595, E. ISSN. 2443




financing does not have speculation as the client or the buyer would obtain certain

about the car that is purchased.

In addition, according to Venardos about minor uncertainty in the previous subtopic,

the transaction fulfills the circumstances because the existence of the car that is purchased is

The buyers could recognize the characteristic of the car, so they could inspect the car

obtain valid transaction that comply with Islamic principle,

o the basic regulation of the murabaha contract in Indonesia,

central bank and Sharia Supervisory Board (Majelis Ulama Indonesia–MUI) issued

regulations. Some of them are the Islamic Banking Law61

, Central Bank regulation


obey Islamic principle regarding fatwah of Murabaha.



number of terms and circumstances regarding the object contract. One of them is the object


sell. For instance, once Islamic bank would like to sell a car that

is currently owned by the car dealer to customer. However, it is hopeful that Islamic finance


would be invalid and void regarding the Sharia. At most, Islamic finance could make a

related to conditions which take possession of the commodities prior to their

trade. According to Imam Bukhari: “Ibn Umar described “ I saw the people purchase food

randomly in the life time of the Prophet. Once they attempted to trade it prior to owning

According to the commentary of Qastalani on Sahih Bukhari states


Islamic Banking and Finance in South-East Asia. p. 39.

UU Nomor 21 Tahun 2008 Tentang Perbankan Syariah (/Law Number 21: SG No. 94, 2008).

PBI No. 10/17/PBI/2008 Tentang Produk Bank Syariah Dan Unit Usaha

(Bank Indonesia Regulation No. 10/17/PBI/2008: SG No. 137 Dpbs, 2008). View Item.



), June 2016, 1-16

8595, E. ISSN. 2443-3497




tion as the client or the buyer would obtain certain

about minor uncertainty in the previous subtopic,

car that is purchased is

The buyers could recognize the characteristic of the car, so they could inspect the car

obtain valid transaction that comply with Islamic principle,

contract in Indonesia,

–MUI) issued

, Central Bank regulation62

, Fatwah




m is the object


sell. For instance, once Islamic bank would like to sell a car that

ver, it is hopeful that Islamic finance


. At most, Islamic finance could make a

related to conditions which take possession of the commodities prior to their

Ibn Umar described “ I saw the people purchase food

randomly in the life time of the Prophet. Once they attempted to trade it prior to owning it,

According to the commentary of Qastalani on Sahih Bukhari states


(/Law Number 21: SG No. 94, 2008).

Tentang Produk Bank Syariah Dan Unit Usaha

Review Article



Muhammad, Imam Shafi’e and several other Moslem jurists

jurists, involve the Hanafi asserted that

adequate that the commodities must exist and be totally recognized, there is no room for

dispute and the physical ownership is not essential for a lawful and valid tr

Furthermore, it is determined in Majallah that the delivery of the commodity by the

done once they place it aside for the buyer

Generally, in contemporary Murabaha

Murabaha to Purchase Ordered (MPO) that is an agreement where Islamic bank, based on

the request of clients, buy the commodities

clients on a deferred payment base

1. Islamic banks generally run business as intermediary institution. They would not be

dealers, agents or grocers as the cost of warehouse or inventory storage may not be

inexpensive.

2. The authority or central bank generally do not permit the Islamic bank to run trading as

their main business. Most Islamic banks buy merely the commodities for which they

obtain request from their customer.

Regarding these aspects, Islamic finance has been permitted not essentially to provide

inventory of the commodities to be sold using Murabaha. According to the

Accounting and Auditing Organization for Islamic Financial Institutions (AAO

Murabaha, it is allowable for Islamic finance to buy the commodities merely responding to

their client’s request71

. However, this request might not be taken account into a promise by

the customer to assure the commodities, except when the promise ha

form72

.

Considering all the points made, Islamic finance requires contract to run commercial

transactions. It must not disobey both regulation and Islamic law. In

even though Islamic banks does not own a house

66 Irshad-al-Sari, Sharah, Sahih Bukhari, 4, p. 5767

Ibid. p. 136. 68

Ali Ben Abi Bakr AI-Marghinani, AI

58-59. 69 Ayub, Understanding Islamic Finance70

Ibid. 71

Ibid. 72

AAOIFI, Accounting and Auditing Organization for Islamic Financial Institut

113.


Muhammad, Imam Shafi’e and several other Moslem jurists66 . However, many Moslem

urists, involve the Hanafi asserted that to conduct lawful commercial transactions, it is


dispute and the physical ownership is not essential for a lawful and valid tr

Furthermore, it is determined in Majallah that the delivery of the commodity by the

it aside for the buyer68.

, in contemporary Murabaha, Islamic bank might take the practice of


commodities from dealer or a third party and sell it to the

clients on a deferred payment base69. The MPO need comes from the following aspects

Islamic banks generally run business as intermediary institution. They would not be


ank generally do not permit the Islamic bank to run trading as


obtain request from their customer.


inventory of the commodities to be sold using Murabaha. According to the Sharia

Accounting and Auditing Organization for Islamic Financial Institutions (AAO


However, this request might not be taken account into a promise by

the customer to assure the commodities, except when the promise has been created in the due


transactions. It must not disobey both regulation and Islamic law. In murabaha

Islamic banks does not own a house, it obeys Islamic principles in terms of the

Sari, Sharah, Sahih Bukhari, 4, p. 57

AI-Hidayah with Fath Al-Qadir, 3rd ed. (Cairo: Amiria Press, 1942).


Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Standard

__

13

However, many Moslem

conduct lawful commercial transactions, it is


dispute and the physical ownership is not essential for a lawful and valid trade 67 .

Furthermore, it is determined in Majallah that the delivery of the commodity by the sellers is

, Islamic bank might take the practice of


from dealer or a third party and sell it to the

The MPO need comes from the following aspects70.

Islamic banks generally run business as intermediary institution. They would not be


ank generally do not permit the Islamic bank to run trading as



Sharia standard of

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) on


However, this request might not be taken account into a promise by

s been created in the due


murabaha agreements,

in terms of the

rd ed. (Cairo: Amiria Press, 1942). pp.

ions (AAOIFI) Standard. p.

__

14

prohibition of uncertainty, gambling and interest. However, it is widely argued that there is a

need to analyze and conduct further research

3. Conclusions

Islamic finance must obey

of Islamic ethics must govern all business transaction.

definitely approve injustice and any exploitation to both or any of the parties.

several prohibitions. Therefore, Islamic bank must obey religious belief, particularly

Murabaha in banking transaction

In general, Islam forbids all business transact

Gambling or Maysir, Riba. The practice of commercial transactions that include Gharar,

Riba, or Maysir would cause injustice. All trade would not valid once they include all or one

of them. Therefore, Islam prohibits and blocks all transactions

to the parties73

.

All things considered, Islamic banks need to enter into a trading transaction with

customers. They could not conduct commercial businesses, specifically

consists of Gharar, Riba and Maysir. Alt

must comply with Islamic principle in terms of the

is widely argued that not only Sharia supervisory board and regulators but also practitioners

and Islamic financial institutions might need to be creative, innovative and active to develop

both services and product based on Islamic principle

Islamic business transaction more internationally and to tackle several difficulties e

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