CONVENTIONAL BANKING LAW ACCORDING TO

ISLAMIC SHARIA
Submitted to completed the assignment in the fifth semester
in subject Islamic Banking Law

By: Luthfan Abel Alghifary - 20410800

UNIVERSITAS ISLAM INDONESIA

FACULTY OF LAW
INTERNATIONAL PROGRAM 2022/2023
A. INTRODUCTION

In this modern era, many people use conventional banks. What is a conventional
bank? That is, banks that carry out activities by offering certain services to the
community conventionally based on the provisions set by the state. In history, it was
originally agreed to be used only as a Money Exchange Place. Which eventually
developed into a repository of money, and developed again into a money loan. But,
until now a lot of people are arguing that conventional banks are included in usury.
Why say riba? Because there are such bank interest. But in the quran there is no verse
of the quran and sunnah that explains that conventional banks are riba. But what is
forbidden here is the usury, not the bank. In another view, there are also those who
argue that conventional banks are halal halal only, because the interest is the result of
bank profits and also before there has been an agreement from two parties. But now,
because of the fear of Muslims there will be his usury, then developed the Islamic
bank.

Non-Sharia conventional banking law in view of Islamic Sharia. The question that
arises is whether conventional banks contain usury? If so, then the law is illegal. Are
all services in non-Islamic banking haram? What is the legal salary of employees,
staff and managers and directors of banks, is it haram or halal? Here the opinion of
salaf scholars (classical) and contemporary and legal working in and consuming
salaries from banks.

B. DISCUSSION

RIBA
In the field of economic transactions, Islam strictly prohibits the practice of usury. Al-
Dhahabi in the book of Al-Kabair makes riba as one of the major sinful behaviors that
must be avoided. Riba simply means doubling the money lent or owed to someone.
Etymologically (lughawi) riba is isim maqshur, derived from rabaa yarbuu. The
meaning of the word riba is ziyadah which is additional or excess. In terms of
terminology (term) riba is any excess between the value of the goods provided with the
value-match (value of goods received)

Types of riba in islam:

Riba Fadhal

Riba al-Fadhl is also called riba buying and selling is the addition of buying and
selling similar goods. It is obligatory on a child to consider two things in respect of his
parents: first, he should be kind towards them by paying for their needs and necessities
to the extent of their status.

Riba Nasi’ah

Riba an-Nasi'ah also called riba payable receivable is the excess (interest) charged on
the person in debt by the debtor at the beginning of the transaction or due to the delay
in payment of the debt.

There are two types of riba nasi’ah:

1. A lends money or other valuables to B. There are two forms:

(a) a stipulates additional (interest) at the beginning of the transaction.
(b) A does not set interest at the beginning of the transaction, will remain when
B is unable to pay off the debt at the specified time, then A allows the original
deferred payment with interest.

2. A buys gold or silver on B by delaying its receipt/not directly receiving each

other. The distinctive difference, riba nasi'ah is the sale and purchase of goods
of the same type but not in cash. While riba fadhl is the sale and purchase of
goods with excess or debt receivable with interest. The scholars agreed on the
Prohibition of riba nasi'ah. There is a difference of opinion regarding the
Prohibition of Riba fadhl, but the majority forbid it.

THE LAW OF RIBA IN ISLAM

The law of usury is haram and includes a major sin because it will cause the misery of
the poor, tyrannizing the poor, the exploitation of the rich on the poor, closing the door
to charity and Virtue and killing empathy between people of different socio-economic
strata.

Dalil about riba:

Al-Baqarah 2:278
Meaning: “O you who believe, fear Allah and give up what remains of usury, if you are
believers.”

Al-Baqarah 2:279
Meaning: “then if you do not do (leave the rest of usury), then know, that Allah and His
Messenger will fight you. If you repent, you will have your principal, and you will not
be wronged, nor will you be wronged.”

WORKING LAW AND SALARIES OF CONVENTIONAL BANK

EMPLOYEES

According to the fatwa of Sheikh Jad Al-Haq, one of the Muftis of Egypt, obtaining
salaries / honorariums from these banks is justified, even though conventional banks
carry out riba transactions. Working and earning a salary there can still be justified, as
long as the bank has other activities that are halal.

Yusuf Qaradawi was among the scholars who banned banks but in the matter of bank
employee salaries he stated that if the employee works because there is no work
elsewhere then he is in an emergency. In Islam, the state of emergency justifies things
that are originally haram. Life needs including emergencies. In this context, then his job
at the legal bank is allowed. Likewise, you can follow the opinion of trusted scholars
who legalize conventional banks.

OPINION OF CONVENTIONAL BANKS

Some of the reasons the scholars of jurisprudence who allow conventional banks are (a)
interest is not riba prohibited as mentioned in the Quran and Hadith; (b) riba is a double
interest; while interest on bank loans is not so.

REASONS SCHOLARS WHO LEGALIZE CONVENTIONAL BANKS

According to Sayyid Muhammad Thanthawi, conventional banks / deposits are halal in

various forms even with the determination of interest first.
According to him, in addition to the determination prevents disputes or fraud in the
future, also because the determination of interest is done after careful calculation, and
carried out between the customer and the bank on the basis of their willingness.

Dr. Ibrahim Abdullah an-Nasir said “ " it is true that there can be no Islamic power
without being supported by economic power, and there is no economic power without
 being supported by banking, while there is no banking without usury. He also said “ "
this banking economic system has a clear difference with ribawi deeds which are
prohibited by the Noble Qur'an. Because bank interest is a new muamalah, whose law
is not subject to definite nash-nash contained in the Qur'an about the Prohibition of
usury.”

Says A. Hasan Bangil bank interest is halal. because there is no double folding element

C. CONCLUSION

CONCLUSION OF CONVENTIONAL BANKING LAW IN ISLAM

The majority of scholars (jumhur) agree that the practice of interest existing in
conventional banking is the same as riba and therefore haram. Although there are a
number of banking services that do not contain the element of interest and therefore
halal. However, there are a number of scholars who consider that bank interest is not
usury and therefore lawful.

For a devout muslim who is in an ideal condition and is in a position to choose, it

would be better to try to stay away from conventional banking practices that are
forbidden. However, if forced, you can take advantage of all conventional bank
services because there are some scholars who legalize it.

D. REFERENCES

(Dr. Trisadini P. Usanti, 1 Januari, 2017)

(Kalsum, Juli, 2014)
(Umam, 2017)
(L, Januari 2017)
(https://fiqhmenjawab.blogspot.com/2014/03/hukum-bank-konvensional-dalam-islam.html)