Positivization of Fatwas of the National Sharia Council of the Indonesian Ulema Council in the Sharia Banking Law: Problems and Challenges

Abstract

The positivization of DSN MUI's fatwa within Sharia Banking Law ensures compliance with sharia principles. This study examines how DSN MUI incorporates its fatwas into the law and the associated strategies. Using a descriptive qualitative approach with historical, normative, and philosophical methods, primary data include UUPS and MUI fatwas from 2000/2007, while secondary data encompass statutory theory and supportive materials. Findings reveal a methodical and democratic positivization process. Law No. 7 of 1992 marked the onset of Islamic banking via profit-sharing financing. Law No. 10 of 1998 introduced dual banking, while GBHN 1999 and the 1945 Constitutional Amendment further empowered the DPR. DSN MUI was established by MUI to implement Islamic economics. Up to 2007, DSN MUI issued 64 fatwas, formerly non-binding but now legally binding through legislative integration. Although MUI holds a central role in establishing sharia principles, its position remains extrinsic to institutional structures. UUPS designates MUI as a sharia authority (Article 26) and a mass organization simultaneously. DSN MUI plays a pivotal role in supervising sharia compliance in banking products. UUPS absorbs DSN MUI's fatwas, evident in clause alignment with the fatwas. Articles 26 and 32 delineate MUI's role in overseeing sharia compliance. In summary, positivization of DSN MUI's fatwa in Sharia Banking Law implements Islamic law in Indonesia by melding DSN MUI's supervision and determination of sharia principles in banking.