Bank interest and syaria
Bank interest and syaria
From Tempo
As the polemics on the ruling made by the Council of
Indonesian Ulema (MUI) that bank interests are forbidden
according to the Islamic law are intensifying, I have been
prompted to comment as follows:
I know for sure that MUI has competent people who are very
knowledgeable about the Islamic law, especially in relation to
economic matters. In fact, a similar ruling was also made earlier
in other parts of the world (at the Mu'tamar al-Fiqh al-Islam in
Paris in 1951, in Cairo in 1965 and at the conferences of the
Organization of Islamic Conference (OIC) in 1985 and 1986.
Regarding a bank interest, the crux of the matter lies in the
entire banking process, involving how the fund is exploited,
where it is channeled and to whom it is lent. An interest is only
the end result of this process. God will not consider only the
end result but will take into account the entire process.
When you deposit your money in a bank, you generally do not
know how the bank makes use of your money. What you know is that
you get an interest at the end of a month. When it comes to
depositing money in a bank, what counts to a good Muslim is to
know exactly his or her money will be used in conformity with the
Islamic law.
Indeed, it is the job of the MUI to announce what is forbidden
by the Islamic law and what is not. Then it all depends on each
Muslim individual whether or not to comply with this ruling.
In this context, there is fear that over Rp 80 trillion will
be withdrawn from conventional banks and transferred to Islamic-
law-based banks (syaria banks). As there are only two such banks
in this country plus several syaria units of some commercial
banks, it is also feared that these syaria banks and units will
not be able to absorb this huge fund. This fear is indeed
groundless. The huge funds can in fact be channeled to small and
medium-sized companies as they usually find it hard to obtain
loans from commercial banks.
It should be borne in mind that between 1998 and 2002, when
conventional/commercial banks needed the central bank's liquidity
support funds (BLBI) for their survival, syaria banks proved to
be invulnerable to the ongoing economic and monetary crisis and
needed no BLBI.
ACHMAD HARUN
Jakarta