History of Islamic Banking

DiscussionI. History of Islamic Bankinga. History of Islamic banking in the WorldThe term Islamic banking or Islamic Banking is a new phenomenon in the modern world economy, its emergence as the intense efforts made by Islamic scholars in Islam who is believed to support the economy will be able to replace and improve the conventional economic system based on interest. That's why Sharia Banking system to implement an interest-free system (interest free) in operation, and therefore the most common formula for defining Shariah Banking is the bank that operates in accordance with the principles of Islamic law, with reference to the Al-Quran and Sunnah as the basis for the legal and operational basis.Theoretical concept of Islamic banking first appeared, according to Remy Sjahadeini Sultan in his thoughts of the writers that are initially floated the idea of ​​Sharia banking is Anwar Iqbal Qureshi, Naiem Siddiqi and Ahmad Mahmmud. Then a more detailed description of this idea was written by Al Maududi (1950). Uzair Maududi was a pioneer of Islamic banking theory in his work entitled A Groundwork for Interest Free Bank.An idea which has emerged in the 50's did not immediately give way to the field of Islamic banking. In the 1960s, banks become Sharia only theoretical discourse. There has been no concrete steps that allow the practical implementation of these ideas. In fact, it has been a realization that the bank's Shariah is the solution of economic problems to produce social welfare in Muslim countries.Until in 1963 from an institutional point of the first Islamic Bank is the MYT-Ghamr Bank. Founded in Egypt, with the help of capital from King Faisal of Saudi Arabia and is the target of Prof. Dr. Abdul Aziz Ahmad El Nagar. MYT-Ghamr Bank management considered to be successfully integrated with the German banking system to translate the principles of Islam muamalah in bank products are suitable for rural areas are largely oriented towards the agricultural industry. However, due to political issues, in 1967 MYT-Ghamr Islamic Bank closed. Then in 1971 the Egyptian Islamic Bank successfully re-established with the name of Nasser Social Bank, the only purpose more social than commercial. Being the first Islamic Bank is the private nature of Dubai Islamic Bank, established in 1975 by a group of Muslim businessmen from various countries. In 1977 established two Islamic banks in the name of Faysal Islamic Bank of Egypt and Sudan. And in that year the government also established the Kuwait Finance House Kuwait.Internationally, the development of Islamic banking was first initiated by Egypt. Because Egypt has inspired the first conference of Islamic economics in Makkah in 1975. As a follow-up to recommendations from the conference, two years later, was born the Islamic Development Bank (IDB) which is then followed by the establishment of Islamic financial institutions in various countries, including countries not members of the OIC, as Filipinos, UK, Australia, United States and Russia.Since then approached the early decades of the 1980s, Islamic banks are popping up in Egypt, Sudan, the Gulf states, Pakistan, Iran, Malaysia, Bangladesh and Turkey. Broadly speaking, the Islamic banking institutions that have sprung up that can be categorized into two types, namely the Muslim Commercial Bank (Islamic Commercial Bank), as Faysal Islamic Bank (Egypt and Sudan), Kuwait Finance House, Dubai Islamic Bank, Jordan Islamic Bank for Finance and Investment, Bahrain Islamic Bank and Islamic International Bank for Finance and Development; or investment institutions in the form of international holding companies, such as Dar Al-Maal Al-Islami (Geneva), Islamic Investment Company of the Gulf, Islamic Investment Company (Bahamas ), Islamic Investment Company (Sudan) Islamic Investment Bank of Bahrain (Manama) and the Islamic Investment House (Amman).On his journey Shariah-based banking system, is increasingly popular not only in Islamic countries but also western countries, characterized by increasingly fertile banks that implement this concept. The development of Islamic banking, or banking with the concept for signifying the Islamic concept in the management of wealth / money received universal habit of mankind, because obviously the concept of usury or interest in Islam is forbidden and contrary to the concept of humanity.
b. History of Islamic Banking in IndonesiaAs the development of Islamic banking in the world of thought, especially Islamic countries, Indonesia participated got swept up in the demands of talented thought-Indonesia Muslim scholars.Indonesia as a Muslim-majority country in the world's largest emerging thinking about the need to implement sharia-based banking system that emerged in 1974. the emergence of Shariah-based banking insights in a seminar-Indonesia Relations Middle East organized by the Institute of Social Sciences Studies (LSIK). Development of thinking about the need for Muslims in Indonesia have their own Islamic banks begin to blow from it, as the emergence of a new awareness of Muslim intellectuals and scholars in the economic empowerment of the community. At first there had been an exhaustive debate on the law and the law of zakat Bank interest vs tax among the clergy, scholars and Muslim intellectuals.Differences and debate among scholars or ulama 'remarkable, differences of opinion among scholars regarding Indonesia flower broadly divided in three groups: the group that justifies, say groups and groups that forbid doubtful. This will determine public response to the Islamic bank. Umar Shihab, one of the scholars NU (NU) as a representation of scholars have argued that bank interest is permissible, based his opinion on a number of reasons. First, the amount of money collected and interest provided by banks to customers is much smaller than usury imposed at the time of ignorance. Second, the tax rate that banks do not make the bank itself and its customers gain a large or otherwise not going to feel aggrieved with interest. Third, the purpose of credit of the debtor at the time of ignorance is for consumption, while at the productive aims. Fourth, the willingness of both parties as well as the ability to transact the sale of the voluntary principle.The opinion Majelas Legal Affairs Committee as the organization Muhammadiyah in Indonesia's second largest bank decided that the interest rate provided by state-owned bank to its customers, or vice versa during the applicable included in doubtful cases. However, of these factors, only the offending bank interest granted by the state bank, stating that the interest granted by the state is allowed, for a given interest rate is still low, when compared with rates at private banks.NU organization as the largest Islamic organization in Indonesia, in addition to the Muhammadiyah, to decide the issue of bank interest by several times a session, with the polarization of opinion in the three groups, namely, haram, halal, and doubtful. However, although there are differences of views, Bahsul Masa'il Standing Committee decided that a more cautious is the first opinion, that is unlawful bank interest.The differences among the Muslims did not discourage the emergence of Islamic banking in Indonesia, pioneering the practice of Islamic banking in Indonesia began in the early period of the 1980s, through themed discussions of Islamic banks as the economic pillar of Islam. The characters involved in the assessment, to name a few, among which are Karnaen A Perwataatmadja, M Dawam Rahardjo, AM Saefuddin, and M Amien Azis. As a test, the idea of ​​Islamic banking is practiced in a relatively limited scale of which in London (Temple At-Tamwil Salman ITB) and in Jakarta (Cooperative Ridho Gusti). As an illustration, M Dawam Rahardjo never filed a recommendation in writing of Sharia Banks as an alternative concept to avoid the prohibition of usury, as well as trying to answer the challenge to the financing needs for business and community economic development. Way out in passing mentioned the financing transaction is based on three modes, namely mudlarabah, musharaka and murabaha. More specific initiative on the establishment of a new Islamic bank in Indonesia carried out in 1990. On August 18 to 20 years, the Indonesian Ulema Council (MUI) hosted a workshop in the interest of banks and banking Cisarua, Bogor, West Java. The results of the workshop are then discussed in more depth at the IV National Congress of the MUI in Jakarta August 22 to 25, 1990, resulting in the formation of a working group mandated the establishment of Islamic banks in Indonesia. The working group is called the MUI by banking team was given the task to approach and consult with all interested parties. As a result of team work is the establishment of MUI Bank PT Bank Muamalat Indonesia (BMI), the corresponding deed of establishment, was established on November 1, 1991. Since the date of May 1, 1992, BMI is operating with an initial capital of Rp 106.126.382.000, -. As of September 1999, BMI has more than 45 outlets throughout Indonesia.After the establishment of Bank Muamalat Indonesia (BMI), followed by the establishment-SRB SRB and other evidence of Islamic banking is not affected by the monetary crisis in 1998 then finally followed by the establishment of banking, commercial banking establish sharia-based banking.