Sharia Banking Overshadowed by Criminal Penalties: Who Dares to Take the Risk?
The Sharia economy continues to be promoted as one of the new engines of national growth, but at the most operational level, an anxiety that cannot be underestimated is emerging: more and more decision-makers in banks, including Sharia banks, feel that today’s business decisions could turn into criminal matters in the future.
This anxiety stems from experience, not imagination. In law enforcement practice, problematic financing is often interpreted too hastily as synonymous with corruption, whereas the banking world operates on risk, prudence, and good faith.
At this point, the issue is not merely about the fate of bank officials. What is at stake is greater: the courage of the Sharia financial sector to carry out its intermediation function to support the business world. If every problematic financing is always overshadowed by the threat of criminal penalties, then the logic at work is no longer healthy business logic, but rather a logic of survival for personal safety.
This is not ordinary credit
The most fundamental mistake in reading this issue is equating all bank financing with a single logic. In Sharia banking, the legal relationship is not merely debt-creditor, but also contracts, profit-sharing schemes, partnerships, justice, and risk distribution that have been inherent characteristics of Sharia financing from the start. Therefore, problematic financing in certain contracts cannot automatically be treated as evidence of malicious intent or deviation that could lead to criminal penalties.
In the jurisprudence of muamalah, profit always comes with the possibility of loss. So, when murabahah, mudharabah, musyarakah, or ijarah financing defaults, the legal question should not immediately jump to who should be criminalised. The correct question is more fundamental: were the procedures fulfilled, was there a conflict of interest, was there fabrication, was there a flow of personal benefits, and was there malicious intent from the beginning.
The expensive chilling effect
Sharia bank officials face layered pressures. They must comply with prudence principles and governance like conventional banks, but at the same time, they must ensure that every financing is consistent with Sharia principles and the character of the contract used.
When this complexity is added to the threat of criminalisation, a situation that is expensive for the economy arises: people are no longer willing to make decisions that are reasonable in business terms because they fear being misinterpreted criminally.
The subsequent effect is clear. Financing that should flow to productive sectors, SMEs, and potential business actors is instead held back. People fear later legal interpretations more than the actual business risks that are a normal part of banking business. If left unchecked, the Sharia economy will stall not due to a lack of instruments, but because its institutional courage is locked by legal uncertainty.
The Constitutional Court provides a brake, not yet a fence
The Constitutional Court Decision Number 123/PUU-XXIII/2025 is clearly important because it provides an interpretation of Article 14 of the Corruption Law, a provision that has so far served as a bridge to pull sectoral violations into the corruption regime. In the prevailing narrative, the Constitutional Court affirms that Article 14 remains constitutional as long as the referenced sectoral laws indeed meet the elements of corruption offences.
Normatively, this is good news because it affirms that not all sectoral violations automatically become corruption. However, for Sharia banking, this decision does not yet provide full reassurance. The reason is simple: there is a general boundary, but the operational parameters are not yet clear enough, especially when cases arise from business decisions built on analysis, market assumptions, and business risks.
Therefore, Constitutional Court Decision 123/2025 is more appropriately read as an initial constitutional brake, not a completed fence. This decision prevents the simplification that all sectoral violations are corruption, but it is not detailed enough to protect decision-makers who act professionally and in good faith from excessive pulling of cases into the criminal realm.
Criminal law is not a judge of risk
From the perspective of criminal law theory, not every loss is a crime. The new Criminal Code affirms two main principles: no penalty without a clear rule and no penalty without fault. This means a person can only be penalised if their actions are explicitly formulated in the law and their personal fault can truly be proven.
In the banking context, this means that defaulted financing should not automatically be considered a criminal offence just because the outcome is bad. The law must first answer: is there mens rea, is there actus reus, is there collusion, gratification, manipulation, or concrete abuse of authority. If the answer is no, then what occurred is legitimate business risk, not corruption.
This point is strengthened when read together with the new Criminal Procedure Code, which has been in effect since January 2026 and tightens proof standards, affirms due process of law, and provides stronger room for judges to assess not only the content of evidence but also how it was obtained. This means criminal cases cannot stand on assumptions, opinion pressures, or merely on bad outcomes that emerge later.
A fortress for decision-makers
In the corporate and banking environment, the business judgment rule doctrine is highly relevant. This doctrine protects decision-makers who act with sufficient data, without conflicts of interest, for legitimate purposes, and in good faith from being immediately penalised just because the final outcome does not meet expectations. Some legal studies even position it as an important reference for judges to distinguish between banking crimes and legitimate business policies.
For Sharia banking, this fortress is even more important. In contracts