Abstract
<p>Sharia banking is developed in response to economic and cultural groups that are used to accommodate those who want the services to be carried out with Islamic sharia principles and morals. The development of Sharia banks in Indonesia and Malaysia needs to be studied more deeply because Malaysia first established Sharia banks in 1983 through Bank Islam Malaysia Berhad (BIMB) while the first sharia bank in Indonesia, which name of Bank Muamalat, was burned in 1991, which determines the direction of the progress of sharia banks in Indonesia with the provisions of Law Number 10 of 1998 concerning Banking. Determine the amount of assets from banks that have a ratio of 1: 10 with Malaysia considering the assets of sharia banks in Indonesia amounted to US $ 35.62 billion while Malaysia reached US $ 423.2 billion. This study focuses on the factors and effects of legal products from the two countries in order to get more comprehensive study and knowing the relation between the legal products with sharia banking development in Indonesia and Malaysia.</p>
Highlights
Regulation of Sharia Banking in Malaysia and IndonesiaIslamic banks in Malaysia are under different laws depending on the form of institution
As for the Islamic economy according to Fazlurrahman, "Islamic economics according to the builders and supporters are built on or at least colored by the principles of religious, world-oriented and the hereafter." In 1992 Bank Muamalat Indonesia was established as a sign of the dual definition of banks, commercial banks and banks People's Credit in Law Number 10 of 1998 Article 1 concerning banking, namely: "Banks are business entities that collect public funds in the form of deposits and channel them to the public in the form of credit and / or other forms in order to improve the standard of living of the people
"Sharia principles are rules of agreement based on Islamic law between banks and other parties to deposit funds and or finance business activities, or other activities stated in accordance with sharia, including financing based on profit sharing principles, financing based on equity participation, the principle of buying and selling goods by obtaining profits, or financing capital goods based on the principle of pure choice without choice
Summary
Islamic banks in Malaysia are under different laws depending on the form of institution. What happened in Indonesia, with a population that was so dominant and the demands of the Muslim community who hoped for banking operations in an ideal form, Islamic banking oparational must pay attention to the substance, especially operational compliance with sharia principles. From one side this is seen as a positive trend, because there has been supervision by the community. The financing portfolio in Indonesian Islamic banking is relatively varied, where the profit sharing portfolio reaches 33%
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