MUI’s Strategic Role in Sharia Banking
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Arofah Windiani representing the Relevant Party MUI testifying virtually at the material judicial review hearing of Law No. 21 of 2008 on Sharia Banking, Thursday (5/12/2022). Photo by Humas MK/Ifa.


Thursday, May 12, 2022 | 18:27 WIB

JAKARTA, Public Relations—The birth of sharia banking is inseparable from the strategic role of ulemas, especially the Indonesian Ulema Council (MUI), which provides guidance, supervision, and direction for the development of Islamic banking ensure its sustainability. In this case, the MUI has taken steps to establish the National Sharia Board of the MUI (DSN-MUI), which aims to carry out MUI’s duties in establishing fatwas over the systems, activities, products, and services in sharia economic, financial, and business institutions, and overseeing its implementation in financial business development in Indonesia.

Such was the testimony of the Deputy Secretary of the MUI’s Law and Human Rights Commission Arofah Windiani at the sixth material judicial review hearing of Law No. 21 of 2008 on Sharia Banking on Thursday, May 12, 2022. The case No. 65/PUU-XIX/2021 was filed by Rega Felix, who challenges Article 1 point 12 and Article 26 paragraphs (1), (2), and (3) of the Sharia Banking Law. The hearing was to hear the MUI’s testimony as the Relevant Party.

Arofah further explained that the DSN-MUI’s main tasks and functions ultimately boils down to its strategic role as an institution that is trusted by the public and the government to oversee, develop, and oversee the operation of sharia banking. Therefore, the MUI was of the opinion that the norms in Article 1 point 12 of the Sharia Banking Law, which states that sharia principles are Islamic legal principles in banking activities based on fatwas issued by the institution that has the authority to pass fatwas in the sharia sector, was accurate and in accordance with the 1945 Constitution.

Also read: Stipulation of Sharia Banking Principles Challenged 

MUI’s Authorities

The Vice Chairman of the MUI’s Law and Human Rights Commission Syaeful Anwar testified that sharia banking is closely related to Islamic agreements or sharia contracts, whose provisions are regulated in the Quran, hadith, ijma’, and qiyas. This can only be done by people who meet the requirements related to these provisions, so that it becomes relevant and easy to implement in sharia banking operations. Thus, the MUI believed that its authority to issue sharia banking fatwas was appropriate.

Thursday, May 12, 2022 | 18:27 WIB

JAKARTA, Public Relations—The birth of sharia banking is inseparable from the strategic role of ulemas, especially the Indonesian Ulema Council (MUI), which provides guidance, supervision, and direction for the development of Islamic banking ensure its sustainability. In this case, the MUI has taken steps to establish the National Sharia Board of the MUI (DSN-MUI), which aims to carry out MUI’s duties in establishing fatwas over the systems, activities, products, and services in sharia economic, financial, and business institutions, and overseeing its implementation in financial business development in Indonesia.

Such was the testimony of the Deputy Secretary of the MUI’s Law and Human Rights Commission Arofah Windiani at the sixth material judicial review hearing of Law No. 21 of 2008 on Sharia Banking on Thursday, May 12, 2022. The case No. 65/PUU-XIX/2021 was filed by Rega Felix, who challenges Article 1 point 12 and Article 26 paragraphs (1), (2), and (3) of the Sharia Banking Law. The hearing was to hear the MUI’s testimony as the Relevant Party.

Arofah further explained that the DSN-MUI’s main tasks and functions ultimately boils down to its strategic role as an institution that is trusted by the public and the government to oversee, develop, and oversee the operation of sharia banking. Therefore, the MUI was of the opinion that the norms in Article 1 point 12 of the Sharia Banking Law, which states that sharia principles are Islamic legal principles in banking activities based on fatwas issued by the institution that has the authority to pass fatwas in the sharia sector, was accurate and in accordance with the 1945 Constitution.

Also read: Stipulation of Sharia Banking Principles Challenged 

MUI’s Authorities

The Vice Chairman of the MUI’s Law and Human Rights Commission Syaeful Anwar testified that sharia banking is closely related to Islamic agreements or sharia contracts, whose provisions are regulated in the Quran, hadith, ijma’, and qiyas. This can only be done by people who meet the requirements related to these provisions, so that it becomes relevant and easy to implement in sharia banking operations. Thus, the MUI believed that its authority to issue sharia banking fatwas was appropriate.

“The Indonesian Ulema Council through DSN-MUI as a collective, mufti jama’i fatwa authority or ijtihad institution has a highly strategic role in the development and association of sharia economy, finance, and business. Therefore, Article 1 point 12 [and] Article 26 paragraph (1), paragraph (2), paragraph (3) of the Sharia Banking Law are appropriate, accurate, and constitutional,” he explained before Chief Justice Anwar Usman and the other eight constitutional justices.

Also read: House Explains MUI’s Authority Over Fatwa on Sharia Banking 

Syaeful further responded to the Petitioner’s argument that the Sharia Banking Law provided delegasi blangko to the MUI, the Bank of Indonesia (BI), and the OJK (Financial Services Authority), leading to disharmony in sharia banking regulations. The MUI was of the opinion that the Elucidation to Article 2 of the Sharia Banking Law clearly stipulates that in sharia banking it is strictly prohibited to conduct transactions that are contrary to sharia principles, such as usury, gambling, ambiguous transactions (gharar), as well as those that are haram and unjust. Article 26 paragraphs (4) and (5) of the Sharia Banking Law also explicitly stipulates that MUI fatwas can later become OJK regulations. In addition, Syaeful explained, Article 24 paragraph (4) authentically states that the Sharia Banking Committee consists of elements from BI, the Ministry of Religious Affairs, and the community who have expertise in the field of sharia, with a balanced composition and a maximum of 11 people.

“Therefore, the Petitioner’s claim of loss due to Article 1 point 12 and Article 26 paragraph (1), paragraph (2), paragraph (3) of the Sharia Banking Law that grants the MUI, BI, and the OJK delegasi blangko, which leads to disharmony in sharia banking regulations, must be rejected entirely because it does not have any legal merit at all. Thus, Article 1 point 12 and Article 26 paragraph (1), paragraph (2), paragraph (3) of the Sharia Banking Law are constitutional and has nothing that is against the provisions of the 1945 Constitution,” Syaeful stressed.

Also read: Sharia Regulation Based on MUI Edict Guarantees Legal Certainty

The material judicial review case No. 65/PUU-XIX/2021 on Sharia Banking Law was filed by Rega Felix. At the preliminary hearing on Thursday, January 6, the Petitioner asserted his constitutional loss due to the ambiguous sharia banking provision. He claimed that Article 1 point 12 and Article 26 paragraphs (1), (2), and (3) of the Sharia Banking Law allows the Indonesian Ulema Council (MUI) and the Bank of Indonesia (BI) or the OJK (Financial Services Authority) to delegate unspecified authority to a lower-level provision or what is known as delegasi blangko, which has led to disharmony of the regulations on sharia banking as well as legal uncertainty.

He believes that the a quo law in general only regulates sharia banking, but not the principles of transactions in sharia banking (especially ownership right). As such, sharia principles that must be regulated in a law is not regulated in the a quo law. Instead, through Article 26 paragraphs (1), (2), and (3), it delegates the authority to form regulations to the MUI to issue a fatwa (edict), which is then further regulated in a BI or OJK regulation after the enactment of Law No. 21 of 2011 on the OJK.

Also read: BI: DSN MUI’s Fatwas Determine Sharia Banking Products 

Due to the ambiguous interpretation of the regulation, he added, it seems as if the OJK could forsake regulating those principles in a POJK (OJK regulation). This delegasi blangko and dualism of authority have led to public perception of dichotomy between the state and religious law, compelling them to believe “it is better to follow religious law than state law.” On the other hand, he said, the practices of sharia banking constitute undisguised riba (usury) that is common among conventional banks. This, he asserted, is because there are many conflicting notions in the state law.

The Petitioner stressed that this must be addressed, or it would lead to the ruin of sharia banking due to weak foundation. He believes this has harmed his constitutional rights as a sharia banking customer.

He also argued that Article 26 of the a quo law “has forced” MUI, BI, or the OJK to regulate something that is supposed to be regulated in a law.

Therefore, in his petitum, the Petitioner requested that the Court order lawmakers to form a law that regulates material rights in sharia banking transactions or to amend the Sharia Banking Law in relation to that matter.  

Writer        : Sri Pujianti
Editor        : Nur Rosihin Ana
PR            : Tiara Agustina
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 5/12/2022 10:21 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.


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