Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.713882
Title: Facilitating the growth of Islamic banking law and Islamic banking in Indonesia : new laws and new challenges
Author: Yuspin, Wardah
Awarding Body: University of Leeds
Current Institution: University of Leeds
Date of Award: 2014
Availability of Full Text:
Full text unavailable from EThOS. Thesis embargoed until 01 Jan 2018
Abstract:
The growth of Islamic banking and financial services (IBF) industry has generated considerable interest in the financial world in recent decades with no exception in Indonesia. The legal infrastructure for the development of IBF in Indonesia has been strengthened with the enactment of Islamic Banking Law No. 21 of 2008. The law includes two new arrangements that are expected to bring about changes in the IBF industry; namely Articles 55 and 68. In light of those articles, it is also essential to observe the development and practice of this industry in selected countries; namely Malaysia and Pakistan. Despite the difference of their legal systems (the practice of the Common Law Systems there as opposed to the Civil Law System in Indonesia), these two countries have been chosen for the resemblance of their IBF industry with the one developed, practiced and offered in. Indonesia. Particularly in Malaysia, the promulgation of the Central Bank Act 2009 and the Islamic Financial Services Act 2013 were aimed at enhancing its legal infrastructure that will not only protect its IBF industry but will ensure stability, growth and confidence of all players and stakeholders. Substantively, Article 68 deals with the Islamic window/ Islamic unit separation. It is quite natural to conclude that Window Model serves only as a transitory mechanism. Therefore, that model is mandated and/or limited to be a mere spun-off or temporary structure for IBF institutions from their parent banks before subsequently becoming a full-fledged institutions. Since this is mandatory, any Islamic window that violates this provision will be fined, or further, their licence will be revoked. Meanwhile in those particular countries this model is still allowed and can be adopted by conventional banks offering IBF services. However, the conventional banks will only be allowed to, offer IBF services once they have demonstrated their serious commitment to IBF and have a clear roadmap towards full conversion of their operations into a full fledged Islamic bank. Whilst Article 55 (1) affirms that the religious court is the institution authorised to settle dispute on matters concerning Islam and the economy, Article 55 (2), nonetheless, provides that if the litigants are in agreement, they can choose to refuse submission to the jurisdiction of the religious court jurisdiction and alternatively choose another forum such as district court to adjudicate the dispute. The selection and submission to another forum, such as the district court, can potentially bring about a conflict of authority and jurisdictions between the district courts and the religious courts. However, according to the decision of the Constitutional Court No.93PUU-X/2012 the Islamic financial disputes fall under the absolute competence of the religious court. While in those selected countries, the Islamic disputes are tried and heard before the jurisdiction of their civil courts, despite the fact that there is a designated civil court in Malaysia that will handle disputes relating to IBF. That choice of forum to render decision on this dispute raises the problem, since many judges who render decision on this case are in favour of the civil law rather than Shari'a (Islamic law). While the Islamic disputes are not merely commercial disputes but involves the questions of Shari matter(s). In this regards, a closer scrutiny on the Malaysian Central Bank Act 2009 will be useful since it provides for reference to the Shari'ah Advisory Council by the courts or arbitrators adjudicating matters relating to IBF disputes. With the rapid advancement of IBF industry and various products and services it offers, disputes are then inevitable. Premised on this realization, this thesis strongly examines and advocates that a proper and strong legal framework and infrastructure as well as substantial support of the legal fraternity are crucial prerequisites for a healthy advancement and significant growth of IBF industry. Therefore with the inclusion the Art 68 and 55 of the Islamic Banking Law, this industry is seen moved towards this advancement.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.713882  DOI: Not available
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