Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)


The Influence of Islamic Law and Economic Principles on Banking Industry in Indonesia

Author(s): Muhamad Arifin

The purpose of this study is to explore the influence of Islamic law and economics principles on the Indonesian banking industry in accordance with the continuous growth of Sharia law. This is a normative legal research comprising the statute and conceptual approaches. Secondary data were obtained from primary, secondary, and tertiary legal materials, such as books, journals, and other relevant sources. The results showed a gradual transformation in Islamic banking based on Sharia law and economics principles to achieve its current structure in Indonesia. It also provides insights towards a better future by establishing Islamic banks for the Muslim market based on the facets of their economic life on the Qur'an and Al-Sunnah. The rapid growth of the economy makes it necessary for the government to implement new laws guiding Islamic-based financial institutions. This research also indicated the gaps and highlighted the areas needed to improve Indonesian law for banks to achieve an adequate Sharia-based banking governance system. Further studies need to be conducted using other sources of data.

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