Rethinking the paradigm of Islamic banking product development (based on an Indonesian case)

Abstract

Abstract This study aims to reconstruct the paradigm of sharia banking product development from the perspective of Islamic commercial law and reconstruct a new paradigm of sharia banking product development that can be offered as a substitute for such a problematic paradigm. The interest prohibition doctrine is based merely on making qiyâs (analogical reasoning) of interest to ribâ jâhiliyya where this leaves an unending ikhtilâf. Meanwhile, the doctrine that seems to require sharia banking products to be developed based on mu’âmala fiqhiyya contracts is not supported by a clear Islamic law reasoning logic. This means that there is no recommendation (sunna) let alone necessity (wujûb) to use it. Both doctrines are supported by neither robust sharia law bases nor qaṭ’î sharia postulates nor ijmâ’. Therefore, these two doctrines should not be used as a paradigm since they will have an extensive impact on the development of sharia banking products. JEL Classification: G21 · L25