The Development of Murabaha in Indonesian Islamic Banks

Over the last few years, Islamic trading transaction has become more popular in Indonesia. Islamic banks for an example. There are many Islamic banks in Indonesia that transactions and halal product in retail trade to the public based on Islamic law, but Islamic banks must obey not only the origins of Islamic law, such as the Holy the prohibition of uncertainty, interest and gambling when they run their business in retail trade. One of the agreements in retail trade is Murabaha which involve company (seller) purchases via an agent or a third party and murabaha via the customer as an Agent. However, there are several contemporary issues, particularly still need to be discussed whether they disobey Islamic law and basic Islamic principles or not.


Introduction
One of the factors influencing a has a high trade business activity, the economy of the country would also rise.Likewise, its growth would slow when it does not have a sustainable trade business activities the trading business would affect the growth of a country's economy.Over the last few years, Islamic trading transaction has become more popular in Indonesia.
an example.There are many Islamic banks in Indonesia that provide alternative business transactions and halal product in retail trade to the public based on Islamic law, but Islamic banks must obey not only the origins of Islamic law, such as the Holy Qur'an and the Sunnah but also Islamic principle in terms of the prohibition of uncertainty, interest and gambling when they run their business in retail trade.One of the in retail trade is Murabaha which involves several possible structures, notably direct trading, company (seller) purchases via an agent or a third party and murabaha via the customer as an Agent.However, there are several contemporary issues, particularly Murabaha via Shares and executing time of Murabaha that e discussed whether they disobey Islamic law and basic Islamic principles or not.s in Indonesia; riba; islamic law; finance law.Kurniawan, A., & Shomad, A. (2016).The Development of Murabaha in Indonesian http://dx.doi.org/10.21070/jihr.v3i1.153 Transaksi perdagangan Islam telah menjadi lebih populer di Indonesia dalam beberapa tahun terakhir.Sebagai contoh bisnis perbankan syariah dalam perdagangan retail.Ada banyak bank syariah di Indonesia yang menyediakan transaksi bisnis alternatif dan produk halal dalam perdagangan retail kepada masyarakat namun bank-bank Islam harus mematuhi tidak hanya sumber hukum Islam Al Qur'an dan Sunnah tetapi juga prinsip-prinsip hukum Islam dalam hal riba, gharar dan maysir ketika mereka menjalankan bisnisnya dalam perdagangan retail.Salah satu bentuk perjanjian dalam perdagangan , yang memiliki beberapa kemungkinan bentuk perdagangan retail, yakni perdagangan pembelian melalui agen atau pihak ketiga dan murabaha melalui pelanggan ada beberapa isu-isu terkini, khususnya pembelian saham dengan murabah yang masih perlu dibahas apakah mereka melanggar hukum Islam dan prinsip Islam di Indonesia; riba; hukum islam; hukum pembiayaan.
s influencing a country's economic increase is trading.Once a state has a high trade business activity, the economy of the country would also rise.Likewise, its growth would slow when it does not have a sustainable trade business activities the trading business would affect the growth of a country's economy.In addition, __ 1 open Surabaya, East Over the last few years, Islamic trading transaction has become more popular in Indonesia.Retail trade in alternative business transactions and halal product in retail trade to the public based on Islamic law, but Islamic banks must obey not Qur'an and the Sunnah but also Islamic principle in terms of the prohibition of uncertainty, interest and gambling when they run their business in retail trade.One of the notably direct trading, company (seller) purchases via an agent or a third party and murabaha via the customer as an Agent.However, and executing time of Murabaha that   Kurniawan, A., & Shomad, A. (2016).The Development of Murabaha in Indonesian Islamic Transaksi perdagangan Islam telah menjadi lebih populer di Indonesia dalam beberapa tahun terakhir.Sebagai contoh bisnis perbankan syariah dalam perdagangan retail.Ada banyak bank syariah di Indonesia yang kepada masyarakat bank Islam harus mematuhi tidak hanya sumber hukum Islam, seperti prinsip hukum Islam dalam hal riba, gharar dan maysir ketika Salah satu bentuk perjanjian dalam perdagangan , yakni perdagangan melalui pelanggan pembelian saham dengan murabaha dan waktu yang masih perlu dibahas apakah mereka melanggar hukum Islam dan prinsip-prinsip ; hukum islam; hukum pembiayaan. is trading.Once a state has a high trade business activity, the economy of the country would also rise.Likewise, its growth would slow when it does not have a sustainable trade business activities; therefore, In addition, Islamic __ 2 trading transaction in Indonesia has increased significantly.business of Islamic banks in retail trade in Indonesia.
Indonesia that provide an alternative business transaction the public based on Islamic law.
Moslem, Islamic banks have a big opportunity for on Islamic law.
The business of Islamic finance is not similar to conventional finance regarding the basic principles and the origins of Islamic law.One of the differences is Islamic banks offer interest-free banking whereas conventional banks Islamic law that comes from not only the Holy Qur'an but also Sunnah as primary origins and several secondary and dependent sources that obtain the value Qur'an but also the Sunnah, notably ijma and ijtihad.In addition, they must also comply with Islamic principles in terms of the prohibition of uncertainty, interest and gambling when they run their business in retail trade.
One of the agreements in retail tra in which the seller sells a good by asserting the purchase price to the buyer and the buyer pays for it with more price as a profit parties might be run either via the customer structures of Murabaha in retail trade might involve Direct Trading, Company (seller) Purchases via an agent or a third party and Murabaha via the customer as an Agent.
There are several contemporary issues and the practice of Islamic finance in Indonesia reg Shares.This issue arises once it would be " time of Murabaha, particularly whether Islamic bank could put the goods up for sale legally to its customer or not.However, these several issues still need to be discussed whether they disobey Islamic law or not, but Islamic bank must comply with Islami the prohibition of Gharar, Riba and Maysir.

Islamic Jurisprudence
The primary origins of Islamic Jurisprudence come Sunnah.Firstly, it is from The Holy Qur'an.It provides the key text upon that the Sharia is founded.In other words, it is the Prophet Muhammad Revelations, that came from Allah 1 National Sharia Board of Indonesia, Sharia Board NO: 04/DSN-MUI/ IV/2000, 2000).Islamic law that comes from not only the Holy Qur'an but also Sunnah as primary origins and several secondary and dependent sources that obtain the value of not only the Holy n but also the Sunnah, notably ijma and ijtihad.In addition, they must also comply with in terms of the prohibition of uncertainty, interest and gambling when they run their business in retail trade.
in retail trade is Murabaha that is a sale and purchase contract in which the seller sells a good by asserting the purchase price to the buyer and the buyer pays for it with more price as a profit 1 .The trading activities which are conducted by the either via the customer as agent or via a third party agency.This possible structures of Murabaha in retail trade might involve Direct Trading, Company (seller) Purchases via an agent or a third party and Murabaha via the customer as an Agent.
several contemporary issues that affect the differences between the theory and the practice of Islamic finance in Indonesia regarding murabaha contract.Murabaha via   This issue arises once it would be "buyback".The second issue relates to executin time of Murabaha, particularly whether Islamic bank could put the goods up for sale legally However, these several issues still need to be discussed whether they disobey Islamic law or not, but Islamic bank must comply with Islamic principles in terms of the prohibition of Gharar, Riba and Maysir.
The primary origins of Islamic Jurisprudence come from the Holy Qur'an and Qur'an but also Sunnah is the main and independent origins of religious beliefs.The Qur'an would take priority over the Sunnah Sunnah for legal guidance merely if there is no obvious directive could be gained from the Holy Qur'an 8 .Furthermore, there are several the secondary and dependent sources that obtain the value from not only the Holy Qur'an but also the Sunnah.They are involve qiyas as the secondary of Islamic Jurisprudence

Basic Terms of Islamic Law
Islamic Jurisprudence does not recognize commercial transactions which have illegal aspects.Islamic principle has categorized several features that are to be avoided in business transactions, notably Riba, Gharar and g these elements, it would be void and null contract.Therefore, Islamic contract must avoid them to be legal and valid contract due to Sharia compliance.

Riba prohibition
Riba is expansion, increase, prohibit every increase 11 .The base of prohibition is accordance with the manner via which an increase is obtained 12 .Furthermore, riba defines an excessive payment that has to be paid by borrower to the lender as a condition for the loan from the loan that given to the borrower.At the very beginning, it is to be noted that there is a similarity of Moslems view regarding the Riba prohibition.
The Holy Qur'an definitely prohibit Riba.several displeasure indications against Riba prohibition prior to the "Uhad" battle in the year 3 AH passing away of the Holy Prophet, Riba is prohibited finally and repeatedly in the year 10 AH 16 .The Holy Qur'an (not only al 130 and al-Rum: 39) prohibits Riba strictly.
In addition, numerous traditions of the following holy Prophet ( prohibition of Riba.One of them is Zaid B. Aslam this nature: "a person lends fund or money to period expired, the lender will ask: well, otherwise the lender added the loan and extended the time

Gharar prohibition
Gharar is uncertainty, hazard, or risk of clarity regarding the goods, or the price or the time of delivery example would be the sale of a fish in water.It has no cost for the fish or would pay the cost for servi fish, people do not recognize how many fish in the water.Islam prohibits a sale or any other business that contains Gharar element.It contains Gharar if the liability of any parties to a contract is uncertainty or the price of goods is uncertainty.However, as the lack of agreement Furthermore, riba defines an excessive payment that has to be paid by nder as a condition for the loan 13 .So the lender would gain the addition from the loan that given to the borrower.At the very beginning, it is to be noted that there is a similarity of Moslems view regarding the Riba prohibition.Furthermore, the main sou Islamic jurisprudence strongly prohibid Riba.
definitely prohibit Riba.In the Makkah period, the people several displeasure indications against Riba 14 .However, Islam imposed the express prohibition prior to the "Uhad" battle in the year 3 AH 15 .Around two weeks before the passing away of the Holy Prophet, Riba is prohibited finally and repeatedly in the year 10 (not only al-Nisa: 161 and al-Baqarah: 275-281; but also al 39) prohibits Riba strictly.
traditions of the following holy Prophet (PBUH) revealed the prohibition of Riba.One of them is Zaid B. Aslam 17 described that interest in time fund or money to other people for a particular time period expired, the lender will ask: 'you repay extra to me', once he made payment, it was well, otherwise the lender added the loan and extended the time for repayment".
Gharar is uncertainty, hazard, or risk 18 .In other words, Gharar is a thing that has lack of clarity regarding the goods, or the price or the time of delivery on a contract fish in water.It has no clarity whether people would cost for the fish or would pay the cost for service.Furthermore, if people pay the cost for the not recognize how many fish in the water.Islam prohibits a sale or any other iness that contains Gharar element.It contains Gharar if the liability of any parties to a contract is uncertainty or the price of goods is uncertainty.However, as the lack of agreement on the part of Moslem jurists as to precisely what does and does not constitute Gharar it whether any given transaction involving it is permissible or not, Fathul Bari, Sharah of Sahih Al Bukhari, 8th ed.(Makkah, 1981) Furthermore, riba defines an excessive payment that has to be paid by So the lender would gain the addition from the loan that given to the borrower.At the very beginning, it is to be noted that there is a Furthermore, the main sources of , the people provided However, Islam imposed the express Around two weeks before the passing away of the Holy Prophet, Riba is prohibited finally and repeatedly in the year 10 also al-Imran:

Riba and Islamic Banking and Finance (Essential Reading in Islamic Fi
) revealed the that interest in times was of asserted that the acts that were prohibited by religious belief as vanity, notably contracts 24 .
that Gharar is not legal is any risk between the parties that make contract at the beginning and may cause a loss for one party and profit for the other.Risk due to uncertainty between the parties might generate unfair and unbalanced profit or loss.It is whether the way that profit of loss is achieved is unfair or unbalanced.
Malikies Mahdzab, the principles covering Gharar have been Dhareer 25 who is a contemporary scholar through the following Gharar in the conditions and substance of the agreement involves 26 : Gharar in the object of the agreement involves 27 : The object of unidentified identity genus Bayan Fi Ta'wil Al-Qur'an, 3rd ed. 2. There are things that exist.However, the seller does not have the possession of those things.

Gharar in Contracts and Its Effects on Contemporary
3. There are things that exist.However, they are exchanged on the basis of uncertain payment and delivery.
The general principles could be implemented contract must be certain regarding the subject matter, price and time of delivery must be defined clearly with proper description in obligation of the parties that are co contract.The availability, deliverability and existence of the commodity should be known by the parties. 29

Maysir prohibition
The The object of unidentified species

Ignorance about the time of payment in deferred transactions
Inability to deliver the item Agreement on a nonexistent item Furthermore, Islamic Jurisprudence forbids the power to sell to prevent uncertainty under the following three circumstances 28 .
There are no things as the object of legal transaction.In other words, it does not exist.
There are things that exist.However, the seller does not have the possession of those things that exist.However, they are exchanged on the basis of uncertain The general principles could be implemented to avoid Gharar.One of them is the contract must be certain regarding the subject matter, price and time of delivery must be defined clearly with proper description in the contract.Furthermore, the rights and obligation of the parties that are concerned must be determined and defined clearly in The availability, deliverability and existence of the commodity should be known by The Holy Qur'an prohibits maysir that is gambling.where the member, notably the gamblers earn money using their s gambling convey their traditional act because a difference from the common might be against the marketplace gambling is the hope of becoming rich quickly ways to getting rich based on speculation.If people win a lottery, they will become rich.If they lose a lottery, they might be disappointed, Jurisprudence forbids gambling or

Brief Definition of Murabaha
One of the contracts form in Islamic sale and purchase contract which has the nature of trust on specific goods is the purchase price plus the profit which the parties can make a bargain profit margins other words, it is one of the form of particular purchase contract when the seller to provide information to buyers about the cost of acquisition o the goods and the profit 38 .According to a sale and purchase contract in whi the buyer and the buyer pays for it with the item that is needed by customer and then bank sells this to the client with the purchase price plus the profit, but the transactions must be valid and avoid riba,

Definition of Murabaha
form in Islamic finance is Murabaha.Regarding the fiqh, it is a sale and purchase contract which has the nature of trust on specific goods 36 .Ayub is the purchase price plus the profit which the parties can make a bargain profit margins other words, it is one of the form of particular purchase contract when the seller to provide information to buyers about the cost of acquisition of goods, including the purchase price of According to Fatwah Of National Sharia Board of Indonesia a sale and purchase contract in which the seller sells a good by asserting the purchase price for it with more price as a profit.In other words, bank purchases the item that is needed by customer and then bank sells this to the client with the purchase price plus the profit, but the transactions must be valid and avoid riba, gharar and In addition, Surah Al-Ma'idah contracts".

Possible structures of the practice of Murabaha in Indonesia.
Particular expertise might be required by trading and other real sector business activities.The firms might purchase goods and assets and sell them to their clients, specifically on the base of deferred payment conducted by the parties might be run either via the customer agency.This possible structures of Murabaha involve

Direct Trading
The most ideal possibility is direct trading basics.However, there might be several difficulties in retail trading business 40

Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is becau 'Trade is [just] like interest'. But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in
those are the companions of the Fire; they will abide eternally (5): 1 describes "O you who have believed, fulfill [all]   the practice of Murabaha in Indonesia.
Particular expertise might be required by trading and other real sector business activities.The firms might purchase goods and assets and sell them to their clients, specifically on the base of deferred payment.Therefore, the trading activities which conducted by the parties might be run either via the customer as agent or via a third party This possible structures of Murabaha involve 42 : The most ideal possibility is direct trading concerning the fulfilment of the Murabaha basics.However, there might be several difficulties in retail trading business, specifically for  .One of them is the managerial difficulties and the possibility of corruption d be addressed via the introduction of effective internal controls Purchases via an agent or a third party Another possibility is through an agent to retain inventory or to obtain or buy items which relates to customers' requests for Murabaha business 44 .It is likely to meet the Islamic principle of taking possession and commercial hazard by the bank or company for the period from the trader or merchant and their transaction to the customer The client could not guarantee the transportation risk of the commodities if it is directly delivered by a third party to the seller as the goods safety of Murabaha via the customer as an Agent.
s structure is one of the safe way for company (seller) to prevent commodity threats and related difficulties.The client ought to describe to the supplier or trader about However, the trading structure via a customer as Agent is likely to ion a back door to interest, hence, there is a need extra care to maintain it relating to Islamic principle 48 .
in banking finance transaction must obey Islamic principle in terms of the prohibition of Maysir or gambling, Gharar or uncertainty and Riba or interest.The majority of scholars, Kettel and Ayub believed that Islamic contract must avoid them in current business transaction, notably murabaha contract.However, uncertainty can be allowable when among the Moslem jurists have no broad consensus or contract that are prohibited and the contract that involves uncertainty is not valid 49 .When one Moslem scholar or school allows this with or without circumstances, then this is considered as allowable According to the AAOIFI standard, the option of a third party agent is better: it recommends that the customer should not be appointed to act as agent for purchase of items for Murabaha except in situations of dire need .
Organization for Islamic Financial Institutions (AAOIFI) Standard .Understanding Islamic Finance.

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) St
Understanding Islamic Finance.p. 222.Sa'aati, "The Permissible Gharar (Risk) in Classical Islamic Jurisprudence." or school allows this with or without circumstances, then this is considered as allowable According to the AAOIFI standard, the option of a third party agent is better: it recommends that the customer should not be appointed to act as agent for purchase of items for Murabaha except in situations of dire need .
Organization for Islamic Financial Institutions (AAOIFI) Standard (Bahrain, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Standard.

__ 10
It is true that interest, gambling and uncertainty are prohibited by the theory of Islamic Jurisprudence.However, the practice the theory, notably murabaha contract in house financing finance has to purchase a house purchases the item that is needed by customer and then bank sells this to the client with the purchase price plus the profit, but the transactions must be valid and avoid riba, gharar and should wait for tangible transfer because it price risk 51 .Shares Murabaha would be "buy sister matter or concern of the customer.Therefore, although it is allowable require to be more careful regarding the concerns of Islamic compliance In addition, the second whether Islamic bank could put the goods up for sale legally to its customer or not because the theory that is advised by most scholar reveals that when Islamic bank execute with the customer, it has to take full possession of the item or the object before putting the object up for sale, but it has no possession and the items does not exist would be a car financing.It might have the difficulties warehouse capabilities to fulfill the terms and prerequisite of murabaha contract once it has to take full possession of the goods before putting the item up for sale.
these difficulties, it should make ag agreement and make a separate offer and acceptance between the customer and Islamic financial intermediary institutions should wait for tangible transfer because it takes mostly several days, so they have to take the baha would be "buy-back" that is prohibited once it is sister matter or concern of the customer.Therefore, although it is allowable require to be more careful regarding the concerns of Islamic compliance 52 .
the second issues relates to executing time of Murabaha, particularly put the goods up for sale legally to its customer or not because he theory that is advised by most scholar reveals that when Islamic bank execute with the customer, it has to take full possession of the item or the object before putting the object up for sale, but it has no possession and the items does not exist 53 .A good example t might have the difficulties regarding the risks and a lack of warehouse capabilities to fulfill the terms and prerequisite of murabaha contract once it has to take full possession of the goods before putting the item up for sale.However, difficulties, it should make agency contract as a part and package of Murabaha agreement and make a separate offer and acceptance between the customer and Islamic financial intermediary institutions 54 .
c Finance.The bank as a seller sells the car to the client, and the Gambling and Speculation A Theory, a History, and a Future of Some Human Decisions.pp.90-client buys a car from the Islamic bank.The car is not from lottery.Furthermore, car financing does not have specula information about the car that is purchased.
In addition, according to Venardos the transaction fulfills the circumstances because the existence of the real 60 .The buyers could recognize the characteristic of the car, so they could inspect the car before buying it.Moreover, to the car must be halal.
Besides, according to the basic regulation of the central bank and Sharia Supervisory Board (Majelis regulations.Some of them are the Islamic Banking Law of Sharia Supervisory Board 63 .Furthermore, Sharia Supervisory Board has supervised this product to obey Islamic principle regarding Moslem jurists have pointed out the obvious identification of the object contract and delivery to the buyer definitely.In order to be a valid sale, Islamic finance need a several number of terms and circumstances regarding the object contract.One of the must exist and the seller must own things that be sold.The seller who does not have the possession of things cannot sell.For instance, once Islamic bank would like to sell a car that is currently owned by the car dealer to customer.Howe would purchase this from a car dealer and deliver it to customer subsequently, the contract would be invalid and void regarding the promise to sell it to customer 64 .It is related to conditions which take possession of the commodities prior to their trade.According to Imam Bukhari: " randomly in the life time of the Prophet.Once they attempted to trade it prior to owning they were penalized". 65According to the commentary of Qastalani on Sahih Bukhari states that prior to owning the commodities by the seller, the sale is unlawful regarding client buys a car from the Islamic bank.The car is not from lottery.Furthermore, car financing does not have speculation as the client or the buyer would obtain certain about the car that is purchased.
In addition, according to Venardos about minor uncertainty in the previous subtopic, the transaction fulfills the circumstances because the existence of the car that is purchased is The buyers could recognize the characteristic of the car, so they could inspect the car obtain valid transaction that comply with Islamic principle, o the basic regulation of the murabaha contract in Indonesia, central bank and Sharia Supervisory Board (Majelis Ulama Indonesia-MUI) issued regulations.Some of them are the Islamic Banking Law 61 , Central Bank regulation .Furthermore, Sharia Supervisory Board has supervised this obey Islamic principle regarding fatwah of Murabaha.
Moslem jurists have pointed out the obvious identification of the object contract and delivery to the buyer definitely.In order to be a valid sale, Islamic finance need a several number of terms and circumstances regarding the object contract.One of them is the object must exist and the seller must own things that be sold.The seller who does not have the sell.For instance, once Islamic bank would like to sell a car that is currently owned by the car dealer to customer.However, it is hopeful that Islamic finance would purchase this from a car dealer and deliver it to customer subsequently, the contract would be invalid and void regarding the Sharia.At most, Islamic finance could make a related to conditions which take possession of the commodities prior to their trade.According to Imam Bukhari: "Ibn Umar described " I saw the people purchase food randomly in the life time of the Prophet.Once they attempted to trade it prior to owning According to the commentary of Qastalani on Sahih Bukhari states that prior to owning the commodities by the seller, the sale is unlawful regarding Moslem jurists have pointed out the obvious identification of the object contract and delivery to the buyer definitely.In order to be a valid sale, Islamic finance need a several m is the object must exist and the seller must own things that be sold.The seller who does not have the sell.For instance, once Islamic bank would like to sell a car that ver, it is hopeful that Islamic finance would purchase this from a car dealer and deliver it to customer subsequently, the contract .At most, Islamic finance could make a related to conditions which take possession of the commodities prior to their Ibn Umar described " I saw the people purchase food randomly in the life time of the Prophet.Once they attempted to trade it prior to owning it, According to the commentary of Qastalani on Sahih Bukhari states that prior to owning the commodities by the seller, the sale is unlawful regarding Number 21: SG No. 94, 2008).
object of unidentified species d.Ignorance about the time of payment in deferred transactions e. Inability to deliver the item f.Agreement on a nonexistent item g. the item could not be seen Furthermore, Islamic Jurisprudence forbids the power to sell under the following three circumstances 1.There are no things as the object of legal transaction.In other words, it does not exist.
to obtain or buy items It is likely to meet the Islamic principle of taking possession and commercial hazard by the bank or company for the period from the trader or merchant and their transaction to the customer The client could not guarantee the transportation risk of the commodities if it he seller as the goods safety of the owner way for company (seller) to prevent commodity-based the supplier or trader about However, the trading structure via a customer as Agent is likely to hence, there is a need extra care to must obey Islamic principle in terms of the prohibition of Maysir or gambling, Gharar or uncertainty and Riba or interest.The majority of scholars, Kettel and Ayub believed that Islamic contract must avoid them in uncertainty can be allowable when among the Moslem jurists have no broad consensus or contract that are When one Moslem scholar maysir.In contrast, Islamic finance might not have and purchase One of the alternative contracts that is implemented by Islamic bank for house financing is Murabaha.There are several contemporary issues between the theory and the practice of Islamic finance in Indonesia reg contract in house financing.One of the issues is Murabaha via Shares.It has been conducted by several Sharia banks.Payment should be directly made by Islamic banks to the brokers and agent should not appoint the client for buying banks could sell them onward on a basis of Murabaha, Gambling and Speculation A Theory, a History, and a Future of Some Human Decisions __ 11 Islamic law in terms of uncertainty, though Islamic bank has not purchased a car or product, it does not disobey Islamic principle because its business does not include uncertainty, gambling and interest.In addition, the practice of contract between Islamic bank and the client in car financing does not include excessive Gharar regarding the prohibition of uncertainty.It is because the items Saati, the commercial transaction that There is no risk in car financing as the e done by identifying the car, so the buyer could recognize the type and quality of purchased car.Prior to entering into murabaha contract, Islamic finance would ask a client or borrower to not only make a specification of this to ensure the desire car purchase this in a car dealer where a client would like to purchase.A client would gain clear and certain of the car and the time of car delivery from the automotive dealer or the broker.Therefore, with regards to certain car, time of delivery, and price, the because Islamic bank does According to Bakar, contract, the position he positions or the relationship between the Islamic bank and the client are the seller and the buyer.Islamic bank sells a car to the buyer (the client).The client who is the buyer would not pay interest to Islamic Bank.Therefore, the car contract does not include Maysir.It is because the car financing s.According to Samuelson, it reflects they do speculation and gambling Rechtsidee, 3 (1), P. ISSN.2338-8595, E. ISSN.2443 Journal Homepage: http://ojs.umsida.ac.id/index.php/rechtsideeDOI Link: http://dx.doi.org/10.21070/jihr.v3i1.153trading transaction in Indonesia has increased significantly.A good example would be the in retail trade in Indonesia.There are many Islamic banks in ternative business transaction and halal product in retail trade based on Islamic law.Due to the fact that the majority of the population a big opportunity for running a retail trade in Indonesia Islamic finance is not similar to conventional finance regarding the basic principles and the origins of Islamic law.One of the differences is Islamic banks offer banking whereas conventional banks offer interest.Islamic banks Jurisprudence ideologically and historicallyJurisprudence comes from the Sunnah.It defines literally " religious beliefs, it conveys all the saying and acts of the Prophet Muhammad he commended.It is defined as hadith that literally refers to a "history" or "communication However, in this perspective, it is recognized to define particularly a description of the Prophet Muhammad life and conduc Companions the Prophet Muhammad.It was merely put in text after several substantial period had passed since the death of the Prophet Muhammad . Firstly, it is from The Holy Qur'an.It provides the key text upon that the Sharia is founded.In other words, it is the Prophet Muhammad Revelations, that came from Allah National Sharia Board of Indonesia, DSN No.04/DSN-MUI/IV/2000 Tentang Murabaha (Fatwah of National MUI/IV/2000, 2000).View Item.n but also the Sunnah, notably ijma and ijtihad.In addition, they must also comply with in terms of the prohibition of uncertainty, interest and gambling when they that is a sale and purchase contract in which the seller sells a good by asserting the purchase price to the buyer and the buyerThe trading activities which are conducted by the agent or via a third party agency.This possible structures of Murabaha in retail trade might involve Direct Trading, Company (seller)Purchases via an agent or a third party and Murabaha via the customer as an Agent.between the theoryMurabaha via.The second issue relates to executing time of Murabaha, particularly whether Islamic bank could put the goods up for sale legally However, these several issues still need to be discussed whether they c principles in terms of from the Holy Qur'an and .Firstly, it is from The Holy Qur'an.It provides the key text upon that the Sharia is founded.In other words, it is the Prophet Muhammad Revelations, that came from Allah (Fatwah of National

Murabaha in Indonesian Islamic Banks
on the part of Moslem jurists as to precisely what does and d creates uncertainty as to whether 11 Mohd.Daud Bakar, Riba and Islamic Banking and Finance (Essential Reading in Islamic Fi (Malaysia: Centre For Research and Training (CERT) Publication, 2008)., 3 (1), P. ISSN.2338-8595, E. ISSN.2443 Journal Homepage: http://ojs.umsida.ac.id/index.php/rechtsideeDOI Link: http://dx.doi.org/10.21070/jihr.v3i1.153 16Ayub, Understanding Islamic Finance 17 Malik Ibn-e-Anas, Muwatta'(English Translation)  1985).p. 427.18Ayub,UnderstandingIslamic Finance 19 Ibid.Rechtsidee . p. 205.Understanding Islamic Finance.p. 44.June 2016, 1-16 8595, E. ISSN.2443-3497 http://ojs.umsida.ac.id/index.php/rechtsideehttp://dx.doi.org/10.21070/jihr.v3i1.153 (English Translation), ed.M. Rahimuddin Sh. and Muhammad A Understanding Islamic Finance.p. 58.), Interpreters of these verses have a consensus which Gharar is vanity 21 .al-batil or vanity is not legal as it is forbidden by Islamic principles, notably Riba and Gharar 22 .Furthermore, Al-Tabari considered vanity as consuming other's good in method that was prohibited by Islamic Law 23 particular time and the e payment, it wasIn other words, Gharar is a thing that has lack a contract19.A good clarity whether people would pay the pay the cost for the not recognize how many fish in the water.Islam prohibits a sale or any other iness that contains Gharar element.It contains Gharar if the liability of any parties to a contract is uncertainty or the price of goods is uncertainty.However, as the lack of agreement constitute Gharar it any given transaction involving it is permissible or not, Riba and Islamic Banking and Finance (Essential Reading in Islamic Finance) (Chichester: John Wiley & Sons, 2007).View Item.p. p. 205., ed.M. Rahimuddin Sh. and Muhammad Ashraf (Lahore, Moslem jurists have different opinions to determine Gharar in any transactions that is accordance with Islamic Jurisprudence.Zamakhsari asserted that the acts that were prohibited by religious belief as vanity, notably theft, gambling and Gharar contracts One of the reasons that Gharar is not legal is any risk between the parties that make contract at the beginning and may cause a loss for one party and profit for the other.Risk due to uncertainty between the parties might generate unfair and unbalanced whether the way that profit of loss is achieved is unfair or unbalanced.24Sa'aati,"ThePermissibleGharar(Risk) in Classi 25 AI Siddiq Mohammad Al Amin AlDharir,  Transaction.(Jeddah:IslamicReseacrhandTrainingSeries, 1997).26Ibid.27Ayub,Understanding Islamic Finance Moslem jurists have different opinions to determine Gharar in any transactions that is Sa'aati, "The Permissible Gharar (Risk)in Classical Islamic Jurisprudence."AI Siddiq Mohammad Al Amin Al Dharir, Al-Gharar in Contracts and Its Effects on Contemporary (Jeddah: Islamic Reseacrh and Training Series, 1997).pp.10-11.View Item.Understanding Islamic Finance.p. 60. __ 5 asserted that the acts that were prohibited by religious belief as vanity, notably that Gharar is not legal is any risk between the parties that make contract at the beginning and may cause a loss for one party and profit for the other.Risk due profit or loss.It is , the principles covering Gharar have been who is a contemporary scholar through the following amic Jurisprudence," Journal of King , 1st ed.(Beirut: Dar al kotob al Ilmiyyah , 1957).pp.41-42.
June 2016, 1-16 8595, E. ISSN.2443-3497 http://ojs.umsida.ac.id/index.php/rechtsideehttp://dx.doi.org/10.21070/jihr.v3i1.153reventuncertaintyThereareno things as the object of legal transaction.In other words, it does not exist.There are things that exist.However, the seller does not have the possession of those things that exist.However, they are exchanged on the basis of uncertain avoid Gharar.One of them is the contract must be certain regarding the subject matter, price and time of delivery.The good If they do not work, they will not have money.Secondly, gambling could cause hate or hatred or hostility for the party who lose.Therefore, it is not accordance with Islamic It condemns gambl would like merely to spread hatred and enmity among you, and delay you from prayer and from the remembrance of Allah SWT" 30 .The holy Qur'an 19 showed that "They ask you about wine and gambli doing and (yet, several) advantage for people.However is greater than their advantage'.And they ask you what they ought to pay.Frank E. Vogel and Samuel L. Hayes, Islamic Law and Finance, 1st ed.(Berlin: Springer, 1998).),contract.Furthermore, the rights and ncerned must be determined and defined clearly in the The availability, deliverability and existence of the commodity should be known by that is gambling.It condemns gambling (maysir), would like merely to spread hatred and enmity among you, and delay The holy Qur'an (al-Maidah , 1st ed.(Berlin: Springer, 1998).p. 87.View work hard.

Murabaha in Indonesian Islamic Banks work
hard.If they do not work, they will not have money.Secondly, gambling could cause hatred or hostility for the party who lose.Therefore, it is not accordance with Islamic 31 , Gambling involves the voluntary idea and intentional risk There are two types of commercial gambling.The chance games, notably casino games, and skill, particularly football games and horse races 32 .The second type, notably skill and chance game is speculation regarding Brenner33.He argued that it is an act where the member, notably the gamblers earn money using their skill.Either speculation or gambling convey their traditional act because a difference from the common might be against the marketplace 34 .Brenner considered the reason they do speculation and gambling is the hope of becoming rich quickly35.Take lottery as an example.It is one of the ways to getting rich based on speculation.If people win a lottery, they will become rich.If n.d.).p. 181.View Item.Adib Bisri Must Lumpur: Darulfikir, 1992).pp.262-263. 37Ayub, Understanding Islamic Finance 38 Ascarya, Akad & Produk Bank Syariah 39 Indonesia, DSN No.04/DSN-MUI/IV/2000 Tentang Murabaha ry, they might be disappointed, hatred or hate.Therefore, Islamic gambling or maysir in any transactions.
If they do not work, they will not have money.Secondly, gambling could cause hatred or hostility for the party who lose.Therefore, it is not accordance with Islamic , Gambling involves the voluntary idea and intentional risk Akad & Produk Bank Syariah, 1st ed.(Jakarta: Rajawali Pers, 2013).pp.81-82.MUI/IV/2000 Tentang Murabaha.__ 7 work hard.

Murabaha in Indonesian Islamic Banks
ISSN. 2338-8595, E. ISSN.2443 Journal Homepage: http://ojs.umsida.ac.id/index.php/rechtsideeDOI Link: http://dx.doi.org/10.21070/jihr.v3i1.153It is true that interest, gambling and uncertainty are prohibited by the theory of Islamic Jurisprudence.However, the practice of Islamic finance in Indonesia is not similar to abaha contract in house financing.This theory shows that Islam finance has to purchase a house earlier before selling it to clients.That is to say, bank s needed by customer and then bank sells this to the client with the purchase price plus the profit, but the transactions must be valid and avoid riba, gharar and In contrast, Islamic finance might not have and purchase a house earlier One of the alternative contracts that is implemented by Islamic bank for house There are several contemporary issues that relates to the between the theory and the practice of Islamic finance in Indonesia regarding One of the issues is Murabaha via Shares.It has been conducted banks.Payment should be directly made by Islamic banks to the brokers and agent should not appoint the client for buying the shares.After this is conducted, banks could sell them onward on a basis of Murabaha, and once the payment takes time, they

Indonesian Islamic Banks inance
However, Islamic finance in Indonesia gambling and interest in Islamic business.bankhasnotpurchaseda car or product, it does not disobey Islamic principle because its business does not include uncertainty, gambling and interest.In addition, the Murabaha in Indonesia implements MPO that is permissible.Firstly, murabaha contract between Islamic bank and the client in car financing does not include excessive Gharar regarding the prohibition of uncertainty.It is because the items or car is certain.According to Maliki school and Al has the object identity could be permissible Gharar buyer (the bank clients) would obtain the clarity of the car.This could b the car, so the buyer could recognize the type and quality of purchased car.Prior to entering into murabaha contract, Islamic finance would ask a client or borrower to not only make a promise to buy a car but also write the model or is bought.Moreover, it might ask a customer to act as a representative to car dealer where a client would like to purchase.A client would gain clear and certain information about the price of the car and the time of car delivery from the automotive dealer or the broker.Therefore, with regards to certain car, time of delivery, and price, the transaction does not consist of Gharar. in Indonesia obeys Islamic law in terms of uncertainty, ing and interest in Islamic business.Car financing as an example, even though Islamic bank has not purchased a car or product, it does not disobey Islamic principle because its business does not include uncertainty, gambling and interest.In addition, the Murabaha in Indonesia implements MPO that is permissible.contractbetweenIslamicbank and the client in car financing does not include excessive Gharar regarding the prohibition of uncertainty.It is because the items r is certain.According to Maliki school and Al-Saati, the commercial transaction that has the object identity could be permissible Gharar 55 .There is no risk in car financing as the buyer (the bank clients) would obtain the clarity of the car.This could be done by identifying the car, so the buyer could recognize the type and quality of purchased car.Prior to entering into murabaha contract, Islamic finance would ask a client or borrower to not only make a promise to buy a car but also write the model or specification of this to ensure the desire car is bought.Moreover, it might ask a customer to act as a representative to purchase car dealer where a client would like to purchase.A client would gain clear and certain of the car and the time of car delivery from the automotive dealer or the broker.Therefore, with regards to certain car, time of delivery, and price, the transaction does not consist of Gharar.contractdoesnotconsist of Riba.It is because Islamic ban car.Al Qurtubi stated that Riba is excessive 56 .According to Bakar, Riba is addition as a requirement for the loan agreement 57 .In murabaha contract, the position a borrower.However, the positions or the relationship between the Islamic bank and the client are the seller and the buyer.Islamic bank sells a car to the buyer (the client).The client who is the buyer would not pay interest to Islamic Bank.Therefore, the car ree from interest or Riba.contract does not include Maysir.It is because the car financing does not play the game or involve gambling activities.According to Samuelson .Furthermore, Brenner argued that the reason they do speculation and gambling is the hope of becoming rich quickly 59 .The bank as a seller sells the car to the client Sa'aati, "The Permissible Gharar (Risk) in Classical Islamic Jurisprudence."Qur'an Volume 3. p. 348.slamicBanking and Finance (Essential Reading in Islamic Finance).p. 7.