Impact of Islamic Jurisprudential on Traditional Financial Customs  and Legal Integration in Indonesia

Romi Adetio Setiawan

doi:10.32350/jitc.132.13

Romi Adetio Setiawan Fatmawati Sukarno State Islamic University of Bengkulu, Indonesia https://orcid.org/0000-0002-0170-7329

DOI: https://doi.org/10.32350/jitc.132.13

Keywords: finance, Islamic Jurisprudence, legal laws, Sharī‘a, secular, traditions, secular

Abstract

Abstract Views: 0

The current research presented an insightful analysis of the dynamic relationship between Islamic Jurisprudence and customary financial practices within the jurisdiction of Indonesia. The objective of this study was to investigate the extent to which the broader Indonesian society embraces Sharī‘a-compliant customary practices; subsequently, being acknowledged within the secular legal framework. This exploration was particularly pertinent due to Indonesia's nuanced approach to Islamic law integration, as it neither fully adopted nor entirely dismissed Sharī‘a principles. This study deployed a standard doctrinal approach, which involves a meticulous examination of legislative provisions and a thorough examination of practical cases, involving indigenous financial customs, such as ijon, tebasan, sewa and gadai. By doing so, this research seeks to ascertain whether the influence of Sharī‘a on customary practices can harmoniously coexist within the Indonesian legal system. The findings of this study challenged the traditional notions of legal centralism, emphasizing the importance of integrating local religious traditions into the state legal system. In particular, the study argued that Sharī‘a-endorsed commercial practices can independently occur alongside traditional practices in society, even in the absence of explicit Sharī‘a principles or interest-based restrictions. This study significantly contributed to our understanding of legal pluralism within Indonesian context and introduced a novel approach that acknowledged the interplay between Sharī‘a and Secular law, while fostering social cohesion and legal harmony.

Downloads

Download data is not yet available.

References

Agency, Japan International Cooperation. "The Study on the Improvement of Farmers' Income: Agricultural Processing and Rural Microfinance in Indonesia." Jakarta: Nippon KOEI Co., LTD., 2007.

Anggraeni, Dewi. "Islamic Law and Customary Law in Contemporary Legal Pluralism in Indonesia: Tension and Constraints." Ahkam: Jurnal Ilmu Syariah 23, no. 1 (2023): 25-48. https://doi.org/https://doi.org/10.15408/ajis.v23i1.32549.

Archer, Simon., and Rifaat Ahmed Abdel Karim. "Profit-Sharing Investment Accounts in Islamic Banks: Regulatory Problems and Possible Solutions." Journal of Banking Regulation 10, no. 4 (2009): 300-06. https://doi.org/https://doi.org/10.1057/jbr.2009.9.

As'ad, D.I. Ansusa Putra., and Arfan. "Being Al-Wasatiyah Agents: The Role of Azharite Organization in the Moderation of Indonesian Religious Constellation." Journal of Islamic Thought and Civilization 11, no. 2 (2021): 22. https://doi.org/https://doi.org/10.32350/jitc.112.07.

Barrieu, Pauline M., and Luitgard AM Veraart. "Pricing Q-Forward Contracts: An Evaluation of Estimation Window and Pricing Method under Different Mortality Models." Scandinavian Actuarial Journal 2016, no. 2 (2016): 146-66.

Benda-Beckmann, Keebet von, and Bertram Turner. "Legal Pluralism, Social Theory, and the State." Journal of Legal Pluralism and Unofficial Law 50, no. 3 (2018): 255-74. https://doi.org/https://doi.org/10.1080/07329113.2018.1532674.

Bowen, John R. "Qurʾân, Justice, Gender: Internal Debates in Indonesian Islamic Jurisprudence." History of Religions 38, no. 1 (1998): 53-55.

Butt, Simon. "Islam, the State and the Constitutional Court in Indonesia." Washington International Law Journal 19, no. 2 (2010).

Cahyani, Fajar. "Praktek Jual Beli Tebasan Dalam Perspektif Hukum Ekonomi Syariah/ the Practice of Tebasan in Islamic Law." Jurnal Justisia Ekonomika 1, no. 1 (2017): 11. https://doi.org/http://dx.doi.org/10.30651/justeko.v1i01.1020.

Calder, Ryan. "Sharīʿah-Compliant or Sharīʿah-Based? The Changing Ethical Discourse of Islamic Finance." Arab Law Quarterly 35, no. 1-2 (2020): 50-73. https://doi.org/10.1163/15730255-bja10008.

Chapra, Umer M. Islam and the Economic Challenge. 330.12. 1 ed. Vol. 17, Saudi Arabia: International Islamic Publishing House 1995.

Ercanbrack, Jonathan G. The Law of Islamic Finance in the United Kingdom: Legal Pluralism and Financial Competition. PhD Thesis, University of London, 2011.

Fauzi, Nurul Fathiyah., Yuli Hariyati, and Joni Murti Mulyo Ajin. "Sistem Tebasan Pada Usaha Tani Padi Dan Dampaknya Terhadap Kondisi Sosial Ekonomi Petani Di Kabupaten Jember." [the System of Tebasan and Its Impact on the Farmer's Social Economic Condition at Jember Distric]." Jurnal Ilmiah Inovasi 14, no. 1 (2016): 26-34. https://doi.org/https://doi.org/10.25047/jii.v14i1.86.

Fealy, Greg., and Robin Bush. "The Political Decline of Traditional Ulama in Indonesia: The State, Umma and Nahdlatul Ulama." Asian Journal of Social Science 42, no. 5 (2014): 536-60.

El-Gamal, Mahmoud A. Islamic Finance: Law, Economics, and Practice. Cambridge University Press, 2006.

Gillen, Neal P., and Walter H.E. Jaeger. "Forward Contracting in Agricultural Commodities: A Case History Analysis of the Cotton Industry." UIC Law Review 12, no. 2 (1979): 253-97.

Ginena, Karim. Foundations of Shari'ah Governance of Islamic Banks. Edited by Azhar Hamid. Chichester, West Sussex : Wiley, 2015., 2015.

Grassa, Rihab., and Kouthar Gazdar. "Law and Islamic Finance: How Legal Origins Affect Islamic Finance Development?". Borsa Istanbul Review 14, no. 3 (2014): 158-66. https://doi.org/https://doi.org/10.1016/j.bir.2014.05.001.

Haris, Fitra. Memahami Praktik Ijon Dan Dampak Buruknya Bagi Djp [the Practice of Ijon and Its Implication for Government Incom]. Jakarta: Direktorat Jendral Pajak, 2019.

Hosen, Nadirsyah. "Behind the Scenes: Fatwas of Majelis Ulama Indonesia (1975-1998)." Journal of Islamic Studies 15, no. 2 (2004): 147-79. https://doi.org/DOI: 10.1093/jis/15.2.147.

—. Sharī‘a and Constitutional Reform in Indonesia.Singapore: Institute of Southeast Asian Studies, 2007.

Johnson, Toni, and Lauren Vriens. "Islam: Governing under Sharī‘a." Council on Foreign Relations 25 (2014).

Kamali, Mohammad Hashim. ""Maqasid Al-Shari'ah": The Objectives of Islamic Law." Islamic Studies 38, no. 2 (1999): 193-208.

Lapenu, Cecile. "Indonesia’s Rural Financial System: The Role of the State and Private Institutions." In Case Studies in Microfinance, Sustainable Banking with the Poor, Asia Series. Washington, DC: World Bank, 1998.

Lindsey, Tim. "Between Piety and Prudence: State Syariah and the Regulation of Islamic Banking in Indonesia." The Sydney Law Review 34, no. 1 (March 2012 2012): 107-27.

Maimun, Maimun. "Rekonstruksi Konsep Ijmak Dalam Berijtihad Di Era Modern [Reconstructing the Concept of Concensus in Legal Reasoning at the Modern Period]." Journal of Law and Economics, ASAS 10, no. 2 (2018): 46.

Malaka, Mashur. "Praktek Monopoli Dan Persaingan Usaha [the Monopoly Market and Business Competition]." Jurnal Al-'Adl 7, no. 2 (2014): 14.

Mariyani-Squire, Edward. "Tensions in Islamic Economics." Trikonomika 12, no. 1 (2013): 1. https://doi.org/10.23969/trikonomika.v12i1.452.

Mary, Fabienne., and Geneviève Michon. "When Agroforests Drive Back Natural Forests: A Socio-Economic Analysis of a Rice-Agroforest System in Sumatra." Agroforestry Systems 5 (1987): 27-55. https://doi.org/https://doi.org/10.1007/BF00046412.

Mohamad, Mohammad Taqiuddin., Mohd Yusra Abdullah, Mohd Afifuddin Mohamad, and Ummu Zainab Al-abidah Zainal Abidin. "The Historical Development of Modern Islamic Banking: A Study in South-East Asia Countries." African Journal of Business Management 1, no. 1 (2013): 1-14.

Muslimin, JM. "Islamic Law in the Pancasila State." Journal Ahkam 12, no. 1 (2012): 15-26.

Nurhadi, Nurhadi. "Bunga Bank Antara Halal Dan Haram [the Bank Interest Rates; between Halal and Haram] ". Journal of Education and Social Religious Study, Nur El-Islam 4, no. 2 (2017): 30.

Nurlaelawati, Euis. Modernization, Tradition and Identity : The Compilation of Islamic Law and Legal Practice in the Indonesian Religious Courts. Amsterdam, The Netherlands: Amsterdam University Press, 2010.

Pegadaian, PT. "Kinerja Pegadaian Semester I 2023 Semakin Berkilau."(2023). Published electronically 26/7/2023.

Rachman, Abdul. "Dasar Hukum Kontrak (Akad) Dan Implementasinya Pada Perbankan Syariah Di Indonesia." [Legal Basis of Contracts (Akad) and Their Implementation in Sharia Banking in Indonesia]. Jurnal Ilmiah Ekonomi Islam 8, no. 1 (2022): 47-58. https://doi.org/http://dx.doi.org/10.29040/jiei.v8i1.3616.

Ratnasari, Rida Hesti. "Understanding the Islamic Banking System in Indonesian Modern Economics Practices." International Journal of Business, Economics & Management 3, no. 1 (2021): 212-18. https://doi.org/https://doi.org/10.31295/ijbem.v3n1.197.

Razak, Abd Hakim Abd. "Centralisation of Corporate Governance Framework for Islamic Financial Institutions: Is It a Worthy Cause?". ISRA International Journal of Islamic Finance 10, no. 1 (2018). https://doi.org/10.1108/IJIF-08-2017-0020.

Sahalessy, Jacoba. "Peran Latupati Sebagai Lembaga Hukum Adat Dalam Penylesaian Konflik Antar Negeri Di Kecamatan Leihitu Provinsi Maluku [the Role of Customary Law Latupati as Institutions; Conflict Resolution and Inter-State District Leihitu]." Jurnal Sasi 17, no. 3 (2011): 45-52. https://doi.org/https://doi.org/10.47268/sasi.v17i3.364.

Salim, Arskal. Contemporary Islamic Law in Indonesia: Sharī‘a and Legal Pluralism. Edinburgh, UK: Edinburgh University Press, 2015.

Setiawan, Romi Adetio. The Future of Islamic Banking and Finance in Indonesia: Performance, Risk and Regulation. London: Routledge, 2023. doi:https://doi-org.ezproxy.uws.edu.au/10.4324/9781003393986.

Siddiqui, Anjum. "Financial Contracts, Risk and Performance of Islamic Banking." Managerial Finance 34, no. 10 (2008): 680-94. https://doi.org/doi:10.1108/03074350810891001.

Sofyan, A Syathir, Ayu Ruqayyah Yunus, Muslihati, Nurfiah Anwar, and Emily Nur Saidy. "Local Economic Practices in Developing Islamic Financial Products in Indonesia." Jurnal Ekonomi dan Bisnis Islam 6, no. 2 (2021): 141-63. https://doi.org/http://dx.doi.org/10.21093/at.v6i2.2946.

Sturgess, Neil H, Hesti Wijaya, and N Dow. "Usufruct and Usury: An Analysis of Land Leasing in East Java." Australian Journal of Agricultural Economics 28, no. 1 (1984): 15-32.

Widayanti, Sri., and Eka Cahya Maulidiyah. "Religious Tolerance in Indonesia." Paper presented at the Proceedings of the 2nd International Conference on Education Innovation (ICEI 2018), Jakarta, 2018.

Yamamah, Ansari. "The Existence of Al-Urf (Social Tradition) in Islamic Law Theory." IOSR Journal of Humanities and Social Science (IOSR-JHSS) 21, no. 12 (2016): 43-48.