ENTREPRENEURSHIP AND MANAGEMENT IN AN ISLAMIC CONTEXT:

Ethics and Social Responsibility in Islamic Finance

Supporting Lecturer: Mr. Suhendra, M. Si

Arrange by Group 8:
Yasir Aulia Rahman 11220530000045
Naila Khansa Azzahra 11220530000058
Rifki Maulana 11220530000069

MAJORING IN MANAJEMEN DAKWAH

FACULTY OF DA’WA AND COMMUNICATIONS
SYARIF HIDAYATULLAH STATE ISLAMIC UNIVERSITY
 2023
DISCUSSION

Ethics and Social Responsibility in Islamic Finance

Gadaf Rexhepi and Nadire Ramadani

1. Introduction
As ethics and social responsibility are becoming more and more important for the successful
operation of companies and financial institutions. According to the concept of ethics and
social responsibility managers are obliged to provide the social environment changes, to
adjust them with the organization overall goals and objectives and the goals/objectives of the
groups concerned; and to take concrete steps to promote the general interest of the society.
This is achieved through transparent and ethical behavior of the organizations in its
sustainable development and takes into account the expectations of stakeholders, in
accordance with international standards of ethics integrated in the enterprise. Ethic and social
responsibility are based mainly on voluntary strategic decisions of the organization and its
means more than compliance and fulfilling the law. There is no doubt that providing ethic,
social responsibility and social services to the local community increases the bond between
the financial institution and its local environment. Islamic finance is based on the ethic and
social responsibility they emphasize the ethical and social responsibility elements which helps
institution to increase the number of their clients. Ethics and social responsibility can be
learned also by the life and the work of the Prophet (SAW) who use do enjoy a very high
respect of sincerity, honesty and truthfulness. He was a business man also and during his work
he emphasized the importance of fair dealing and being honest to the costumers as he claims
“Islam encourages an honest trader greatly and offers a high rank on the Day of Judgment. A
businessman will be honored along with the martyrs but the conditions are sincerity,
truthfulness, honesty etc. in dealings” (Al-Bukhari).

Translate

Karena etika dan tanggung jawab sosial menjadi semakin penting untuk keberhasilan operasi
perusahaan dan lembaga keuangan. Menurut konsep etika dan tanggung jawab sosial,
manajer berkewajiban untuk memberikan perubahan lingkungan sosial, menyesuaikannya
dengan tujuan dan sasaran organisasi secara keseluruhan dan sasaran/sasaran kelompok yang
bersangkutan; dan mengambil langkah-langkah konkrit untuk memajukan kepentingan umum
masyarakat. Hal ini dicapai melalui perilaku organisasi yang transparan dan beretika dalam
pengembangannya yang berkelanjutan dan memperhatikan harapan para pemangku
kepentingan, sesuai dengan standar etika internasional yang terintegrasi dalam perusahaan.
Etika dan tanggung jawab sosial didasarkan terutama pada keputusan strategis sukarela
organisasi dan artinya lebih dari kepatuhan dan pemenuhan hukum. Tidak diragukan lagi
bahwa memberikan etika, tanggung jawab sosial dan pelayanan sosial kepada masyarakat
setempat meningkatkan ikatan antara lembaga keuangan dan lingkungan setempat.
Keuangan Islam didasarkan pada etika dan tanggung jawab sosial, mereka menekankan
elemen tanggung jawab etis dan sosial yang membantu institusi untuk meningkatkan jumlah
klien mereka. Etika dan tanggung jawab sosial dapat dipelajari juga dari kehidupan dan karya
Nabi (SAW) yang sangat menjunjung tinggi ketulusan, kejujuran dan kejujuran. Dia adalah
seorang pebisnis juga dan selama pekerjaannya dia menekankan pentingnya transaksi yang
adil dan jujur kepada pelanggan karena dia mengklaim “Islam sangat mendorong pedagang
yang jujur dan menawarkan peringkat tinggi pada Hari Penghakiman. Seorang pengusaha akan
dihormati bersama dengan para syuhada tetapi syaratnya adalah ketulusan, kebenaran,
kejujuran dll dalam bertransaksi” (Al-Bukhari).

Explanation

The passage highlights the growing importance of ethics and social responsibility in the
successful operation of companies and financial institutions. It emphasizes that managers
have a responsibility to bring about social changes that align with the overall goals of the
organization and the interests of relevant groups. This is achieved through transparent and
ethical behavior, considering the expectations of stakeholders and following international
standards of ethics.

Main idea

As ethics and social responsibility are becoming more and more important for the successful
operation of companies and financial institutions. According to the concept of ethics and
social responsibility managers are obliged to provide the social environment changes, to
adjust them with the organization overall goals and objectives and the goals/objectives of the
groups concerned; and to take concrete steps to promote the general interest of the society.

Supporting Details
This is achieved through transparent and ethical behavior of the organizations in its
sustainable development and takes into account the expectations of stakeholders, in
accordance with international standards of ethics integrated in the enterprise. Ethic and social
responsibility are based mainly on voluntary strategic decisions of the organization and its
means more than compliance and fulfilling the law.

Keyword

Ethics: Etika

Indonesia Context

Because ethics and social responsibility are becoming increasingly important to the successful
operation of companies and financial institutions. like things that have happened around us,
the ethics of being polite to our elders and being responsible in dealing with all forms of
behavior that we have done

Important Word

An important sentence in the provided text is: "Ethic and social responsibility are based mainly
on voluntary strategic decisions of the organization and its means more than compliance and
fulfilling the law."

Meaning of word

Fulfilling: making someone satisfied or happy because of fully developing their character or
abilities.

Emphasize: give special importance or prominence to (something) in speaking or writing."he

jabbed a finger into the tabletop to emphasize his point"

Truthfulness: the fact of being true; truth. "we have had to judge the truthfulness of the
evidence

Conclusion

Ethics and social responsibility play a crucial role in the successful operation of
companies and financial institutions. This requires transparent and ethical behavior,
adhering to international standards, and going beyond mere legal compliance. By
 embracing ethics and social responsibility, organizations can strengthen their
relationship with the local community and attract more clients. Islamic finance, with
its emphasis on ethical and social responsibility, provides an example of how these
principles can be integrated into financial institutions. Additionally, the teachings of
the Prophet Muhammad serve as a guide, emphasizing sincerity, honesty, and fair
dealings. Islamic banks are expected to participate in charitable activities as part of
their commitment to social and humanitarian work. While Zakah is a religious
obligation, Islamic banks should also engage in other acts of goodness and
benevolence. The growth of the Islamic finance industry highlights the importance of
incorporating ethical and social responsibility characteristics into organizations.

2. Islamic Ethics and Social Responsibility in Finance

Social responsibility has emerged slowly over the past decade. Social responsibility to
a great extent is becoming a part of organizations’ discussions globally in the search
for greater value and competitiveness Islamic banking has similar purpose as
conventional banking except that it operates in accordance with the rules of Shari’ah,
known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of
Islamic banking is the sharing of profit and loss (PLS) and the prohibition of Riba
(usury). Indeed, all commercial transactions and contracts must be free from elements
of Riba (interest), Gharar (uncertainty), Maisir (gambling) and non-Halal (prohibited
activities). From our point of view Islamic finance has fulfill the ethical and the social
dimensions and goals of Shari’ah. Ethics is defined as: “the agreed on standards of
what is desirable and undesirable; of right and wrong conduct; of what is considered
by that group as good and bad behavior of a person, sub-group, or entity that is a
member of the group, and may include defined bases for discipline, including
exclusion”. Ethics is considered as an aggregate concept whose components are
morality (Habib 2012). But the specific of ethics and morals is that they cannot be
adjudicated or enforced by an authority. The main philosophy of Islamic Finance which
are related with ethical and social responsibility working is based on three aspects.
First, it is the Profit and Loss Sharing Mode of Financing (PLS); second, it is the risk-
sharing framework and third it is the promotion of economic development and social
justice through specific business practices and through Zakat-Almsgiving The
economic system of Islam is presented through it goals and values. They determine
the nature of the system and present a proper and essential understanding of the
economic system of Islam. These goals are based purely on ethics and social
responsibility

Translate

Tanggung jawab sosial telah muncul perlahan selama dekade terakhir. Tanggung jawab sosial
sebagian besar menjadi bagian dari diskusi organisasi secara global dalam mencari nilai dan
daya saing yang lebih besar Perbankan Islam memiliki tujuan yang sama dengan perbankan
konvensional kecuali beroperasi sesuai dengan aturan Syariah, yang dikenal sebagai Fiqh al-
Muamalat (aturan Islam tentang transaksi). Prinsip dasar perbankan syariah adalah bagi hasil
dan kerugian (PLS) dan larangan Riba (riba). Memang, semua transaksi dan kontrak komersial
harus bebas dari unsur Riba (bunga), Gharar (ketidakpastian), Maisir (perjudian) dan non-Halal
(kegiatan yang dilarang). Dari sudut pandang kami keuangan Islam telah memenuhi etika dan
dimensi sosial dan tujuan syariah. Etika didefinisikan sebagai: “standar yang disepakati
tentang apa yang diinginkan dan tidak diinginkan; perilaku benar dan salah; tentang apa yang
dianggap oleh kelompok itu sebagai perilaku baik dan buruk seseorang, subkelompok, atau
entitas yang merupakan anggota kelompok, dan dapat mencakup dasar disiplin yang
ditentukan, termasuk pengucilan” Etika dianggap sebagai konsep agregat yang komponennya
adalah moralitas Tetapi kekhasan etika dan moral adalah bahwa mereka tidak dapat diadili
atau dipaksakan oleh otoritas. Filosofi utama Keuangan Islam yang terkait dengan kerja etika
dan tanggung jawab sosial didasarkan pada tiga aspek. Pertama, Profit and Loss Sharing Mode
of Financing (PLS); kedua, itu adalah kerangka pembagian risiko dan ketiga itu adalah promosi
pembangunan ekonomi dan keadilan sosial melalui praktik bisnis tertentu dan melalui zakat-
sedekah Sistem ekonomi Islam disajikan melalui tujuan dan nilai-nilainya. Mereka
menentukan sifat sistem dan menyajikan pemahaman yang tepat dan esensial dari sistem
ekonomi Islam. Tujuan-tujuan ini murni didasarkan pada etika dan tanggung jawab sosial

Explanation

Social responsibility has gained prominence in recent years, with organizations

worldwide recognizing its importance in creating value and enhancing
competitiveness. Islamic banking shares a similar purpose to conventional banking but
operates according to the principles of Shari'ah, known as Fiqh al-Muamalat. The
fundamental principle of Islamic banking is the sharing of profit and loss (PLS) while
prohibiting Riba (usury). All transactions and contracts in Islamic banking must be free
from Riba, Gharar (uncertainty), Maisir (gambling), and non-Halal (prohibited
activities). From an Islamic perspective, it can be argued that Islamic finance fulfills the
ethical and social dimensions and goals of Shari'ah.

Main idea

Social responsibility has emerged slowly over the past decade. Social responsibility to
a great extent is becoming a part of organizations’ discussions globally in the search
for greater value and competitiveness Islamic banking has similar purpose as
conventional banking except that it operates in accordance with the rules of Shari’ah,
known as Fiqh al-Muamalat (Islamic rules on transactions).

Supporting details

Islamic Finance refers to all financial, banking, investment transactions, and services that
comply with Islamic rules, principles, and practices, according to Shari’ah Law, known as Fiqh
Muamalat, which means: The Islamic rules on transactions.

Islamic Banking rules are fundamental principles of Islamic Law-Shari’ah where faith, worship,
moral, ethics, justice, equitability, and fairness govern.

Keyword

Islamic banking: Bank Syariah

Zakat: Zakat

Ethics: Etika

Indonesia Context
In Indonesia itself has a bank that does not contain elements of riba, namely the
Indonesian Islamic bank, in which the bank does not add interest for borrowing money
Important word

"Social responsibility to a great extent is becoming a part of organizations' discussions

globally in the search for greater value and competitiveness.""Islamic finance has
fulfilled the ethical and social dimensions and goals of Shari'ah.""Ethics is considered
as an aggregate concept whose components are morality.""Ethical norms for financial
institutions include conducting operations with integrity and due skill, care and
diligence, organizing affairs responsibly and effectively, observing proper standards of
market conduct, avoiding conflicts of interest, and treating customers fairly.""The
basic elements of ethics in Islamic finance include the prohibition of interest, the
requirement for financial transactions to be based on real economic activity, and the
prohibition of trading with alcohol, pork, and gambling.”

Meaning of word

Competitiveness: possession of a strong desire to be more successful than others.

"a lot of people get wrapped up in competitiveness and jealousy"
Accordance: conformity or agreement. "there is good accordance between the values"

Framework: an essential supporting structure of a building, vehicle, or object.

"a conservatory in a delicate framework of iron"
Conclution
Social responsibility is increasingly becoming a significant topic in global discussions as
organizations seek greater value and competitiveness. Islamic banking operates
according to the principles of Shari'ah, including the sharing of profit and loss and the
prohibition of usury. Islamic finance aligns with the ethical and social dimensions and
goals of Shari'ah. Ethics, defined as agreed-upon standards of conduct, play a crucial
role in financial institutions, emphasizing integrity, diligence, fair treatment of
 customers, and responsible management. Islamic finance adheres to Islamic rules and
principles, governed by Shari'ah Law, which promotes faith, worship, morality, ethics,
justice, equitability, and fairness. It prohibits interest, encourages real economic
activity, and prohibits involvement in prohibited activities. The main philosophy of
Islamic finance revolves around profit and loss sharing, risk-sharing, economic
development, social justice, and the practice of Zakat-Almsgiving. These principles are
rooted in ethics and social responsibility, shaping the economic system of Islam.

3. Economic Well-Being Within the Framework of the Moral-Norms of Islam

In continuance we can see some facts stated in Qur’an related with ethical and moral norms
in Islam, they are: “Eat and drink of that which God has provided and act not corruptly, making
mischief in the world” (Qur’an, Surah 2.Al-Baqarah, Verse 60). “O mankind! Eat of what is
lawful and good on earth and follow not the footsteps of the devil” (Qur’an, Surah 2.Al-
Baqarah, Verse 168). “O you who believe! Forbid not the good things which God has made
lawful for you and exceed not the limits. Surely, God loves not those who exceed the limits”
(Qur’an, Surah 5.Al-Maidah, Verse 87). “And eat of the lawful and good that God has given
you, and keep your duty to God in whom you believe” (Qur’an, Surah 5.Al-Maidah, Verse 88).
Ethics and Social Responsibility in Islamic Finance 135 Through these verses is presented the
keynote of the Qur’an message in the economic field. Islam urges Muslims to enjoy the
bounties provided by God and sets no quantitative limits to the extent of material growth of
Muslim society. Islam urges Muslims to earn their livelihood (Chapra 1979). According to
Chapra: “One of the economic goals of a Muslim society should be to create such an economic
environment that those who are willing to and looking for work are able to find gainful
employment in accordance with their abilities”. This statement corresponds with the
following revelations of Qur’an: “God desires ease for you and desires not hardship for you”
(Qur’an, Surah 2. Al-Baqarah, Verse 185). In addition, Islam is designed to serve as a blessing
for humankind and alms at making life richer and worthier for living and not poorer, full of
hardships. Based on these verses of the Qur’an, Muslim Jurists have unanimously agreed that
catering for the interests of the people and relieving them of hardships is the basic objective
of the Sharia’h
Translate
Selanjutnya kita dapat melihat beberapa fakta yang tercantum dalam Al-Qur'an terkait
dengan norma-norma etika dan moral dalam Islam, yaitu: “Makan dan minumlah dari rizki
Allah dan janganlah berbuat kerusakan, membuat kerusakan di dunia” (Al-Qur'an , Surah 2.Al-
Baqarah, Ayat 60). “Hai manusia! Makanlah yang halal dan baik di bumi dan jangan ikuti jejak
setan” (Qur’an, Surah 2.Al-Baqarah, Ayat 168). “Wahai orang-orang yang beriman! Janganlah
kamu mengharamkan kebaikan-kebaikan yang telah dihalalkan Allah untukmu dan janganlah
melampaui batas. Sesungguhnya Allah tidak menyukai orang-orang yang melampaui batas”
(Qur’an, Surah 5.Al-Maidah, Ayat 87). “Dan makanlah yang halal dan baik yang diberikan Allah
kepadamu, dan bertakwalah kepada Allah yang kamu percayai” (Qur’an, Surah 5.Al-Maidah,
Ayat 88). Etika dan Tanggung Jawab Sosial dalam Keuangan Islam 135 Melalui ayat-ayat
tersebut disajikan keynote pesan Al-Qur’an di bidang ekonomi. Islam mendesak umat Islam
untuk menikmati karunia yang disediakan oleh Tuhan dan tidak menetapkan batasan
kuantitatif sejauh pertumbuhan material masyarakat Muslim. Islam mendesak umat Islam
untuk mencari nafkah (Chapra 1979). Menurut Chapra: “Salah satu tujuan ekonomi
masyarakat Muslim adalah menciptakan lingkungan ekonomi sedemikian rupa sehingga
mereka yang mau dan mencari pekerjaan dapat menemukan pekerjaan yang menguntungkan
sesuai dengan kemampuan mereka”. Pernyataan ini sesuai dengan wahyu Al-Qur’an berikut
ini: “Allah menghendaki kemudahan bagimu dan tidak menghendaki kesulitan bagimu”
(Qur’an, Surah 2. Al-Baqarah, Ayat 185). Selain itu, Islam dirancang untuk menjadi berkah bagi
umat manusia dan sedekah untuk menjadikan hidup lebih kaya dan layak untuk dijalani dan
bukan lebih miskin, penuh kesulitan. Berdasarkan ayat-ayat Al-Qur’an ini, para ahli hukum
Muslim telah sepakat bahwa melayani kepentingan masyarakat dan membebaskan mereka
dari kesulitan adalah tujuan dasar dari Syariah.

Explanation

These verses from the Qur'an highlight the ethical and moral norms in Islam regarding
economic behavior. The first verse emphasizes the importance of not engaging in corrupt or
mischief-making activities. The second verse encourages people to consume what is lawful
and good on Earth and to avoid following the footsteps of the devil. The third verse advises
believers not to forbid what God has made lawful and to avoid exceeding limits. The fourth
verse reinforces the idea of consuming what is lawful and good and emphasizes the duty to
God.

Main idea

Many of the facts listed in the Qur'an are related to ethical and moral norms in Islam
Supporting details

Based on these verses of the Qur’an, Muslim Jurists have unanimously agreed that
catering for the interests of the people and relieving them of hardships is the basic
objective of the Sharia’h

Keyword

Qur’an: Quran

Muslims: Musllim

Indonesia Context
“And eat of the lawful and good that God has given you, and keep your duty to God in whom
you believe” (Qur’an, Surah 5.Al-Maidah, Verse 88). Eating hoofed and fanged animals is a ban
in Indonesia, especially in Islamic society.
Important word

"Based on these verses of the Qur’an, Muslim Jurists have unanimously agreed that
catering for the interests of the people and relieving them of hardships is the basic
objective of the Sharia’h."

Meaning of word

Environment: the surroundings or conditions in which a person, animal, or plant lives or

operates."survival in an often hostile environment"
Bounty: a sum paid for killing or capturing a person or animal.
"there was an increased bounty on his head"
Hardships: severe suffering or privation."intolerable levels of hardship"

Realiving: to make an unpleasant feeling, such as pain or worry, less strong: She was given a
shot of morphine to relieve the pain.

Conclution

The verses from the Qur'an highlight the ethical and moral norms in Islam, emphasizing the
importance of enjoying lawful provisions, avoiding corruption, and not exceeding limits. Islam
encourages Muslims to pursue their livelihood and aims to create an economic environment
where individuals can find gainful employment. The Qur'an emphasizes ease and the
avoidance of hardship, presenting Islam as a blessing that enriches and improves lives. Muslim
 Jurists unanimously agree that catering to people's interests and alleviating their hardships is
the fundamental objective of Sharia'h.

4. Universal Brotherhood and Social Justice

Islam aims at establishing a social order where all individuals are united by bonds of
unity and affection like members of one single family created by One God. This can be
seen from the verse: “O mankind! Surely, I am a messenger of God to you all” (Qur’an,
Surah 7. Al-A’raf, Verse 158). This unity is universal and not parochial. It is not bound
by any geographical boundaries and encompasses the whole of humankind and not
anyone familiar group or tribe or race (Chapra 1979). This is proved by the following
revelations of Qur’an:
● “God orders justice and conduct and giving to relatives and forbids immorality
and bad conduct and oppression. He admonishes you that perhaps you will be
reminded.” (Qur’an, Surah 16. An-Nahl, Verse 90).
● “God commands you to render trusts to whom they are due and when you
judge between people to judge with justice” (Qur’an, Surah 4.An-Nisa, Verse
58).
● “O you, who have believed, be persistently standing firm in justice, witnesses
for Allah, even if it be against yourselves or parents and relatives. Whether
one is rich or poor, Allah is more worthy of both. So follow not [personal]
inclination, lest you not be just. And if you distort [your testimony] or refuse
[to give it], then indeed Allah is ever, with what you do, Acquainted” (Qur’an,
Surah 4. An-Nisa, Verse 135).

Translate:

Islam bertujuan untuk membangun tatanan sosial di mana semua individu disatukan
oleh ikatan persatuan dan kasih sayang seperti anggota satu keluarga tunggal yang
diciptakan oleh Satu Tuhan. Hal ini terlihat dari ayat: “Hai manusia! Sesungguhnya aku
adalah utusan Allah kepada kamu sekalian” (Qur’an, Surah 7. Al-A’raf, Ayat 158).
Kesatuan ini bersifat universal dan tidak parokial. Itu tidak terikat oleh batas geografis
apa pun dan mencakup seluruh umat manusia dan bukan kelompok atau suku atau
ras yang dikenal siapa pun (Chapra 1979). Hal ini dibuktikan dengan wahyu Al-Qur’an
berikut ini:

● “Tuhan memerintahkan keadilan dan perilaku dan memberi kepada kerabat

dan melarang perbuatan asusila dan perilaku buruk dan penindasan. Dia
memperingatkan Anda bahwa mungkin Anda akan diingatkan. (Qur’an, Surah
16. An-Nahl, Ayat 90).
● “Tuhan memerintahkanmu untuk memberikan amanah kepada siapa mereka
berhak dan ketika kamu memutuskan di antara manusia untuk menilai dengan
adil” (Qur'an, Surah 4.An-Nisa, Ayat 58).
● “Wahai orang-orang yang beriman, berdirilah teguh dalam keadilan, menjadi
saksi karena Allah, meskipun itu terhadap dirimu sendiri atau orang tua dan
kerabat. Apakah seseorang kaya atau miskin, Allah lebih layak atas keduanya.
Maka janganlah mengikuti kecenderungan [pribadi], agar kamu tidak berlaku
adil. Dan jika kamu memutarbalikkan [kesaksianmu] atau menolak [untuk
memberikannya], maka sesungguhnya Allah Maha Mengetahui dengan apa
yang kamu lakukan” (Qur’an, Surah 4. An-Nisa, Ayat 135).

Explanation:

Islam promotes the establishment of a social order characterized by unity and

affection among individuals, resembling a single family created by One God. The
Qur'an emphasizes the importance of justice, righteous conduct, and the prohibition
of immorality and oppression.

Main idea:

Islam aims at establishing a social order where all individuals are united by bonds of
unity and affection like members of one single family created by One God.

Supporting details:

It is not bound by any geographical boundaries and encompasses the whole of

humankind and not anyone familiar group or tribe or race (Chapra 1979).

Keyword:
 ● Unity: persatuan
● Justice: keadilan

Indonesian context:

Islam in Indonesia, where there are various tribes, nations, religions and races, must
be able to unite properly as contained in Pancasila, especially as the religion of the
majority, Muslims must be able to provide a safe and conducive space for other
religions and tolerate each other.

Important word:

"God orders justice and conduct and giving to relatives and forbids immorality and bad
conduct and oppression. He admonishes you that perhaps you will be reminded."
(Qur’an, Surah 16. An-Nahl, Verse 90). (“Tuhan memerintahkan keadilan dan perilaku
dan memberi kepada kerabat dan melarang perbuatan asusila dan perilaku buruk dan
penindasan. Dia memperingatkan Anda bahwa mungkin Anda akan diingatkan.
(Qur’an, Surah 16. An-Nahl, Ayat 90).

Meaning of word:

● Establishing, verb gerund: set up (an organization, system, or set of rules) on a

firm or permanent basis. (mendirikan; menetapkan; membentuk; membuat).
● Encompasses, verb 3rd person present: surround and have or hold within.
(meliputi).
● Inclination, noun: a person's natural tendency or urge to act or feel in a
particular way; a disposition or propensity. (kecenderungan).

Conclusion:

Islam promotes the establishment of a universal social order where all individuals are
united like members of one family. This unity transcends geographical boundaries and
encompasses all of humanity. The Qur'an emphasizes the importance of justice, good
conduct, and treating others with fairness, regardless of their social status or familial
ties. Muslims are encouraged to uphold justice even if it goes against their own
interests, and to fulfill their responsibilities and trusts. The goal is to create a just and
harmonious society based on the principles of Islam.
 (Islam mempromosikan pembentukan tatanan sosial universal di mana semua
individu bersatu seperti anggota satu keluarga. Kesatuan ini melampaui batas-batas
geografis dan meliputi seluruh umat manusia. Al-Qur'an menekankan pentingnya
keadilan, perilaku yang baik, dan memperlakukan orang lain dengan adil, tanpa
memandang status sosial atau ikatan keluarga. Muslim didorong untuk menegakkan
keadilan bahkan jika itu bertentangan dengan kepentingan mereka sendiri, dan untuk
memenuhi tanggung jawab dan amanah mereka. Tujuannya adalah untuk
mewujudkan masyarakat yang adil dan harmonis berdasarkan prinsip-prinsip Islam.)

5. Equitable Distribution of Income

Islam emphasizes distributive social justice and incorporates in its system a program
for redistribution of income and wealth so that every individual is guaranteed a
standard of living that is humane and respectable in harmony with the regard for the
dignity of man inherent in the teachings of Islam (Chapra 1979, p. 18). The Islamic
program for redistribution consists of three parts. Firstly, it implies assistance in
finding gainful employment to those unemployed and those looking for work and a
just payment for that work. Secondly, it emphasizes the payment of Zakat for
redistributing income from the rich to the poor who, because of personal disability or
handicaps (physical or mental), are unable to attain a respectable standard of living by
their own effort. This corresponds with this revelation of Qur’an: “So that it will not
be a perpetual distribution among the rich from among you” (Qur’an, Surah 59.Al-
Hashr, Verse 7). Thirdly, divisions of the estate of a deceased person, in accordance
with a given formula, among a number of individuals to intensify the distribution of
wealth in society. Even though this principle, Islam tolerates some inequalities of
income because not all people are equal in their character, ability, and service to
society. This corresponds with the following verses of Qur’an:
● “And it is He who has made you successors upon the earth and has raised
some of you above others in degrees [of rank]” (Qur’an, Surah 6.Al-An’am,
Verse 165).
 ● “And Allah has favored some of you over others in provision” (Qur’an, Surah
16.An-Nahl, Verse 71).
● “Do they distribute the mercy of your Lord? It is We who have apportioned
among them their livelihood in the life of this world and have raised some of
them above others in degrees [of rank] that they may make use of one another
for service. But the mercy of your Lord is better than whatever they
accumulate” (Qur’an, Surah 43.Az-Zukhruf, Verse 32).

Translate:

Islam menekankan keadilan sosial distributif dan memasukkan dalam sistemnya

program redistribusi pendapatan dan kekayaan sehingga setiap individu dijamin
standar kehidupan yang manusiawi dan terhormat selaras dengan penghargaan
terhadap martabat manusia yang melekat dalam ajaran Islam. Chapra 1979, hlm.18).
Program Islam untuk redistribusi terdiri dari tiga bagian. Pertama, ini menyiratkan
bantuan dalam mencari pekerjaan yang menguntungkan bagi mereka yang
menganggur dan mereka yang mencari pekerjaan dan pembayaran yang adil untuk
pekerjaan itu. Kedua, menekankan pembayaran Zakat untuk mendistribusikan
kembali pendapatan dari orang kaya kepada orang miskin yang, karena cacat atau
cacat pribadi (fisik atau mental), tidak dapat mencapai standar hidup yang terhormat
dengan usaha mereka sendiri. Hal ini sesuai dengan wahyu Al-Qur’an ini: “Supaya
tidak terjadi pembagian yang terus-menerus di antara orang-orang kaya dari antara
kamu” (Qur’an, Surah 59. Al-Hashr, Ayat 7). Ketiga, pembagian harta peninggalan
orang yang meninggal, sesuai dengan rumus yang diberikan, di antara sejumlah
individu untuk mengintensifkan distribusi kekayaan dalam masyarakat. Meskipun
prinsip ini, Islam mentolerir beberapa ketidaksetaraan pendapatan karena tidak
semua orang sama dalam karakter, kemampuan, dan pelayanan kepada masyarakat.
Hal ini sesuai dengan ayat Al-Qur’an berikut ini:

● “Dan Dia-lah yang menjadikan kamu penerus-penerus di muka bumi dan

mengangkat sebagian dari kamu di atas yang lain beberapa derajat [derajat]”
(Qur’an, Surah 6.Al-An’am, Ayat 165).
 ● “Dan Allah telah melebihkan sebagian dari kamu atas sebagian yang lain dalam
rezeki” (Qur’an, Surah 16.An-Nahl, Ayat 71).
● “Apakah mereka membagikan rahmat Tuhanmu? Kami-lah yang telah
membagi di antara mereka penghidupan mereka dalam kehidupan dunia ini
dan telah mengangkat beberapa dari mereka di atas yang lain beberapa
derajat [derajat] agar mereka dapat memanfaatkan satu sama lain untuk
pelayanan. Tetapi rahmat Tuhanmu lebih baik dari apapun yang mereka
kumpulkan” (Qur’an, Surah 43.Az-Zukhruf, Ayat 32).

Explanation:

Islam's focus on distributive social justice and its program for income and wealth
redistribution aim to create a just and equitable society where everyone is afforded a
dignified standard of living.

Main idea:

Islam emphasizes distributive social justice and incorporates in its system a program
for redistribution of income and wealth so that every individual is guaranteed a
standard of living that is humane and respectable in harmony with the regard for the
dignity of man inherent in the teachings of Islam (Chapra 1979, p. 18).

Supporting details:

The Islamic program for redistribution consists of three parts; Even though this
principle, Islam tolerates some inequalities of income because not all people are equal
in their character, ability, and service to society.

Keywords:

● Distributive social justice: keadilan sosial yang distributif

● Redistribution: mengatur alokasi kekayaan, pendapatan, kepemilikan di antara
berbagai kelompok masyarakat.

Indonesian context:
in Indonesia there are official zakat institutions both government and private that are
useful for distributing zakat, and this zakat is allocated or given to the poor and others

Important word:

Islam emphasizes distributive social justice and incorporates in its system a program
for redistribution of income and wealth so that every individual is guaranteed a
standard of living that is humane and respectable in harmony with the regard for the
dignity of man inherent in the teachings of Islam. (Chapra 1979, p. 18)

(Islam menekankan keadilan sosial distributif dan memasukkan dalam sistemnya

program redistribusi pendapatan dan kekayaan sehingga setiap individu dijamin
standar hidup yang manusiawi dan terhormat selaras dengan penghargaan terhadap
martabat manusia yang melekat dalam ajaran Islam.)

Meaning of words:

● Inherent, adjective: existing in something as a permanent, essential, or

characteristic attribute. (sifat yang permanen)
● Perpetual, adjective: never ending or changing. (abadi)
● Livelihood, noun: securing the necessities of life. (mata
pencaharian/penghidupan)

Conclusion:

Islam emphasizes the importance of distributive social justice and includes a program
for the redistribution of income and wealth. This program consists of three elements:
providing employment opportunities and just wages, the payment of Zakat (charitable
giving), and the fair division of estates among heirs. These measures aim to ensure a
humane and respectable standard of living for every individual, in line with the
teachings of Islam. While Islam acknowledges that not all individuals are equal in
terms of character, ability, and contribution to society, it still promotes the principle
of social justice and discourages perpetual distribution of wealth among the rich. The
Qur'an recognizes that Allah has raised some individuals above others in degrees and
provisions, but it also emphasizes the importance of using one's blessings to serve
others and highlights the ultimate superiority of Allah's mercy over material
accumulation.

(Islam menekankan pentingnya keadilan sosial distributif dan memasukkan program

untuk redistribusi pendapatan dan kekayaan. Program ini terdiri dari tiga unsur:
memberikan kesempatan kerja dan upah yang adil, pembayaran zakat (pemberian
amal), dan pembagian harta yang adil di antara ahli waris. Langkah-langkah ini
bertujuan untuk memastikan standar hidup yang manusiawi dan terhormat bagi
setiap individu, sejalan dengan ajaran Islam. Sementara Islam mengakui bahwa tidak
semua individu sama dalam hal karakter, kemampuan, dan kontribusi kepada
masyarakat, itu tetap mempromosikan prinsip keadilan sosial dan mencegah distribusi
kekayaan terus-menerus di antara orang kaya. Al-Qur'an mengakui bahwa Allah telah
mengangkat beberapa individu di atas yang lain dalam derajat dan ketentuan, tetapi
juga menekankan pentingnya menggunakan nikmat seseorang untuk melayani orang
lain dan menyoroti keunggulan tertinggi rahmat Allah atas akumulasi materi.)

Therefore, distributing social justice in Islamic society, after guaranteeing a humane

standard of living to all members through the institution of Zakat, allows such
differentials in earnings, keeping with the differences in the value of the contributions
or services rendered, and each individual can receive an income corresponding to the
social value of the services he contributes to society. Muslims believe that social
justice and equality in opportunity (not outcome) are crucial for a society to function.
Zakat is a mechanism income to provide a minimum standard of living for the poor; it
is also one of the five tenets of Islam. It is generally agreed that the amount of Zakat
is 2.5 % of assets held. In countries where Zakat is not collected by the state, Islamic
banks establish a Zakat Fund for collecting money to be donated to religious
institutions (Rexhepi and Ramadani 2015).

Translate:

Oleh karena itu, mendistribusikan keadilan sosial dalam masyarakat Islam, setelah
menjamin standar hidup yang manusiawi untuk semua anggota melalui lembaga
Zakat, memungkinkan perbedaan pendapatan tersebut, sesuai dengan perbedaan
nilai kontribusi atau layanan yang diberikan, dan setiap individu dapat menerima.
pendapatan yang sesuai dengan nilai sosial dari layanan yang dia sumbangkan kepada
masyarakat. Muslim percaya bahwa keadilan sosial dan kesetaraan dalam
kesempatan (bukan hasil) sangat penting bagi masyarakat untuk berfungsi. Zakat
merupakan mekanisme pendapatan untuk memberikan standar hidup minimum bagi
masyarakat miskin; itu juga salah satu dari lima rukun Islam. Secara umum disepakati
bahwa jumlah zakat adalah 2,5% dari harta yang dimiliki. Di negara-negara di mana
Zakat tidak dikumpulkan oleh negara, bank Islam membentuk Dana Zakat untuk
mengumpulkan uang yang akan disumbangkan ke lembaga keagamaan (Rexhepi dan
Ramadani 2015).

Explanation:

In Islamic society, the concept of distributing social justice involves ensuring a humane
standard of living for all individuals through the institution of Zakat. Zakat is a
mandatory form of charitable giving in Islam and is one of the five pillars of the faith.
It serves as a mechanism to provide income and support for the poor, aiming to
alleviate poverty and promote social welfare.

Main idea:

Therefore, distributing social justice in Islamic society, after guaranteeing a humane

standard of living to all members through the institution of Zakat, allows such
differentials in earnings, keeping with the differences in the value of the contributions
or services rendered, and each individual can receive an income corresponding to the
social value of the services he contributes to society.

Supporting detail:

Zakat is a mechanism income to provide a minimum standard of living for the poor; it
is also one of the five tenets of Islam; It is generally agreed that the amount of Zakat
is 2.5 % of assets held.

Keyword:
 ● Social justice: keadilan sosial
● Zakat: bagian tertentu dari harta yang wajib dikeluarkan oleh setiap muslim
apabila telah mencapai syarat yang ditetapkan

Indonesian context:

in Indonesia zakat can be channeled through zakat institutions, from these zakat
institutions it will be distributed back to people in need such as the poor, converts,
and others

Important words:

Muslims believe that social justice and equality in opportunity (not outcome) are
crucial for a society to function.

(Muslim percaya bahwa keadilan sosial dan kesetaraan dalam kesempatan (bukan
hasil) sangat penting bagi masyarakat untuk berfungsi.)

Meaning of word:

● Rendered, adjective: to transmit to another (menyumbangkan;diberikan)

● Equality, noun: the state of being equal, especially in status, rights, and
opportunities (persamaan)
● Tenets, noun: a principle or belief, especially one of the main principles of a
religion or philosophy. (prinsip)

Conclusion:

The distribution of social justice is achieved by ensuring a humane standard of living

for all individuals through the institution of Zakat. This system allows for differences
in earnings based on the value of the contributions or services provided by each
individual to society. Muslims view social justice and equality of opportunity as
essential for the functioning of a society. Zakat serves as a mechanism to provide a
minimum standard of living for the poor and is one of the five pillars of Islam. Typically,
Zakat is calculated as 2.5% of an individual's assets. In countries where the state does
not collect Zakat, Islamic banks establish Zakat Funds to collect money for donation to
religious institutions.
 (Distribusi keadilan sosial dicapai dengan memastikan standar hidup yang manusiawi
bagi semua individu melalui lembaga Zakat. Sistem ini memungkinkan terjadinya
perbedaan pendapatan berdasarkan nilai kontribusi atau jasa yang diberikan oleh
setiap individu kepada masyarakat. Muslim memandang keadilan sosial dan
kesetaraan kesempatan sebagai hal yang penting untuk berfungsinya suatu
masyarakat. Zakat berfungsi sebagai mekanisme untuk menyediakan standar hidup
minimum bagi orang miskin dan merupakan salah satu dari lima rukun Islam. Biasanya,
Zakat dihitung sebagai 2,5% dari aset individu. Di negara-negara di mana negara tidak
mengumpulkan Zakat, bank Islam mendirikan Dana Zakat untuk mengumpulkan uang
untuk disumbangkan ke lembaga keagamaan.)

6. Freedom of the Individual Within the Context of Social Welfare

As Imam Shafi’i, the founder of the Shafi’i School of Muslim Jurisprudence said: “God
has created you free and therefore be nothing but free” (as cited in Chapra 2012).
Because man is born free no one, not even the state, has the right to abrogate this
freedom and to subject his life to regimentation; there is consensus among Muslim
jurists that restrictions cannot be imposed on a free, mature, and sane person (Chapra
2012). Everyone has his individual rights and his rights towards society. Jurists have
been agreed upon following principles (Chapra 2012):
● The larger interest of society takes precedence over the interest of the
individual;
● Although relieving hardship and promoting benefit are both among the prime
objectives of the Shari’ah, the former takes precedence over the latter;
● A bigger loss cannot be inflicted to relieve a smaller loss or a bigger benefit
cannot be sacrificed for a smaller one. Conversely, a smaller harm can be
inflicted to avoid a bigger harm or a smaller benefit can be sacrificed for a
larger benefit. I would say that those principles correspond with a proper social
justice in order that one society can function properly.

Translate:
Seperti Imam Syafi'i, pendiri Sekolah Syafi'i Muslim Fikih mengatakan: “Tuhan
telah menciptakan Anda bebas dan karena itu tidak lain adalah bebas
(sebagaimana dikutip dalam Chapra 2012). Karena manusia dilahirkan bebas, tidak
seorang pun, bahkan negara, memiliki hak untuk membatalkan kebebasan ini dan
untuk menundukkan hidupnya pada resimentasi; ada konsensus di antara Ahli
hukum Islam bahwa pembatasan tidak dapat dikenakan pada orang yang bebas,
dewasa, dan berakal orang (Chapra 2012). Setiap orang memiliki hak pribadinya
dan haknya terhadap masyarakat. Para ahli hukum telah menyepakati prinsip-
prinsip berikut (Chapra 2012):

• Kepentingan masyarakat yang lebih besar lebih diutamakan daripada

kepentingan individu;

• Meskipun menghilangkan kesulitan dan mempromosikan keuntungan adalah

yang utama tujuan syariah, yang pertama didahulukan dari yang kedua;

• Kerugian yang lebih besar tidak dapat ditimbulkan untuk mengurangi kerugian
yang lebih kecil atau keuntungan yang lebih besar tidak bisa dikorbankan untuk
yang lebih kecil. Sebaliknya, bahaya yang lebih kecil bisa terjadi ditimbulkan untuk
menghindari kerugian yang lebih besar atau keuntungan yang lebih kecil dapat
dikorbankan untuk yang lebih besar keuntungan. Saya akan mengatakan bahwa
prinsip-prinsip itu sesuai dengan keadilan sosial yang tepat agar suatu masyarakat
dapat berfungsi dengan baik.

Explanation:

According to Imam Shafi'i, who founded the Shafi'i School of Muslim

Jurisprudence, human beings are created free, and therefore, they should be
treated as such. No one, including the state, has the right to deprive individuals of
their freedom and subject their lives to excessive control.

Main idea:

As Imam Shafi’i, the founder of the Shafi’i School of Muslim Jurisprudence said:
“God has created you free and therefore be nothing but free” (as cited in Chapra
2012).
Supporting detail:

Because man is born free no one, not even the state, has the right to abrogate this
freedom and to subject his life to regimentation; there is consensus among Muslim
jurists that restrictions cannot be imposed on a free, mature, and sane person
(Chapra 2012).

Keywords:

● Freedom: kebebasan
● Individual rights: hak individu

Indonesian context:

Indonesia adheres to a democratic country, where freedom should be upheld. A

democratic country cannot restrict its people from expressing opinions and doing
things that do not violate applicable laws, because every citizen has their own
rights.

Important words:

God has created you free and therefore be nothing but free.

Meaning of words:

● Abrogate, verb: repeal or do away with (a law, right, or formal

agreement)/membatalkan
● Regimentation, noun: very strict control over the way a group of people
behave or the way something is done. (cara hidup teratur/diawasi)
● Precedence, noun: the condition of being considered more important than
someone or something else; priority in importance, order, or rank. (hak
lebih tinggi)

Conclusion:

In Islamic jurisprudence, it is recognized that every individual is born free and,

therefore, their freedom should not be abrogated by anyone, including the state.
While individuals have individual rights, there is also a recognition of their
responsibilities towards society. Muslim jurists have established principles that
prioritize the larger interest of society over the interest of the individual and
prioritize relieving hardship over promoting benefit. They also recognize that a
smaller harm may be inflicted to avoid a bigger harm, or a smaller benefit may be
sacrificed for a larger benefit. These principles align with the concept of social
justice and are essential for the proper functioning of a society.

(Dalam yurisprudensi Islam diakui bahwa setiap individu dilahirkan merdeka dan
karena itu kebebasannya tidak boleh dicabut oleh siapapun, termasuk negara.
Sementara individu memiliki hak individu, ada juga pengakuan atas tanggung
jawab mereka terhadap masyarakat. Para ahli hukum Islam telah menetapkan
prinsip-prinsip yang memprioritaskan kepentingan masyarakat yang lebih besar di
atas kepentingan individu dan memprioritaskan meringankan kesulitan daripada
mempromosikan manfaat. Mereka juga menyadari bahwa kerugian yang lebih
kecil dapat ditimbulkan untuk menghindari kerugian yang lebih besar, atau
keuntungan yang lebih kecil dapat dikorbankan untuk keuntungan yang lebih
besar. Prinsip-prinsip ini sejalan dengan konsep keadilan sosial dan sangat penting
untuk berfungsinya masyarakat).

Individual freedom, within the ethical limits of Islam, is therefore sacred only as
long as it does not conflict with the larger social interest or as long as the individual
does not transgress the rights of others.

Islamic law is not just a law, but also an ethics, as both constitute ‘a call to
righteous action in conformity with the guidance of Revelation’ (Reinhart 1983).
Thus, while the ethics related to contracts will include virtues such as honesty,
trust, transparency, etc., they also will incorporate fulfilling the legal obligations
and stipulations. As a result, ethics can be evaluated by examining whether the
legal conditions and stipulations of a contract are fulfilled or not (Arabi 1997). For
a transaction to be ethical, the overall goals of Shari’ah should also be fulfilled at
the contract level. Other than avoiding Riba and Gharar, indicates that fulfilling
Shari’ah at the transaction level would involve satisfying the objectives, principles,
and values underscored in the Islamic laws of transactions. This would include,
among others, linking returns to risks and bearing the risks of ownership by the
owner of the asset. An important related principle includes fulfilling the conditions
of a sale which is realized by transferring the asset to new owner. Similarly,
conditions of trust and guarantee relationships in terms of liability of loss has to
be implemented. Given the divine nature of these conditions, a contract would be
considered unethical if some of these stipulations are fulfilled.

Translate:

Oleh karena itu, kebebasan individu, dalam batas-batas etis Islam, hanya suci
sebagai selama tidak bertentangan dengan kepentingan sosial yang lebih besar
atau selama individu tidak melanggar hak orang lain. Hukum Islam bukan
hanya hukum, tetapi juga etika, karena keduanya merupakan 'panggilan untuk'
tindakan yang benar sesuai dengan tuntunan Wahyu '(Reinhart 1983). Dengan
demikian, etika yang berkaitan dengan akad akan mencakup kebajikan seperti
kejujuran, kepercayaan, transparansi, dll., mereka juga akan memasukkan
pemenuhan kewajiban hukum dan ketentuan. Akibatnya, etika dapat
dievaluasi dengan memeriksa apakah legal syarat dan ketentuan kontrak
terpenuhi atau tidak (Arabi 1997). Untuk sebuah. Agar transaksi menjadi etis,
keseluruhan tujuan syariah juga harus terpenuhi pada saat itu tingkat kontrak.
Selain menghindari Riba dan Gharar, menandakan pemenuhan itu. Syariah di
tingkat transaksi akan melibatkan pemenuhan tujuan, prinsip, dan nilai-nilai
yang ditegaskan dalam hukum transaksi Islam. Ini akan mencakup, antara lain
menghubungkan pengembalian dengan risiko dan menanggung risiko
kepemilikan oleh pemilik aset. Prinsip terkait yang penting termasuk
memenuhi persyaratan penjualan yang diwujudkan dengan mengalihkan aset
kepada pemilik baru. Demikian pula, kondisi hubungan kepercayaan dan
jaminan dalam hal kewajiban kerugian harus diimplementasikan. Mengingat
sifat ilahi dari kondisi ini, kontrak akan terjadi dianggap tidak etis jika beberapa
ketentuan ini dipenuhi.
Explanation:

Individual freedom in Islam is considered sacred as long as it does not conflict

with the larger social interest and does not infringe upon the rights of others.
Islamic law encompasses not only legal obligations but also ethics, as it calls
for righteous action in accordance with divine guidance. The ethics of contracts
in Islam include virtues such as honesty, trust, and transparency, along with
fulfilling legal conditions and stipulations. Ethical evaluation of a transaction
involves ensuring that the goals of Shariah are met at the contract level,
beyond avoiding interest (Riba) and excessive uncertainty (Gharar).

Main idea:

Islamic law is not just a law, but also an ethics, as both constitute ‘a call to
righteous action in conformity with the guidance of Revelation’ (Reinhart
1983).

Supporting details:

Thus, while the ethics related to contracts will include virtues such as honesty,
trust, transparency, etc., they also will incorporate fulfilling the legal
obligations and stipulations; Other than avoiding Riba and Gharar, indicates
that fulfilling Shari’ah at the transaction level would involve satisfying the
objectives, principles, and values underscored in the Islamic laws of
transactions.

Keywords:

● Ethics: etika
● Islamic law: hukum islam

Indonesian context:

individual freedom in Indonesia also remains in line with the customs, norms
and culture that apply in each region. so it is not merely free without rules or
norms of life.

Important words:
Individual freedom, within the ethical limits of Islam, is therefore sacred only
as long as it does not conflict with the larger social interest or as long as the
individual does not transgress the rights of others.

Meaning of words:

● Transgress, verb: infringe or go beyond the bounds of (a moral principle or

other established standard of behavior) / melanggar.
● Stipulation, noun: a condition or requirement that is specified
or demanded as part of an agreement / ketentuan

● Divine, adjective: of, from, or like God or a god (bersifat ketuhanan).

Conclusion:

In Islam, individual freedom is considered sacred as long as it does not conflict

with the larger social interest or violate the rights of others. Islamic law
encompasses not only legal obligations but also ethical principles, calling for
righteous action guided by Revelation. Ethical evaluations of contracts in Islam
involve fulfilling both legal conditions and stipulations, as well as aligning with
the overall goals of Shariah. This includes avoiding Riba (usury) and Gharar
(uncertainty) and ensuring that transactions adhere to the objectives,
principles, and values emphasized in Islamic laws. This encompasses linking
returns to risks, bearing the risks of ownership, fulfilling the conditions of a
sale, and establishing trust and guarantee relationships. Failure to fulfill these
divine stipulations would render a contract unethical.

(Dalam Islam, kebebasan individu dianggap suci selama tidak bertentangan

dengan kepentingan sosial yang lebih besar atau melanggar hak orang lain.
Hukum Islam tidak hanya mencakup kewajiban-kewajiban hukum tetapi juga
prinsip-prinsip etis, menyerukan tindakan yang benar dipandu oleh Wahyu.
Evaluasi etika kontrak dalam Islam melibatkan pemenuhan kondisi dan
ketentuan hukum, serta menyelaraskan dengan keseluruhan tujuan Syariah.
Ini termasuk menghindari Riba (riba) dan Gharar (ketidakpastian) dan
memastikan bahwa transaksi mematuhi tujuan, prinsip, dan nilai yang
ditekankan dalam hukum Islam. Ini mencakup menghubungkan pengembalian
 dengan risiko, menanggung risiko kepemilikan, memenuhi persyaratan
penjualan, dan membangun hubungan kepercayaan dan jaminan. Kegagalan
untuk memenuhi ketentuan ilahi ini akan membuat kontrak menjadi tidak etis)

The basic principle for commercial transactions is “permissibility” or “prohibitions”

which signifies that all acts or contracts are permissible unless there is a clear
injunction of prohibition (Ahmed 2012, p. 4). The two mean categories of prohibitions
related to economic transactions recognized in Shari’ah are Riba and Gharar. These
prohibitions are made to bring fairness, good measure and more consideration over
complete freedom of contracts (Ahmed 2012, p. 4).

Translate:

Prinsip dasar untuk transaksi komersial adalah “dibolehkan” atau “larangan”

yang menandakan bahwa semua tindakan atau kontrak diperbolehkan kecuali
ada perintah pelarangan yang jelas (Ahmed 2012, hlm. 4). Dua kategori
larangan yang terkait dengan transaksi ekonomi yang diakui dalam Syariah
adalah Riba dan Gharar. Larangan ini dibuat untuk menghadirkan keadilan,
ukuran yang baik, dan lebih banyak pertimbangan atas kebebasan kontrak
sepenuhnya (Ahmed 2012, hlm. 4).

Explanation:

The principle of "permissibility" or "prohibition" in commercial transactions

within Islam implies that all acts or contracts are considered permissible unless
there is a clear prohibition stated. This means that individuals have the
freedom to engage in various economic transactions unless there is a specific
injunction against them.

Main idea:

The basic principle for commercial transactions is “permissibility” or

“prohibitions” which signifies that all acts or contracts are permissible unless
there is a clear injunction of prohibition (Ahmed 2012, p. 4).

Supporting details:
The two mean categories of prohibitions related to economic transactions
recognized in Shari’ah are Riba and Gharar.

Keywords:

● Permissibility: hal mengizinkan

● Prohibitions: larangan-larangan
● Riba: tambahan nominal yang diperoleh pemberi pinjaman dengan
cara melebihkan jumlah angka pinjaman yang harus dikembalikan oleh
peminjam.
● Gharar: hal yang dihindari dalam transaksi menurut prinsip ekonomi
Islam, demikian pula dengan maysir.

Indonesian context:

Many Indonesian people are aware that riba and gharar are things that are not
allowed in economic transactions, therefore many have turned to Islamic
banks.

Important words:

The two main categories of prohibitions related to economic transactions

recognized in Shari’ah are Riba and Gharar.

Meaning of words:

● Prohibition, noun: the action of forbidding something, especially by

law.
● Riba, noun: to increase or to exceed (tambahan nominal yang diperoleh
pemberi pinjaman dengan cara melebihkan jumlah angka pinjaman
yang harus dikembalikan oleh peminjam.)
● Gharar: uncertainty, hazards, or risk (hal yang dihindari dalam transaksi
menurut prinsip ekonomi Islam, demikian pula dengan maysir.)

Conclusion:

In Islamic commercial transactions, the basic principle is permissibility,

meaning that all acts or contracts are allowed unless explicitly prohibited.
 Shariah recognizes two main prohibitions in economic transactions: Riba
(usury) and Gharar (uncertainty). These prohibitions are intended to promote
fairness, equitable measures, and considerations, emphasizing the importance
of balance and ethical considerations over absolute freedom in contracts.

(Dalam transaksi komersial Islam, prinsip dasarnya adalah diperbolehkan,

artinya semua tindakan atau kontrak diperbolehkan kecuali dilarang secara
eksplisit. Syariah mengenal dua larangan utama dalam transaksi ekonomi: Riba
(riba) dan Gharar (ketidakpastian). Larangan ini dimaksudkan untuk
mempromosikan keadilan, tindakan yang adil, dan pertimbangan,
menekankan pentingnya keseimbangan dan pertimbangan etis atas
kebebasan mutlak dalam kontrak)

A financial activity will be ethical if it promotes good in the society. The same logic
can be used to determine the ethicality of transactions and activities of Islamic banks.
An activity of an Islamic bank would be ethical when it enhances welfare and morality
of individuals, which make the whole society. According to this, any financial activities
that produce adverse effects on either welfare or Islamic morals would be considered
unethical. Another aspect related to ethics at the contract level relates to intention
(Niyah) and outcomes. Niyah is an integral component in worshiping rituals (Ibadat),
in economic affairs (Fiqh Muamalat). Illegitimate motive will make a contract illegal
even when the all the legal components of a contract are fulfilled. An intention of
coming up with an illicit act using a valid contract would not only be void, but also
immoral. The legality of a transaction will not only depend on the validity of a contract
but also on the end use of the contract which can be based on forecasts rather than
actual results (by the Niyah) and e based on actual results rather than forecasts by
examining the outcome or consequences (Arabi 1997).

Translate:

Aktivitas keuangan akan etis jika mempromosikan kebaikan di masyarakat.

Logika yang sama dapat digunakan untuk menentukan etika transaksi dan
aktivitas bank syariah. Suatu aktivitas bank syariah akan menjadi etis ketika
meningkatkan kesejahteraan dan moralitas individu, yang membuat seluruh
masyarakat. Menurut ini, setiap kegiatan keuangan yang menghasilkan efek
buruk baik pada kesejahteraan atau moral Islam akan dianggap tidak etis.
Aspek lain yang terkait dengan etika pada akad adalah terkait dengan niat
(niyah) dan hasil. Niyah merupakan komponen integral dalam ibadah ritual
(Ibadat), dalam urusan ekonomi (Fiqh Muamalat). Motif yang tidak sah akan
membuat suatu kontrak menjadi ilegal meskipun semua komponen hukum
dari suatu kontrak telah terpenuhi. Niat untuk melakukan perbuatan haram
dengan menggunakan akad yang sah tidak hanya batal, tetapi juga tidak
bermoral. Legalitas suatu transaksi tidak hanya tergantung pada sah tidaknya
suatu akad tetapi juga pada penggunaan akhir akad yang dapat didasarkan
pada ramalan daripada hasil yang sebenarnya (oleh Niyah) dan e berdasarkan
pada hasil yang sebenarnya daripada ramalan dengan pemeriksaan hasil atau
konsekuensi (Arabi 1997).

Explanation:

Islamic ethics in financial activities emphasize the promotion of societal

welfare and the adherence to moral values. The intention behind a contract
and its impact on individuals and society are key factors in determining its
ethicality. Contracts driven by legitimate intentions and resulting in positive
outcomes are considered ethical, while those involving illicit intentions or
detrimental consequences are deemed unethical.

Main idea:

A financial activity will be ethical if it promotes good in the society.

Supporting details:

The same logic can be used to determine the ethicality of transactions and
activities of Islamic banks; An activity of an Islamic bank would be ethical when
it enhances welfare and morality of individuals, which make the whole society.

Keywords:

● Ethical: Referring to actions or activities that promote good and align

with moral principles (etika).
 ● Welfare: Concerning the well-being and prosperity of individuals and
society as a whole (kesejahteraan).
● Intention: The purpose or motive behind an action or decision, which
plays a role in determining the ethicality of an activity (maksud).

Indonesian context:

Islamic banks in Indonesia must offer products that are useful to help
customers, such as hajj savings, qurban savings, easy infaq which are
distributed properly. These things can be a good concern for prospective
customers

Important words:

An activity of an Islamic bank would be ethical when it enhances welfare and

morality of individuals, which make the whole society.

Meaning of words:

● Determine, verb: cause (something) to occur in a particular way; be

the decisive factor in (menentukan).
● Illicit, adjective: forbidden by law, rules, or custom. (dilarang)
● Forecast, noun: predict or estimate (future or event) (ramalan).

Conclusion:

Ethical financial activities, including those carried out by Islamic banks, are
determined by their promotion of societal good and welfare. Islamic banks
strive to enhance the welfare and morality of individuals, thereby benefiting
society as a whole. Any financial activities that have adverse effects on welfare
or Islamic morals are considered unethical. Intention (Niyah) and outcomes are
also crucial in assessing the ethicality of contracts. Illegitimate motives render
a contract illegal, even if all legal requirements are met. The end use of a
contract, based on intentions and actual results, influences its legality and
moral standing.
 (Kegiatan keuangan yang etis, termasuk yang dilakukan oleh bank syariah,
ditentukan oleh promosi kebaikan dan kesejahteraan masyarakat. Bank
syariah berusaha untuk meningkatkan kesejahteraan dan moralitas individu,
sehingga bermanfaat bagi masyarakat secara keseluruhan. Setiap kegiatan
keuangan yang berdampak buruk pada kesejahteraan atau moral Islam
dianggap tidak etis. Niat (Niyah) dan hasil juga penting dalam menilai etika
kontrak. Motif tidak sah membuat kontrak ilegal, bahkan jika semua
persyaratan hukum dipenuhi. Penggunaan akhir suatu kontrak, berdasarkan
niat dan hasil aktual, memengaruhi legalitas dan kedudukan moralnya).

All Islamic banks will be expected to be ethical in ways similar to their conventional
counterparts. As mentioned above, ethics include among others conducting
operations with integrity and with due skill, care and diligence, avoid conflict of
interest (Davies 2002). As ethics relates to the notions of what is right and wrong in
the organizational context, for Islamic banks it’s also influenced by the Islamic notions
of legality and morality. Islamic banks have additional ethical dimensions which need
to fulfill according to the laws and morals of Shari’ah.

Translate:

Semua bank Islam diharapkan untuk bersikap etis dengan cara yang serupa
dengan rekan konvensional mereka. Seperti disebutkan di atas, etika antara
lain melakukan operasi dengan integritas dan keterampilan, perhatian dan
ketekunan, menghindari konflik kepentingan (Davies 2002). Karena etika
berkaitan dengan pengertian tentang apa yang benar dan salah dalam konteks
organisasi, untuk bank syariah juga dipengaruhi oleh pengertian Islam tentang
legalitas dan moralitas. Bank syariah memiliki dimensi etika tambahan yang
perlu dipenuhi sesuai dengan hukum dan moral syariah.

Explanation:

Islamic banks, like their conventional counterparts, are expected to adhere to

ethical standards in their operations. These ethical standards encompass
principles such as conducting business with integrity, demonstrating
competence and diligence, and avoiding conflicts of interest. However, for
Islamic banks, ethics extend beyond these general principles and are
influenced by the Islamic notions of legality and morality.

Main idea:

All Islamic banks will be expected to be ethical in ways similar to their

conventional counterparts.

Supporting details:

As ethics relates to the notions of what is right and wrong in the organizational
context, for Islamic banks it’s also influenced by the Islamic notions of legality
and morality.

Keywords:

● Islamic bank: bank islami atau bank syari’ah

● Ethics: etika

Indonesian context:

in Indonesia Islamic banks and conventional banks can work together and
avoid conflicts that damage both or one of them.

Important words:

The sentence you provided is: "Islamic banks have additional ethical
dimensions which need to fulfill according to the laws and morals of Shari’ah."

Meaning of words:

● Notion, noun: a conception of or belief about something. (gagasan)

Conclusion:

Islamic banks, like conventional banks, are expected to adhere to ethical

standards such as integrity, skill, care, and avoiding conflicts of interest.
However, Islamic banks also have additional ethical dimensions influenced by
 Islamic notions of legality and morality, as guided by the laws and morals of
Shari'ah.

(Bank syariah, seperti bank konvensional, diharapkan mematuhi standar etika

seperti integritas, keterampilan, kepedulian, dan menghindari konflik
kepentingan. Namun, bank Islam juga memiliki dimensi etis tambahan yang
dipengaruhi oleh gagasan Islam tentang legalitas dan moralitas, sebagaimana
dipandu oleh hukum dan moral Syariah).

7. What Remains Behind Islamic Financial and Banking

System?
There is much more than the interest free principle under the Islamic Banking and
Financial System. Five major characteristics of Islamic Banking System follow (Ahmad
2000):
• The first and basic element of Islamic Banking system involves a system of equity
sharing, which means that the whole system operates on the principle of a variable
return depending on the productivity and the performance of the projects (Ahmad
2000; Haiwad 2008).
• The second, the vision of Islamic Banking. Moving the whole economy, its major
monetary system, and business transactions from debt based partnership to an equity
based partnership and risk sharing. It present a new way or organizing the economy,
it is calling for everyone to participate in productive system. This is opposite of the
conventional system where the whole economy is based on making money from
money based on speculations (Ahmad 2000; Haiwad 2008).
• Third, the risk sharing framework. Due to any transaction in Islamic Banking the risk
is been shared between the counter partners, both borrowers and lenders, Ethics and
Social Responsibility in Islamic Finance 139 capital providers and entrepreneurs, bank
and client, they all share the risk as a main condition to take part in the transaction

Translate
Apa yang Tersisa di Balik Keuangan dan Perbankan Islam
Sistem?
Ada lebih dari prinsip bebas bunga di bawah Perbankan Islam dan Sistem keuangan.
Lima karakteristik utama dari Sistem Perbankan Islam mengikuti (Ahmad 2000):
• Unsur pertama dan dasar dari sistem Perbankan Islam melibatkan sistem
pembagian ekuitas, yang berarti bahwa seluruh sistem beroperasi berdasarkan prinsip
pengembalian variabel tergantung pada produktivitas dan kinerja proyek (Ahmad
2000; Haiwad 2008).
• Yang kedua, visi Perbankan Syariah. Menggerakkan seluruh ekonomi, itu sistem
moneter utama, dan transaksi bisnis dari kemitraan berbasis utang untuk kemitraan
berbasis ekuitas dan pembagian risiko. Ini menyajikan cara baru atau mengorganisir
ekonomi, itu panggilan untuk semua orang untuk berpartisipasi dalam produktif
sistem. Ini kebalikan dari sistem konvensional di mana seluruh perekonomian berada
berdasarkan menghasilkan uang dari uang berdasarkan spekulasi (Ahmad 2000
Haiwad 2008).
• Ketiga, kerangka pembagian risiko. Karena setiap transaksi di Perbankan Islam
risiko dibagi antara mitra counter, baik peminjam dan pemberi pinjaman, Etika dan
Tanggung Jawab Sosial dalam Keuangan Islam 139 penyedia modal dan pengusaha,
bank dan klien, mereka semua berbagi risiko sebagai syarat utama untuk ikut serta
dalam transaksi.

Explanation

Interest free principle under the Islamic Banking and Financial System. The Five
features are :

The first and basic element of the Islamic Banking system involves the system equity
distribution, principal

Second, the vision of Islamic Banking. Drives the entire economy, it's primary
monetary system, and business transactions from debt-based partnerships to equity-
based partnerships and risk sharing

Third, the risk sharing framework. Because every transaction in Islamic Banking risk is
shared between counter partners, both borrower and lender, Ethics and Social
Responsibility in Islamic Finance.
Main Idea :

There is much more than the interest free principle under the Islamic Banking and
Financial System.

Supporting Details :

The first and basic element of Islamic Banking system involves a system of

equity sharing.

Second, the vision of Islamic Banking.

Third, the risk sharing framework.

Keyword :

Interest free principle under Islamic Banking

Financial System

Indonesian Context :

Islamic Banking in Indonesia is considered to have not fully implemented Islamic

principles. On the contrary, this banking adheres to the principle of a capitalist
economy that is competing for large profits.

Important word :

Syariah banking Drives the entire economy, major monetary systems, and business
transactions from debt partnership partnerships to equity partnerships and risk
sharing

Meaning of words :

Involves, (verb) : become involved (stuck, carried away) in a problem (melibatkan)

Conclusion
 Five major characteristics of Islamic Banking System follow (Ahmad 2000): • The first and
basic element of Islamic Banking system involves a system of equity sharing, which means
that the whole system operates on the principle of a variable return depending on the
productivity and the performance of the projects (Ahmad 2000; Haiwad 2008).

Moving the whole economy, its major monetary system, and business transactions from
debt based partnership to an equity based partnership and risk sharing.

(Lima karakteristik utama dari Sistem Perbankan Islam mengikuti (Ahmad 2000): • Elemen
pertama dan dasar dari sistem Perbankan Islam melibatkan sistem pembagian ekuitas,
yang berarti bahwa seluruh sistem beroperasi berdasarkan prinsip pengembalian variabel
tergantung pada produktivitas dan kinerja proyek (Ahmad 2000; Haiwad 2008).

Menggerakkan seluruh ekonomi, sistem moneter utamanya, dan transaksi bisnis dari
kemitraan berbasis utang menjadi kemitraan berbasis ekuitas dan pembagian risiko.)

● Fourth, Islamic economy is rooted by Ethics Framework where the ethical and social
dimensions play an essential and significant role. There are Halal-Per- missible and
Haram-Forbidden activities included in all private and public economic activities. Even
there can be some demand for a specific product or service as producing and selling
alcohol, pork or gambling, if its forbidden by the Shari’ah, the products and services
are unacceptable and strictly prohibited (Ahmad 2000; Haiwad 2008).
● Fifth, the main aim of money in Islamic Banking is to stimulate economic production,
to encourage and finance innovation, new ideas, skills, and oppor- tunities. Islamic
Finance and Banking is based on physical expansion of econ- omy, not the financial
expansion. Money cannot beget money (Ahmad 2000).
● Sixth, the most fundamental and important characteristic is that Islamic Finan- cial and
Banking System is non-inflationary.

(Ahmad 2000; Haiwad 2008; Qur’an, Surah 7.Al- ’A’Raf, Verse The biggest concerns of
all economies are to maintain the inflationary rate on the proper level. Islamic finance
restores equilibrium between the financial expansion, money supply and the physical
 expansion. Stability in the value of money is a primary goal of Islamic Finance85;
Qur’an, Surah 17.Al-Isra, Verse 35; Qur’an, Surah 26.Ash- Shu’ara, Verse 181).

Translate

Keempat, ekonomi Islam berakar pada Kerangka Etika dimana etika dan dimensi sosial
memainkan peran penting dan signifikan. Ada kegiatan Halal-Permissible dan Haram-
Forbidden yang termasuk dalam semua kegiatan ekonomi swasta dan publik. Bahkan
mungkin ada permintaan untuk produk atau layanan tertentu seperti memproduksi
dan menjual alkohol, daging babi atau perjudian, jika dilarang oleh Syariah, produk
dan layanan tersebut tidak dapat diterima dan dilarang keras (Ahmad 2000; Haiwad
2008).

Kelima, tujuan utama uang dalam Perbankan Islam adalah untuk merangsang produksi
ekonomi, untuk mendorong dan membiayai inovasi, ide baru, keterampilan, dan
peluang. Keuangan dan Perbankan Islam didasarkan pada ekspansi fisik ekonomi,
bukan ekspansi keuangan. Uang tidak bisa melahirkan uang (Ahmad 2000).

Keenam, karakteristik yang paling mendasar dan penting adalah bahwa Sistem
Keuangan dan Perbankan Islam bersifat non-inflasi.

Kekhawatiran terbesar dari semua ekonomi adalah untuk mempertahankan tingkat

inflasi pada tingkat yang tepat. Keuangan Islam mengembalikan keseimbangan antara
ekspansi keuangan, jumlah uang beredar dan ekspansi fisik. Stabilitas nilai uang adalah
tujuan utama Keuangan Islam (Ahmad 2000; Haiwad 2008; Qur'an, Surah 7.Al-'A'Raf,
Ayat 85; Qur'an, Surah 17.Al-Isra, Ayat 35 ; Qur'an, Surah 26.Ash-Syu'ara, Ayat 181).

Main Idea :

The biggest concerns of all economies are to maintain the inflationary rate on the
proper level.

Supporting Details :

● Fourth, Islamic economy is rooted by Ethics Framework where the ethical and social
dimensions play an essential and significant role.
● Fifth, the main aim of money in Islamic Banking is to stimulate economic production.
● Sixth, the most fundamental and important characteristic is that Islamic Finan- cial and
Banking System is non-inflationary.

Keyword :
Interest free principle under Islamic Banking
Financial System

Indonesian Context :
Islamic finance restores equilibrium between the financial expansion, money supply
and the physical expansion. Stability in the value of money is a primary goal of Islamic
Finance.

Important word :

The biggest concerns of all economies are to maintain the inflationary rate on the
proper level. Islamic finance restores equilibrium between the financial expansion,
money supply and the physical expansion. Stability in the value of money is a primary
goal of Islamic Finance.

Meaning of word :

Maintain, (verb) : an activity to maintain and maintain existing facilities as well as

repair. (Menjaga)

Inflationary, (adjective) : increase in prices of goods and services in general and

continuously within a certain period of time (inflasi)

Conclusion :

Fifth, the main aim of money in Islamic Banking is to stimulate economic production, to
encourage and finance innovation, new ideas, skills, and oppor- tunities.

Islamic Finance and Banking is based on physical expansion of econ- omy, not the financial
expansion.

(Ahmad 2000; Haiwad 2008; Qur`an, Surah 7.

Al- `A`Raf, Verse The biggest concerns of all economies are to maintain the inflationary
rate on the proper level.

Islamic finance restores equilibrium between the financial expansion, money supply and
the physical expansion.

Stability in the value of money is a primary goal of Islamic Finance85; Qur`an, Surah 17.

Al-Isra, Verse 35; Qur`an, Surah 26..

(Kelima, tujuan utama uang dalam Perbankan Islam adalah untuk merangsang produksi
ekonomi, untuk mendorong dan membiayai inovasi, ide baru, keterampilan, dan peluang.

Keuangan dan Perbankan Islam didasarkan pada ekspansi fisik ekonomi, bukan ekspansi
keuangan.

(Ahmad 2000; Haiwad 2008; Qur`an, Surah 7.

Al- `A`Raf, Ayat Kekhawatiran terbesar dari semua ekonomi adalah mempertahankan
tingkat inflasi pada tingkat yang tepat.

Keuangan Islam mengembalikan keseimbangan antara ekspansi keuangan, jumlah uang

beredar dan ekspansi fisik.

Stabilitas nilai uang adalah tujuan utama Keuangan Islam85; Qur'an, Surah 17.

Al-Isra, Ayat 35; Qur'an, Surah 26.)

8. Conclusion

This chapter discuss the role of laws and morals in defining ethical practices of Islamic
banks. While Islamic law and ethics appears to be closely linked, cases mayarise when
the practice of Islamic banks can produce unethical results even when the contracts
are legitimate. To judge if banking practices are ethical or not, it is important to
examine the consequence of transactions on morality and welfare. Situations can arise
when the transactions may not have legal/ethical issues at the contract level, but can
be unethical as it has adverse impact on welfare or morality. In this chapter is
discussed the morality of excessive and there is concluded that the practice of Islamic
banks could be unethical if they fuel the increase in indebtedness of individuals
beyond certain levels.

The ethicality of Islamic banking practice arising from the effects on moral values
cannot be grasped by focusing at the legal aspects of contracts only. A question then
arises whether morality and ethical norms can be realized by Islamic banks that are
engaged in expanding their businesses in competitive markets. While there are certain
aspects of ethical self-regulation at the organizational level that can be useful, it has
limitations. Davies (2002, p. 281) points out that self-regulation may not be
appropriate for ‘raising standards in the market as a whole, or dealing with a problem
where there was a need for the whole industry to change’.

Furthermore, when the conduct of banks has implications that go beyond its realm
and affects other members of the society, regulatory oversight may be necessary to
govern these activities.

Translate

Bab ini membahas peran hukum dan moral dalam mendefinisikan praktik etika bank
Islam. Sementara hukum dan etika Islam tampaknya terkait erat, kasus dapat muncul
ketika praktik bank Islam dapat menghasilkan hasil yang tidak etis bahkan Ketika
kontrak itu sah. Untuk menilai apakah praktik perbankan etis atau tidak, itu benar
penting untuk mengkaji konsekuensi transaksi terhadap moralitas dan kesejahteraan.
Situasi dapat muncul ketika transaksi mungkin tidak memiliki masalah hukum/etika di
tingkat kontrak, tetapi dapat menjadi tidak etis karena berdampak buruk pada
kesejahteraan atau moralitas. Dalam bab ini dibahas akhlak yang berlebihan dan ada
kesimpulan bahwa praktik bank syariah bisa menjadi tidak etis jika memicu
peningkatan utang individu di luar tingkat tertentu.

Etisitas praktik perbankan syariah yang timbul dari efek pada nilai-nilai moral tidak
dapat dipahami dengan berfokus pada aspek hukum kontrak saja. Pertanyaan kemudian
muncul apakah moralitas dan norma etika dapat diwujudkan oleh bank syariah yang
bergerak dalam mengembangkan usahanya di pasar yang kompetitif. Sementara ada
aspek-aspek tertentu dari regulasi-diri etis di tingkat organisasi yang dapat bermanfaat,
ia memiliki keterbatasan. Davies (2002, p. 281) menunjukkan bahwa self-regulation
mungkin tidak sesuai untuk 'meningkatkan standar di pasar secara keseluruhan, atau
menangani masalah di mana seluruh industri perlu berubah'. Selanjutnya, ketika
perilaku bank memiliki implikasi yang melampaui wilayahnya dan mempengaruhi
anggota masyarakat lainnya, pengawasan peraturan mungkin diperlukan untuk
mengatur kegiatan ini.

Main Idea :

The role of law and morals in defining the ethical practices of Islamic banks. While
Islamic law and ethics appear to be inextricably linked, cases may arise when Islamic
banking practices can produce unethical results even when the contract is valid.

Supporting Details :

In order to judge whether banking practices are ethical or not, it is really important to
examine the consequences of transactions on morality and well-being. The ethicality of
Islamic banking practices arising from the effect on moral values cannot be understood
by focusing on the legal aspects of contracts alone.

Keyword :

Law and morals in defining the ethical practices of Islamic banks.

Indonesia context :

Morals and ethics can become unethical if they trigger an increase in individual debt
beyond a certain level.

Important word :

In order to judge whether banking practices are ethical or not, it is really important to
examine the consequences of transactions on morality and well-being. Situations may
arise where a transaction may not have legal/ethical issues at the contract level, but may
be unethical due to an adverse impact on welfare or morality.

Meaning of word :

Cari kata yg kamu gafaham

Conclusion :
Situations can arise when the transactions may not have legal/ethical issues at the
contract level, but can be unethical as it has adverse impact on welfare or morality.

The ethicality of Islamic banking practice arising from the effects on moral values
cannot be grasped by focusing at the legal aspects of contracts only.

(Situasi dapat muncul ketika transaksi mungkin tidak memiliki masalah hukum/etika
di tingkat kontrak, tetapi dapat menjadi tidak etis karena berdampak buruk pada
kesejahteraan atau moralitas.

Etisitas praktik perbankan syariah yang timbul dari pengaruh nilai moral tidak dapat
dipahami dengan berfokus pada aspek hukum kontrak saja.)

If Islamic banks narrowly focus on legality of transactions that can lead unethical
outcomes, there is a need to have a mechanism to ensure that the Islamic banking
practices are ethical by not contradicting the moral teachings of Islam. Kamali (2008)
states that “if public interest (maslahah) necessitates it, a lawful government is
authorized to change the reprehensible into forbidden and the recommended into
obligatory. In the past, Islamic societies had institutions that oversaw the morals issues
related to economic affairs. . . while the courts dealt with the legal issues, the market
controller (muhtasib) was authorized to intervene and stop immoral practices. During
contemporary times, this role can be taken up by the regulators whereby ensuring ethics
at the organizational level is moved to the public domain” (as cited in Ahmed 2012, p.
8).

Prohibition of Riba is central to Islamic financial ethics and law. All transactions
and contracts must be free from elements of Riba. Moreover, Islamic banking is not
based on creditor-debtor relationship, but on the principles of PSL between the bank
and its customer under different financing arrangements and other trading and leasing
contracts. Whilst, non-Islamic banks rely primarily on the interest rate instrument,
Islamic banks use a variety of contracts and instruments that have been developed in
compliance with Shari’ah laws. Moreover, in Islamic finance, the nexus between
financial assets and real assets is crucial. Indeed, they connect bank resources in
financing real assets rather than investing in derivatives. In this paper, we introduced
the foundation for Islamic banking practices and we discussed the governance concepts
important in the conduct of Islamic banking. The main differences between Islamic and
non Islamic banks were identified as well. According to the literature (for example, see
Rexhepi and Ramadani 2015), Islamic banks outperform non-Islamic banks especially
during the last financial crisis.

Translate :

Jika bank syariah secara sempit fokus pada legalitas transaksi yang dapat
mengarah pada hasil yang tidak etis, ada kebutuhan untuk memiliki mekanisme untuk
memastikan bahwa praktik perbankan syariah etis dengan tidak bertentangan dengan
ajaran moral Islam. Kamali (2008) menyatakan bahwa “jika kepentingan umum
(maslahah) mengharuskannya, pemerintah yang sah berwenang mengubah yang tercela
menjadi terlarang dan yang dianjurkan menjadi wajib. Pada masa lalu, masyarakat
Islam memiliki lembaga-lembaga yang mengawasi masalah-masalah akhlak yang
berkaitan dengan urusan ekonomi. . . sementara pengadilan menangani masalah hukum,
penguasa pasar (muhtasib) berwenang mengintervensi dan menghentikan praktek-
praktek asusila. Selama masa kontemporer, peran ini dapat diambil oleh regulator
dimana memastikan etika di tingkat organisasi dipindahkan ke ranah publik”
(sebagaimana dikutip dalam Ahmed 2012, hlm. 8).

Larangan Riba adalah inti dari etika dan hukum keuangan Islam. Semua
transaksi dan akad harus bebas dari unsur Riba. Selain itu, perbankan syariah tidak
didasarkan pada hubungan kreditur-debitur, tetapi pada prinsip-prinsip PSL antara bank
dan nasabahnya di bawah pengaturan pembiayaan yang berbeda dan kontrak
perdagangan dan sewa lainnya. Sementara bank non-Islam terutama mengandalkan
instrumen suku bunga, bank syariah menggunakan berbagai kontrak dan instrumen
yang telah dikembangkan sesuai dengan hukum Syariah. Selain itu, dalam keuangan
Islam, hubungan antara aset keuangan dan aset riil sangat penting. Memang, mereka
menghubungkan sumber daya bank dalam membiayai aset riil daripada berinvestasi
dalam derivatif. Dalam makalah ini, kami memperkenalkan dasar-dasar praktik
perbankan syariah dan kami mendiskusikan konsep-konsep tata kelola yang penting
dalam menjalankan perbankan syariah. Perbedaan utama antara bank Islam dan non-
Islam juga diidentifikasi. Menurut literatur (misalnya lihat Rexhepi dan Ramadani
2015), bank syariah mengungguli bank non-syariah terutama selama krisis keuangan
terakhir

Main Idea :

Prohibition of Riba is central to Islamic financial ethics and law

Supporting Details :

Islamic banking is not based on creditor-debtor relationships, but on PSL principles

between banks and their customers under different financing arrangements and trading
contracts and other leases. While non-Islamic banks mainly rely on interest rate
instruments, Islamic banks use a variety of contracts and instruments that have been
developed in accordance with Sharia law

Keyword :

Transaction legality

Prohibition of Riba

Indonesia context :

in Islamic finance, the relationship between financial assets and real assets is very
important. Indeed, they attribute bank resources in financing real assets rather than
investing in derivatives.

Important word :

if the public interest (maslahah) requires it, the legitimate government stipulates that
what is reprehensible becomes prohibited and what is recommended becomes
obligatory.

Meaning of word :

Different, (adjective) : things that make them different from one another (berbeda)

Conclusion :
Concluding paragraphs this introduces the basics of Islamic banking practices and we
discuss the governance concepts that are important in conducting Islamic banking. Key
differences between Islamic and non-Islamic banks are also identified. According to
the literature (e.g. see Rexhepi and Ramadani 2015), Islamic banks outperformed non-
Sharia banks especially during the last financial crisis

(Kesimpulan paragraf ini memperkenalkan dasar-dasar praktik perbankan syariah dan

kami mendiskusikan konsep-konsep tata kelola yang penting dalam menjalankan
perbankan syariah. Perbedaan utama antara bank Islam dan non-Islam juga
diidentifikasi. Menurut literatur (misalnya lihat Rexhepi dan Ramadani 2015), bank
syariah mengungguli bank non-syariah terutama selama krisis keuangan terakhir)