MURABAHA FINANCING OF THE INDONESIAN ISLAMIC BANKS UNDER AN ISLAMIC ECONOMIC LAW AND THE FATWA DSN MUI

Abstract

This study conducts a thorough analysis of the practice of Murabaha financing within Islamic banks, contextualized within the framework of Islamic economic law and the influential Fatwa issued by the Indonesian Ulema Council (Majelis Ulama Indonesia - MUI). Murabaha, a fundamental mode of Islamic finance, involves a cost-plus-profit arrangement that adheres to Shariah principles. This analysis delves into the core principles of Islamic economic law, which include fairness, transparency, and adherence to ethical financial conduct, and investigates how these principles are manifested in Murabaha transactions. Central to this examination is the Fatwa issued by the MUI, which serves as a guiding regulatory framework for Murabaha financing. This Fatwa provides essential guidelines to ensure the compatibility of Murabaha transactions with Shariah principles and ethical practices. By exploring the origins, key features, and benefits of Murabaha financing as guided by the MUI Fatwa, this study highlights the intricate dynamics through which Islamic banks in Indonesia operationalize this financing mode while upholding the tenets of Islamic economic law.