Risk Management of Musyarakah Mutanaqisah Contract in Sharia Banks in Indonesia: Legal and Operational Issues

Ivan Rahmat Santoso, Molbi Harsanto, Ismet Sulila, Agil Bahsoan

Abstract


This paper discusses how to solve problems occurring in the risk management of musyarakah mutanaqisah contract on home financing in sharia banks in Indonesia, particularly on its legal and operational issues. This study used a qualitative method using library data collection techniques and interviews. The study found that legal and operational risk management issues could be satisfactorily resolved by agreement of rescheduling, adding new conditions, and using new structures in accordance with Islamic teachings and applicable positive laws. In addition, ownership proof of some is needed to minimize the risk for the bank and the customer.

Keywords


Legal Issues, Musyarakah Mutanaqisah (MMQ) Contract, Risk Management, Operational Issues

Full Text:

PDF

References


Alam, N., Zainuddin, S. S. B., & Rizvi, S. A. R. (2019). Ramifications of varying banking regulations on performance of Sharia banks. Borsa Istanbul Review, 19(1), 49-64.

Alfahad, A., & Quttainah, M. (2018). Entrepreneurial change in social responsibility. International Journal of Applied Business and International Management, 3(1), 95-110.

Alsbaity, M. A. (2018). Stakeholders theory and its effects on organization’s technological change. International Journal of Accounting & Finance in Asia Pasific, 1(1), 1-33.

Alsmadi, I., & Zarour, M. (2015). Building an Islamic financial information system based on policy managements. Journal of King Saud University - Computer and Information Sciences, 27(4), 364-375.

Asadov, A., Muhamad S. Z. B., Ramadilli, S. M., Anwer, Z., & Shamsudheen, S. V. (2018). Musharakah mutanaqisah home financing: Issues in practice. Journal of Islamic Accounting and Business Research, 9(1), 91-103.

Asian Institute of Finance (AIF). (2013). Musharakah Mutanaqisah Home Financing. Asian Institute of Finance (AIF), 3.

Bangsawan, S. E. B., Dewi, F. G., Ambya, A. D., Farichah, S. E., Erlina, R. R., Ketua, W., ... & Kesekretariatan, S. (2018). Proceedings of Seminar Nasional dan Call For Paper 2018 Fakultas Ekonomi dan Bisnis Universitas Lampung.

Buallay, A. (2019). Corporate governance, sharia’ah governance and performance: A cross-country comparison in MENA region. International Journal of Islamic and Middle Eastern Finance and Management, 12(2), 216-235.

Buku standar produk perbankan syariah musyarakah dan musyarakah mutanaqishah. (2016). Divisi Pengembangan Produk dan Edukasi, OJK.

Eam, L. H., Yusof, R. M., & Khan, S. J. M. (2019). Musharakah mutanaqisah (MM) home financing for affordability of homeownership: A simulation case study approach. Planning Malaysia Journal, 17(9).

El-Ghattis, N. (2011). Sharia banking’s role in economic development: Future outlook. Centre of Islamic Finance, Bahrain Institute of Banking.

Frey, L., Botan, C. H., & Kreps, G. (2000). Investigating communication. NY: Allyn & Bacon.

Hanudin, A. (2014). Consumer acceptance of Islamic home financing. International Journal of Housing Markets and Analysis, 7(3), 307-332.

Idris, S. M. (2018). Syariah risk in musyarakah mutanaqisah home financing contract in Malaysia. International Journal of Academic Research in Business and Social Sciences, 8(5), 888-897.

Mahfudz, A. A., Ahmad, N. H., Yusoff, R. M., Naim, A. M., & Ali, T. (2016). Restructuring rental rate components to be more innovative sharia compliance product in Islamic home financing. European Journal of Islamic Finance, 5, 1-7. doi:10.13135/2421-2172/1747.

Meera, A. K. M., & Razak, D. A. (2009). Home financing through the musharakah mutanaqisah contracts: Some practical issues. Journal of King Abdulaziz University, Islamic Economics, 22(1), 121-143.

Mohd, Y. R. B. (2016). Rental index rate as an alternative to interest rate in musharakah mutanaqisah home financing. International Journal of Islamic and Middle Eastern Finance and Management, 9(3), 397-416.

Murniati, S., Mus, H. A. R., Semmaila, H. B., & Nur, H. A. N. (2019). Effect of investment decisions, financing decisions and dividend policy on profitability and value of the firm. International Journal of Accounting & Finance in Asia Pasific, 2(1), 1-10.

Nasim, A., & Mediawati, E. (2019). Critical study the application of the principle of profit sharing in syirkah mudharabah and musyarakah in sharia banking. KnE Social Sciences, 1351-1359.

Norbaizurah, A. J. (2018). Understanding the mushārakah mutanāqiṣah of Koperasi Pembiayaan Syariah Angkasa (KOPSYA). ISRA International Journal of Islamic Finance, 10(1), 62-77.

Otoritas Jasa Keuangan (OJK). (2016a). Musyarakah Mutanaqishah. In Standar Musyarakah dan Musyarakah Mutanaqishah. Divisi Pengembangan OJK.

Otoritas Jasa Keuangan (OJK). (2016b). Standar Musyarakah dan Musyarakah Mutanaqishah. Divisi Pengembangan OJK.

Salehuddin, S., & Saiti, B. (2016). Musharakah tijarah cross-border financing: Concept, structure and salient features. Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi, 2(3), 1-26.

Salman, A., & Nawaz, H. (2018). Islamic financial system and conventional banking: A comparison. Arab Economic and Business Journal, 13(2), 155-167.

Shari'ah standard. (2008). Manama: Accounting and Auditing Organizations for Islamic Financial Institutions.

Subky, K. H. M., Liu, R., Abdullah, M. M., Mokhtar, Z., & Faizrakhman, A. (2017). The implication of musharakah mutanaqisah in Malaysian sharia banking arena: A perspective on legal documentation. International Journal Of Management and Applied Research, 4(1), 17-30.

Sunarsih, N. M., Dewi, N. P.S., & Kirena, M. N. N. A. (2019). Analysis of factors effecting the firm value factors that effect the firm value. International Journal of Applied Business and International Management, 4(3), 94-103.

Solihin, D., & Suarsa, A. (2019). Bentuk Pembiayaan Musyarakah Mutanaqishah di Lembaga Keuangan Syariah. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 3(1), 142-170.

Syabiq. (2000). Fiqh al-sunnah (Vol. III). Dar al-Fath al-A‟lami al-Arobi.

Trad, N., Trabelsi, M. A., & Goux, J. F. (2017). Risk and profitability of Sharia banks: A religious deception or an alternative solution? European Research on Management and Business Economics. https://doi.org/10.1016/j.iedeen.2016.09.001

Türsoy, T. (2018). Risk management process in banking industry. Munich: University Library of Munich.

Wen, N. Y., Kee, D. M. H., Ling, K. W., Xuang, N. S., Kai, Yoing., & Alfertaj, E. (2019). Analyze One Issue Faced by The Company and Then Provide Relevant Solution. Asia Pacific Journal of Management and Education (APJME), 2(3), 45-54.




DOI: https://doi.org/10.32535/ijabim.v5i3.980

Refbacks

  • There are currently no refbacks.


Copyright (c) 2020 Ivan Rahmat Santoso, Molbi Harsanto, Ismet Sulila, Agil Bahsoan

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Flag Counter

Published by: 

AIBPM Publisher

Editorial Office:

JL. Kahuripan No. 9 Hotel Sahid Montana, Malang, Indonesia
Phone: +62 341 366222
Email: journal.ijabim@gmail.com
Website: http://ejournal.aibpmjournals.com/index.php/IJABIM

Supported by: Association of International Business & Professional Management 

If you are interested to get the journal subscription you can contact us at admin@aibpm.org.

ISSN 2614-7432 (Print)
ISSN 2621-2862 (Online)

DOI: Prefix 10.32535 by CrossREF

International Journal of Applied Business and International Management (IJABIM) INDEXED:

    

    

     

In Process

   

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.