IDENTIFICATION OF PROHIBITED TRANSACTIONS

IN SYARI'AH FINANCE

SYARI'AH AND FINANCE

Shariah can be interpreted as a path that must be taken or a line that should be
passed. In Shari'ah regulated about worship and muamalah. The law of worship
declares: everything is forbidden to do, except that there are instructions / commands
in the Qur'an or sunnah. While the origin of muamalah, declares: everything is
allowed unless there is a ban in the Qur'an or as-Sunnah.

The most powerful legal basis in connection with the implementation of

muamalah activities whose laws can develop in accordance with the development of
human life is the Hadith of the Prophet, which means: Antum a'lamu bi umuri
al-dunyakum? (You know more about your world affairs). The problem of muamalah
is a problem that develops following the development of human civilization.
Including the development of Islamic civilization.

The next reason, economic problems is a very risky issue. This means, the
Islamic people can be separated aqidahnya if economic conditions are not good.
Therefore, efforts to uphold the right economic activities according to the Shari'ah and
give greater benefit to Muslims in particular and mankind in general is a necessity.

Practically, the economic, financial and banking systems that are interest-based or
conventional contain some disadvantages:

1. Interest-based transactions violate the fairness or fairness of the business.

In business, the results of every company are always uncertain.

Borrowing is obliged to pay the agreed interest rate even if the company may
lose.

2. The inflexibility of interest-based transaction systems led to bankruptcy.

This leads to a loss of productive potential of society as a whole, in

addition to the unemployment of most people.
3. The bank's commitment to safeguard the depositors' money following the
interest keeps the bank anxious to return its principal and interest.

Therefore, for the sake of security, they only want to refund more
business that is really well established or to people who can guarantee the
security of its loan.

4. Interest-based transaction systems hinder the emergence of innovations by

small businesses.

Big businesses can take risks to try new techniques and products because
they have a back-up of funds if their new idea does not work. In
contrast, small businesses can not try new ideas because they have to
borrow an interest from the bank.

5. In the interest system, banks will not be interested in business partnership

unless there is a guarantee of certainty of return on capital and interest
income.

Banks working with this system have no incentive to help a business that
is useful to the community and workers.