The ruling comes from the Arabic al-Fatwa , walfutya plural fatawa that have been adopted and grounded in Indonesian society. The Dictionary of Financial Terms and Shariah Banking defines a fatwa as a clarification of Islamic law given by a faqih or fatwa institution to the people, which comes out of the question or not. Simply put, the fatwa according to the Indonesian Dictionary is the answer (Decision, opinion) given by the mufti on a problem (Wangsawidjaja, 2012).
According to Wikipedia, the fatwas فتوي is a term for the opinion or interpretation of a matter relating to Islamic law. Fatwa itself in Arabic means “advice”, “luck”, “answer” or “opinion”. What is meant is an official decision or advice taken by a recognized agency or individual. Presented by a mufti or scholar, in response or answer to a question asked by a fatwa ( mustafti ) beggar with no affiliation . As such, the applicant of the fatwa does not have to follow the content or law of the fatwa given to it. Its use in religious life in Indonesia, the ruling issued by the Indonesian Council of Ulama as a decision on the issue of ijtihadiyah which took place in Indonesia to serve as a catalyst for the worship of Muslims in Indonesia.
The etymology of the word fatwa comes from the Arabic language of al-fatwa. According to Ibn Manzhur the word fatwa is a mashdar form of the word fata , yaftu , fatwan , which means young, new, explanatory, explanatory. This opinion is very similar to Al-fayumi’s opinion, which states that al-fatwa is derived from the word al-fata meaning strong youth. So the person who issued the fatwa is said to be a mufti , because that person is believed to have the power to explain ( al-bayan)) and answers to the problems they face as a youth’s strength (Amin, 2008).
Ma’ruf Amin explains that there are several terms related to the fatwa ( iftaa ) process , namely:
- Al-Iftaor al-futya , meaning the activity of explaining the law of shara ‘(fatwa) in answer to the question asked.
- Mustafti, meaning an individual or group asking questions or asking for a fatwa.
- Mufti, means the person who answers the question or the person who issues the fatwa.
According to M. Yahya Harahap in Wangsawidjaja (2012), a fatwa issued by a well-known cleric can serve as a guide or guide by a specific group or individual who is in agreement with such scholars. Fatwa issued by scholars with no recognized competency or authority is not binding on the public. In contrast to the fatwa provided by a body or agency with competent authority and authority, the fatality is relative and facultative, not absolute.
Indonesia’s highest Shariah authority is on the National Shariah Council – Indonesian Council of Scholars (DSN-MUI), which is an independent authority in issuing fatwa related to Shariah issues of Islam, both religious and religious issues, including economic, financial, and banking issues ( Ascarya, 2012).
The DSN-MUI was formed in order to create the aspirations of Muslims on economic / financial issues implemented in accordance with Islamic law. The formation of the DSN-MUI is a measure of efficiency and coordination of scholars in addressing issues related to economic / financial issues. The various issues / cases that require a fatwa will be addressed and discussed together to gain common ground in its handling by the respective Shariah Board of Supervisors (DPS) in the Shariah financial institution. Subsequently to promote the application of Islamic teachings in economic and financial life, DSN-MUI will continue and proactively respond to the dynamic development of Indonesian society in economics and finance.
DSN-MUI has roles and functions in finance and banking, which is the only authority that provides financial institutions with advice on Shariah banking operations, coordinates Shariah issues on financial and Shariah banking, and analyzes and evaluates aspects of Shariah-compliant of new products submitted by Shariah-compliant financial institutions.
DSN-MUI also has the authority to grant or revoke the recommendation of names that will sit as members of the DPS at a Shariah financial institution. DPS is an independent body established by DSN-MUI in banking and a shariah-compliant financial institution located at a central or regional level with a commissioner who has the responsibility and authority to oversee the bank’s business activities to avoid deviating from the Shariah rules and principles that DSN-MUI has stated.
The role of DPS is very strategic in the application of Shariah principles to Shariah banking institutions. DSN MUI assigns DPS tasks for (Sutedi, 2009):
- conduct periodic oversight of the Shariah financial institution,
- submit proposals for the development of Shariah-compliant financial institutions to the relevant board leaders and to the DSN
- reported on the product and operational development of the Shariah-compliant financial institution that it oversees at least twice a year in a budget,
- formulate issues that require discussion with the DSN.
DSN-MUI has the duties, functions and authority to:
- issued a ruling on the Shariah economy to serve as a guide for practitioners and regulators,
- publish recommendations, certifications, and shariah approval for financial institutions and sharia businesses,
- carry out Shariah-compliant aspects of products / services at a financial institution / Shariah business through the Shariah Supervisory Board,
- issued a fatwa that binds the Shariah Board of Supervisors to each of the Shariah financial institutions and forms the basis of the relevant legal action,
- issue a fatwa which is the basis for the rules / regulations issued by the appropriate agencies, such as the Ministry of Finance and Bank Indonesia,
- recommend and / or revoke the recommendation of names to sit as Shariah Supervisory Board (DPS) of a financial institution and Shariah business,
- inviting experts to explain a problem that is needed in the discussion of the Shariah economy, including monetary authorities / financial institutions both domestically and abroad,
- issued a warning to the Shariah financial institution to stop the deviation from the ruling issued by the National Shariah Council,
- proposes to the appropriate authority to take action if the warning is not taken.
A DSN-MUI ruling was issued through a formal procedure whose mechanism has been regulated as specified in figure V of the National Syariah Council of the Indonesian Ulama Council. 01 The year 2000 on the National Syariah Council’s Basic Shariah Council (PD DSN-MUI) Guidelines as follows:
- The Daily Implementing Agency accepts proposals or legal questions about a shariah-compliant financial institution product. The proposal or inquiry is directed to the Secretariat of the Daily Implementing Agency.
- The Secretariat headed by the Secretary no later than 1 (one) business day after receiving the proposal / inquiry should address the matter to the Chairman.
- The Chairperson of the Daily Office with its members and staff members within 20 business days should prepare a special memorandum containing the text and discussion of any inquiry / proposal.
- The chairman of the Daily Opposition Board brought the result of the discussion to the National Syariah Council Plenary Meeting for approval.
- The Fatwa or Memorandum of the National Shariah Council is signed by the chairman and the Secretary of the National Shariah Council.