The definition of an Sharia Bank is a bank that conducts business based on sharia principles. What is meant by sharia principles are principles taken or interpreted from the Qur’an and Hadith as sources of Islamic law itself.According to Antonio et al (2006: 17) Islamic banks have a minimum of 5 principles in conducting their business activities, including:
1. Principle of Deposit (Deposit)
The principle of savings adopted by Islamic banks is often known as al-wadiah (for safekeeping). Al-wadiah terminologically (Al-Bahuti in Abdullah, 2009: 389) is the granting of power by the requester to the person who maintains his property without compensation (change), in his application al-wadiah is usually in the form of demand deposits, namely deposits which can be withdrawn at any time by using a check or other payment warrant.
2. Revenue Sharing System
Profit sharing system or Syirkah (Antonio et al, 2006: 18) is a system that includes procedures for the distribution of business results between capital providers and capital managers. Broadly speaking, the profit-sharing system in Islamic banking can be divided into two types, mudaraba and musharaka.
Mudharabah is a profit sharing agreement between the capital owner (shahibul mall) and the manager / entrepreneur (mudharib). In the mudharabah concept, the capital owner will fully finance a project or business, and the entrepreneur agrees to manage the project or business by sharing the results in accordance with the agreement, and the loss will be fully borne by the capital owner unless the loss is caused by the negligence
of the capital manager (Muhammad, 2004 : 9). The application in the practice of sharia banking mudharabah concept can be found in
productive financing products (non-consumption) whereas in mudharabah savings products are usually applied in deposits and time deposits (deposits).
Musyarakah is a cooperation agreement between two or more owners of capital to finance a project or business. The benefits of the project or business are divided according to agreed agreements, the amount of which does not have to be in accordance with the share of their respective capital, while losses are borne in accordance with their respective share of capital (Muhammad, 2004: 9). In syriah banking practice, the concept of musharaka can be found in productive (non-consumption) financing products.
3. The principle of buying and selling and profit margins
Buying and selling (al-Ba’i) is the process of transferring ownership of an item or asset using money as a medium (Muhammad, 2004: 9).
The syar’i argument underlying the sale and purchase is the verse Al-Qur’an surah Al-Baqarah verse 275:
Meaning: people who eat (take) usury cannot stand but rather as the founding of a person who is possessed by devil because of (pressure) insanity. Their situation is like that, because they say (opinion), Surely the sale and purchase is the same as usury, even though Allah has justified the sale and prohibiting usury. those who have come to him forbid from his Lord, then continue to stop (from taking usury), Then for him what he has taken first (before the prohibition comes); and his affairs (it’s up to) Allah. the person who returns (takes usury), then that person is the inhabitants of hell; they are eternal in it (Al-Baqarah: 275).
In practice, the principle of buying and selling and profit margins is done in several ways including:
Murabaha is the sale of goods transaction by stating the acquisition price and profit (margin) agreed by the seller and buyer (Indonesian Bankers Institute Islamic Banking Development Team [pert.], 2003: 66). In practice, the bank will first buy the goods needed or appoint a customer to represent it in the purchase, then the bank will sell them back to the customer at
the purchase price plus profit (margin).
Salam is a sale and purchase where buyers order goods of the type, quality and quantity determined and paid for by the buyer in cash or in installments before the goods are available (Sharia Banking Development Team of the Indonesian Bankers Institute [Perh.], 2003: 67). In the ordering process, the buyer will order goods with certain specifications, in which the quality and delivery time of the ordered goods are ordered and the payment is promised either in cash at the time of the order transaction or in installments until the time the ordered goods are available or received by the customer.
Istisna is a contract between the customer and the maker for a particular job in dependents (Indonesian Bankers Institute Islamic Banking Development Team [Perh.], 2003: 67). In istisna sharia banking practice is usually applied in construction projects, where customers require funds to carry out a construction.
4. Rental Principle
The principle of leasing is broadly divided into 2 types:
Ijarah is the initial form of rent or can also be called pure rent. Ijarah terminologically (Fauzan in Abdullah, 2009: 311) is a transaction for a benefit that is changed in the form of a certain item or as described in a certain time period, or for a transaction or for a work that is known for a known wage.
Al-Qur’an verses that indicate ijarah are in the Ath-Tahalaaq verse 6:
Meaning: Place them (the wives) where you live according to your ability and do not trouble them to narrow (their hearts). and if they (wives who have been neglected) are pregnant, then give them their living until they give birth, then if they suckle (your children) for you then give them their wages, and deliberate among you (all things) well; and if you encounter difficulties then another woman may breastfeed (the child) for her (Ath-Thalaaq: 6).
b) Ijarah Muntahiya Biltamlik
Ijarah Muntahiya Biltamlik (Muhammad, 2003: 24) is a lease agreement for an item that ends with a transfer of ownership of the goods from the party providing the lease to the lessee (financial lease).
5. Principle of Fee
The fee principle in practice covers all non-financing services performed by banks. The forms of fee collection practices in Islamic banking are as follows (Muhammad, 2003: 10):
a) Kafalah (Warranty)
Kafalah is a guarantee given by the guarantor (kafil) to third parties to fulfill the obligations of the second party they bear. In practice in Islamic banking, by way of a bank guarantee to another party for all the obligations of its customers to that party, then the bank will take a wage (fee) to the customer for the guarantee (bank guarantee).
Wakalah is an agreement granting power of attorney to other parties appointed to represent it in carrying out a task on behalf of the grantor. Wakalah in practice in Islamic banking contained in money transfer services, payment services in international trade or letters of credit (L / C) and billing services for an obligation to the collectible based on the script for the benefit of customers / collectors (collections).
Hiwalah is the transfer of obligations from a party that has obligations to other parties. Hiwalah in practice in Islamic banking is done by the way the bank will fulfill the customer’s obligations to other parties (gutters), and then the customer will pay a fee for the services of the gutters performed by the bank.