Wanprestasi of Mudharabah Financing in Sharia Banking

DOI

10.2991/iconprocs-19.2019.57How to use a DOI?

Keywords

Wanprestasi, mudharabah financing, Sharia Bank

Abstract

This study aims to determine the completion of wanprestasi on mudharabah financing in sharia banking. To achieve these objectives, the normative juridical approach method is used. Conclusion, the existence of sharia banking in Indonesia is a bank which operates in line with Islamic sharia provisions, especially those concerning the procedures based on Islamic value. According to Law Constitution, number 10 in 1998 stated that Sharia Banks are Banks that carried out their business activities based on sharia principles while in their payment activities provide some services. The basic philosophy operation in Sharia banks relates all transaction included as efficiency, justice and corporate. Efficiency refers to the principle of mutual help synergistically to get the greatest profit. Sharia bank activities in terms of determining the price of their products are very different from conventional banks. Pricing in Sharia banks is based on an agreement between the bank and the customer which relates with the type of deposit and time period, it also will determine the average of profit share that the customer will receive. The products in Sharia banks include financing based on the profit-sharing principle (mudharabah). Sharia banks used Qur'an and hadith as the basic value in carrying out its activities. Sharia banks forbid the use of the price of their products with a certain interest. Basically, Sharia banks assume that bank interest is usury. Mudharabah financing is based on a contract or financing agreement between Shahibul Maal and Mudharib. The agreement is based on the agreement in general in the written form in Article 1320 of the Civil Code. The contents of the agreement include, among others, the agreement on financing based on the principle of mudharabah, profit sharing and regarding the risk of failure or loss of business or financed projects will be certified by Sharia banks as long as the failure or loss is not caused by mudharib. The parties of the mudharabah financing agreement are noticed to have defaulted if the party infringed the clause in the agreement. In the event of default resulted that problematic financing occurred, the solution is to conduct a financing restructuring, settlement through collateral, settlement through BASYARNAS, elimination of financing, bankruptcy application. Furthermore, to minimize the problematic financing, banks are required to apply prudential principles as stipulated in the law.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Wwin Wiyono
AU  - Eti Erowati
PY  - 2019/05
DA  - 2019/05
TI  - Wanprestasi of Mudharabah Financing in Sharia Banking
BT  - Proceedings of the First International Conference on Progressive Civil Society (ICONPROCS 2019)
PB  - Atlantis Press
SP  - 273
EP  - 276
SN  - 2352-5398
UR  - https://doi.org/10.2991/iconprocs-19.2019.57
DO  - 10.2991/iconprocs-19.2019.57
ID  - Wiyono2019/05
ER  -