According to the language , Sharia is derived from the word meaning Sharai rules or provisions . Meanwhile, according to the terms , sharia means of partnership and solidarity ( sharing ) in the profit and risk . While understanding the bank , according to Law no. 10 th 1998 is the business entity that collect public funds in the form of savings and channel them to the public in the form of credit or other forms of lainnyadalam order to improve the lives of many people . Thus, the Islamic bank is an intermediary organization that collects funds from the public and distribute it back to the people in need in the form of financing / credit with the principle of profit sharing ( profit sharing ) and fairness ( equity ) to realize a healthy economy , transparent , and happiness of the world and hereafter .
Developments in Indonesia
The existence of Islamic banks in Indonesia starting from MUI workshop on banking in 1990. Then followed the issuance of Law No. 7/1992 on Banking, which accommodates the principle activities of the bank with the results ( Arie Widiarto , 2002) . The only Islamic bank that existed at the time it was Bank Muamalat Indonesia ( BMI ) . In a further development of Islamic banking law was amended by Law no.10 of 1998.
The number of banks grew rapidly from only one commercial banks and 78 sharia SRB in 1998 to two Islamic banks , three Islamic business units ( UUS ) , and 81 RBs sharia in late 2001 . The number of Islamic banks branches grew from 26 to 51 . At the end of 2005 , the number of Islamic banks ( headquarters , UUS , and kantot branches ) at 422 plus the 92 BPR Sharia already operating .
Similar to conventional banks , Islamic banks also serve as an intermediary institutions that mobilize funds from the public and distribute it back to the people in need in the form of financing . Only difference is that Islamic banks do not apply the interest principle but uses the principle of sharing .
Business activities that can be carried out by Islamic banks or commercial banks that apply the principles of sharia in Indonesia, according to Article 28 of Decree DIR BI 32/34/1999 is as follows :
Collect funds from the public in the form of deposits which include :
checking based on the principle wadiah
savings based on the principle wadiah or mudaraba
based on the principle of mudaraba deposits , or
form or another based on the principle of mudaraba wadiah
Channeling funds through :
buying and selling based on the principles of murabaha , istishna , ijara , salam , selling other
financing for results based on the mudaraba principle , Musharaka , the other results
Other financing based on the principle hiwalah , Rahn , qard
buying , selling , and at the risk of his own or guarantee securities issued by third parties on the basis of real transactions ( underlying transaction ) based on the principle of merchantability or hiwalah .
buying government securities or Bank Indonesia issued based on Islamic principles
move the money for its own sake or customers on the basis of power of attorney .
accept bill payments on securities issued and perform calculations with or between third parties on the basis of power of attorney .
provides a place to store goods and securities based on the principle of trust wadi'ah yad .
care activities including its administration for the benefit of another party pursuant to a contract with the principle of power of attorney .
placement of funds from customer to customer in the form of securities that are not listed on a stock exchange is based on the principle ujr .
provide a letter of credit on the basis of power of attorney , murabaha , mudaraba , Musharaka , and wadi'ah , as well as provide a bank guarantee facility based on the principle of kafalah .
conducting business based on the principle ujr debit card .
activities on the basis of power of attorney, trustee
perform other activities commonly performed by all the banks approved by the Shariah Supervisory Board .
In addition to the above activities such as Islamic banks can also do the following activities :
conduct foreign exchange operations based on the principle Sharf
equity activities based on the principles of Musharaka and mudaraba or banks or other companies conducting business based on sharia principles
activities based on the principle of temporary investment or Musharaka and mudaraba financing due to the failure to address the requirements premises should pull back its shares
act as founder pension funds and pension fund trustees bedasarkan Islamic principles conformed to the provisions of the pension legislation applicable
bank can act as an agency Baitul Mal , which receive zakat funds , infaq , sadaqah , waqf , grants , or other sosila funds and channel them to the rightful compensation in the form of loans and or virtue ( qard ul hasan )