Conventional Financial Institutions Research Articles

Sharia Cooperatives in Indonesia as an Effort to Create a Sustainable Economy

This article provides background regarding the development of sharia cooperatives in Indonesia as part of efforts to create a more inclusive and sustainable economy. Sharia cooperatives exist as an alternative that is in accordance with Islamic economic principles, emphasizing economic, moral and ethical aspects of doing business. Even though they are still faced with various challenges, the growth of sharia cooperatives shows a significant impact in empowering communities, especially in areas that were previously less accessible to conventional financial institutions. This article aims to provide a deeper understanding of sharia cooperatives in Indonesia, including history, recent developments, basic principles, roles and challenges faced. The research method used is literature study, by collecting data from various references such as books, articles and journals. The article also reviews regulations that support sharia cooperatives, basic concepts, governance, and the history of their development. By exploring various information related to sharia cooperatives, it is hoped that this article can provide a comprehensive picture of the current condition of sharia cooperatives as well as their potential and challenges in the future.

Evaluation of the Impact of Economic Empowerment Initiatives on Poverty Alleviation among Youth and Women's Groups: A Case Study of the Arusha Region, Tanzania

Globally, the Women and Youth Development Fund, channeled through women's groups, has played a crucial role in fostering economic empowerment for women and youth. In Tanzania, population growth has introduced both opportunities and challenges, with a significant issue being the rise in unemployment and poverty, particularly among women and youth. To address these challenges, the Women, Youth, and People with Disabilities Revolving Fund (WYDF) was established within Local Government Authorities (LGAs) to provide accessible loans to the poor, who are often excluded from conventional financial institutions. This study investigates the effectiveness of economic empowerment initiatives in alleviating poverty among youth and women's groups in the Arusha Region, Tanzania. Specifically, it examines the impact of start-up capital provision, financial literacy training, and business capacity-building on poverty reduction. The study employed a survey research design with a quantitative approach, collecting data from 95 respondents through questionnaires. Purposive sampling was used to select the sample. The data were analyzed using descriptive statistics and SPSS software, with regression analysis employed to explore the relationships between variables influencing poverty reduction among the targeted groups. The findings reveal that start-up capital provision, financial literacy training, and business capacity-building significantly contribute to poverty reduction among youth and women's groups. The study recommends enhanced financial literacy programs to enable entrepreneurs to save and accumulate sufficient capital for business investments. Additionally, the government, through youth and women empowerment programs, should continue providing training, particularly to those without technical skills, focusing on new production techniques, efficient fund allocation, and marketing strategies to ensure sustainable impacts.

Sharia Economic Law Criticism on Muhammad Syahrûr’s Hudûd Theory Regarding Bank Interes

n modern economics applied by conventional financial institutions, the interest system is inseparable. Economic system based on sharia principles emerged as a solution to riba-based (usury-based) transactional activities, which in sharia economic law is in the khilafiyyah (dissent) territory amongst scholars regarding whether the conventional bank interest is riba which is prohibited by Islamic law. A figure named Muhammad Syahrûr came up and offered his theory of limits (nazhariyyah al-hudûd) in providing riba limitations in the Quran. This research aims to describe M. Syahrûr's thoughts on bank interest based on his theory of limits, and to analyze it based on the review of sharia economic law (fiqh muamalah mâliyyah). this reseach is understood as a literary study research which is a research on secondary materials. The type of data used in this research is secondary data, which is literature focusing on the thoughts of a figure, which is Muhammad Syahrûr.The result of the research shows that Muhammad Syahrûr's opininion that allows the practice of bank interest based on his theory of limits (nazhariyyah al-hudûd) is a marjûh (weak) opinion, since it is not supported by valid arguments and it also contradicts the opinions of the jumhur ulama (the majority of the scholars).

Legal protection of personal data for emergency contacts unilaterally included in illegal online loan services

New opportunities for digital financial services (Fintech) have emerged to accelerate digital financial inclusion amid social distancing, one of which is through Online Loans. The convenience offered by Online Loans in the process of borrowing money or financing without having to visit conventional financial institutions such as banks directly, is one of the factors supporting the increasing popularity of Online Loans, thereby opening up more opportunities for Online Loan Providers to expand their industry. However, issues arise due to the ease of this technology, one of which is the misuse of borrowers' emergency contacts, causing inconvenience to the owners of those contacts whose personal lives are disrupted. The study is conducted using normative legal research. The experience of convenience offered by Online Loans is much greater; the borrowing process only takes place through a website or mobile phone, allowing consumers to confirm only through the system and do it anytime and anywhere. However, the conveniences provided by Online Loans are often not accompanied by adequate education in society regarding the technology used or the legal and lending provisions. This has become a loophole for "predatory lending" actors to develop their businesses. Legal protection for borrowers is already regulated in the Financial Services Authority Regulation Number 10/POJK.05/2022 Regarding Information Technology-Based Borrowing and Lending Services. Borrowers regarding their personal data have also been clearly regulated in Law Number 27 of 2022 Concerning Personal Data Protection, as well as the presence of Financial Technology associations that accompany the pace of technology-based borrowing and lending services. Control of personal data must obtain explicit consent from the data subject to process personal data. There are several sanctions for online loan customers who provide emergency contact numbers without consent. These sanctions include written warnings, temporary cessation of all personal data processing activities, deletion or destruction of personal data, and/or administrative fines.

Financial Technology (Fintech) and Financial Inclusion: Analyzing the Role of Innovative Technologies in Expanding Access to Financial Services

This study examines the crucial role of Financial Technology (Fintech) in improving financial inclusion, with a specific focus on how innovative technologies are increasing the availability of financial services for marginalised communities. The report commences by providing a clear definition of Fintech and its extent, followed by a summary of financial inclusion, emphasising its importance in promoting economic expansion and mitigating inequality. A thorough literature analysis examines the historical background of financial inclusion, the development of Fintech, and the current study on how they cross. The report explores significant Fintech advancements, including mobile banking, digital payments, blockchain, and AI-driven services. It assesses how these innovations decrease transaction costs, enhance accessibility, and tackle the obstacles encountered by conventional financial institutions. The study additionally evaluates the impact of Fintech in reaching individuals without access to banking services and those with limited access, improving their understanding of financial matters, and providing assistance to microfinance and small enterprises. The report also examines the legislative obstacles, cybersecurity risks, the disparity in digital access, and the difficulties of trust in the adoption of Fintech. Lastly, it examines possibilities for future growth, such as developing technology and cooperative initiatives, and offers suggestions for policymakers and stakeholders to effectively utilise Fintech's potential in promoting financial inclusion.

Faktor Determinan Keputusan Menabung dengan Minat Sebagai Variabel Intervening

This study aims to determine the effect of religiosity, knowledge, promotion, location and service quality variables on saving decisions. The religiosity of the people who only view Islamic financial institutions is the same as conventional financial institutions. The customers' desire to save can be hindered by remote locations, activities and busyness. In addition, the low level of public knowledge about Islamic financial institutions influences the decision to become a customer of an Islamic financial institution. The population in this study were members of the Ben Sejahtera BMT Rawalo Banyumas branch. The number of samples in this study were 92 respondents. The data obtained was then analyzed using the PLS (Partial Least Square) analysis technique through the SmartPLS 4.0 software. The results showed that knowledge, promotion, and location factors had no effect on members' interest in saving at Islamic financial institutions. Meanwhile, the factors of religiosity and service quality are the variables that most influence the interest of traders in making saving decisions at Islamic financial institutions.

Analysis of Consumptive Financing for Civil Servants at Bank Nagari Conventional and Sharia Bukittinggi

Consumer financing has become an essential product in the banking industry. Civil Servants (PNS) are one of the significant groups in the consumer financing market. The provision of consumer financing for PNS is not only available in conventional financial institutions but also increasingly prevalent in Islamic financial institutions. This study aims to analyze and compare the interest rate systems in conventional banks, namely sliding, flat, and annuity, with the interest rate system in Islamic banks, namely the declining margin annuity method applied by Bank Nagari in consumer financing. This research method uses a qualitative approach with in-depth interviews with PNS who are customers of Bank Nagari Syariah Bukittinggi and simulation data on the Bank Nagari Conventional website Calculator. Based on interest calculations, it is evident that the method with the least bank interest income is the sliding method at Bank Nagari Conventional, followed by the declining margin annuity method at Bank Nagari Syariah. Thus, this study provides valuable insights for PNS customers in choosing financing products that are beneficial to customers and align with their needs and values

Cryptocurrency Adoption and Financial Innovation

The advent of cryptocurrencies and blockchain technology has sparked a revolutionary Shift in the financial sector. This study sets out on a wide-ranging investigation to understand the nuanced dynamics, repercussions, and potential future paths of this shifting environment in the UK and USA. The primary goals of the research are to examine how cryptocurrencies affect financial markets and conventional banking systems; to examine how blockchain technology might be used in the financial sector; to assess policy and regulatory considerations; and to predict and plan for the future. This research digs into how cryptocurrencies have revolutionized the banking and finance sectors. Analysis of adoption rates, market volatility, and integration methods sheds light on the changing position of cryptocurrencies in investment portfolios, reconfiguration of asset classes, and coping mechanisms of conventional financial institutions. When looking at the financial sector as a whole, the transformational potential of blockchain technology becomes clear. The advent of DeFi, smart contracts, and asset tokenization offers new prospects to improve financial transactions, increase transparency, and broaden participation in the investment market. The research analyzes cryptocurrencies and blockchain technology from a policy and regulatory perspective. The delicate balancing act between stimulating innovation and guaranteeing consumer protection, market integrity, and financial stability is highlighted by a comparison of the regulatory methods adopted in the United Kingdom and United States, as well as proposals from international organizations. The research identifies potential future paths for these technologies and their implications. Opportunities and challenges that will influence the future of finance emerge, with a focus on central bank digital currencies (CBDCs), sustainable blockchain solutions, and interdisciplinary collaborations. As this deep dive comes to a close, the transformational power of cryptocurrencies and blockchain technology is highlighted. It sheds light on the forces that are altering the structures of the world’s financial markets, conventional banking structures, and regulatory frameworks. The findings and critical assessment stress the need for well-considered choices, ethical innovation, and interdisciplinary cooperation in order to succeed in an ever-changing environment. To further democratize access, improve transparency, and reshape the economic fabric of our planet, the future of finance resides at the confluence of tradition and innovation, where cryptocurrencies and blockchain technology exist. Cryptocurrency adoption has catalyzed changes in consumer behavior and investment patterns. While some view digital currencies as speculative assets, others embrace them as alternative forms of money and store of value. This diversity of perspectives underscores the need for a nuanced understanding of cryptocurrency adoption and its implications for financial systems. The significance of this study lies in its contribution to our understanding of the evolving relationship between cryptocurrency adoption and financial innovation. By elucidating the drivers, challenges, and implications of this phenomenon, policymakers, industry stakeholders, and researchers can make informed decisions to harness the transformative potential of digital currencies while mitigating associated risks. Cryptocurrency adoption and the financial innovations it has spurred are transforming the way we think about money and financial services. While challenges remain, the potential benefits of a more decentralized, efficient, and inclusive financial system are significant. As the technology matures, regulatory frameworks adapt, and user confidence grows, cryptocurrency adoption is likely tocontinue its upward trajectory. Cryptocurrency adoption and its associated financial innovations have the potential to usher in a paradigm shift in the way we manage and exchange value.

Prospects and challenges of agricultural financing in Nigeria: A review

This paper examined the prospects and challenges of agricultural financing in Nigeria. It was observed that agricultural financing is all about providing services to the farmers who are traditionally not served by the conventional financial institutions. Agricultural financing holds a lot of prospects for Nigerians especially the poor as it will enable them develop their skills, engage in production and many others. Among the problems identified are access to banking services in rural communities, lack of acceptable collateral/ security, perceived high agricultural risk, lack of access to credit information, high cost of credit administration, access to market, infrastructural challenges and subsistence nature of farming. The various prospects highlighted include; economic empowerment of farmers, poverty reduction, gains from international trade, employment generations, rural development, skill development, new innovations, effective utilization of local resources and output expansion. Consequent upon the problems noted, the paper recommends that the supervisory authorities should enforce standards so as to address the issue of poor management of funds meant for credit disbursement.

Islamicity Cultural Performance Index (ICPI) in increasing customer trust in KSPP syariah BMT NU East of Java Indonesia

The development of Islamic financial institutions in Indonesia, notably in East Java, has seen significant growth, particularly with the rise of Islamic Commercial Banks (BUS) and Islamic Business Units (UUS) within conventional financial institutions. The study focuses on assessing the performance of East Java BMT NU Sharia KSPP using the Islamic Cultural Performance Index (ICPI) to enhance customer trust. Employing qualitative methods with descriptive analysis, the research evaluates financial performance from 2017 to 2021. It utilizes the Islamic Performance Index (IPI) approach, examining Profit Sharing Ratio, Equitable Distribution Ratio, and Director-Employee Welfare Ratio. Results demonstrate favorable ratios contributing to customer trust, influenced by aspects like benevolence, integrity, and religious values. While the IPI evaluates financial aspects, the Islamic Cultural Performance Index (ICPI) considers religious values' impact on trust. This study enriches understanding of customer trust dynamics, serving as a resource for enhancing quality learning and analytical frameworks in Islamic finance.

EKSPLORASI TEORI DISRUPSI DIGITAL CLAYTON CHRISTENSEN DAN MAQASHID SYARIAH TERHADAP INOVASI PERBANKAN SYARIAH DI ERA DIGITAL

This research holistically explains the innovation of Islamic banking in the digital era, where, in the last decade, the digital revolution has changed the way financial institutions operate, triggering challenges and opportunities for Islamic banking. Through in-depth desk research with qualitative research based on analytical descriptive analysis to highlight the complex challenges and innovations faced by Islamic banking accompanied by Clayton Christensen's Digital Disruption theoretical framework and Maqashid Syariah concept. This research highlights the various challenges Islamic banking faces, ranging from integrating digital technology with Sharia principles to competition with conventional financial institutions, the information gap and the need for competent human resources. On the other hand, innovations in Islamic banking products in the digital era include using technologies such as mobile banking, blockchain, and AI to improve services and operational efficiency and expand access to finance through innovative financing and investment products. Analysis based on Clayton Christensen's Digital Disruption theory reveals how Islamic banking adopts technology to offer more efficient and personalised solutions to customers, while the Maqashid Shariah perspective shows how such innovations fulfil the objectives of Islamic law, such as safeguarding religion, soul, mind, offspring, and property, as well as protecting the environment. Overall, Islamic banking product innovation in the digital era illustrates the synergy between technology and Sharia principles to create a fair, inclusive, sustainable financial ecosystem. By continuously developing solutions that meet the needs of modern society while maintaining the integrity of Sharia values, Islamic banking is at the forefront of providing added value to customers and society while opening up new economic growth opportunities.

Faktor-Faktor Yang Mempengaruhi Tingkat Kepercayaan Masyarakat Terhadap Lembaga Keuangan Syariah: Studi Kasus Masyarakat Kabupaten Labuhan Batu Selatan

The development of Information Technology should make companies grow more rapidly, including Sharia Financial Institutions, both in terms of receiving and distributing funds, but in reality we can see that Islamic financial institutions still tend to be less developed than conventional financial institutions, this is caused by many factors, and Therefore, the aim of this research is to find out whether human resources in Islamic financial institutions, namely employees and the products offered, can influence the level of public trust in Islamic financial institutions, either partially or simultaneously. This type of research is quantitative using a questionnaire as a data collection method which is then tested using multiple linear regression analysis. The research results show that human resources or employees from Islamic Financial Institutions have a positive influence with a significant value of 0.000, while the products offered influence Islamic financial institutions with a significant value of 0.000, while simultaneously the two independent variables have a positive influence with a significance value of 0.000.

Ethical entrepreneurship: Islamic financial principles for Small and Medium Enterprises (SMEs)

Islamic ethics prescribe its followers to zealously guard their behavior, words, thoughts, and intentions and observe certain norms and moral codes in their financial transactions; in their social affairs; and in private and public life. The unique feature of the Islamic ethical system is that it permeates all spheres and fields of human life. Islam therefore has its own distinctive value-based ethical system for finance dealings. It prescribes certain specific guidelines governing finance ethics, which are dictated primarily by the notion of halal (lawful or permitted) and haram (unlawful or prohibited) as per Islamic jurisprudence (fiqh). The current global economic meltdown is a clear revelation of the shortcomings of the conventional financial set-up and the weakness of self-designed system devoid of spiritual and divine guidance, hence the yearning and desire for a socially just financial system by conscious individuals and corporate bodies. The assertion that Islamic financial system is only distinguished from other economic systems in its emphasis on interest free and other usurious transactions coupled with the fact that many concepts are springing up contending with the Islamic financial system inform the need to study the system within the context of Islamic ethical principles. This paper is therefore out to articulate the ethical principles of financial institutions as enshrined in the Qur’an and the Sunnah of the Prophet so that Islamic financial system will not lose focus and to avoid being carried away by the flamboyant and excessive profits and surpluses of the conventional financial institutions.

Islamic Social Finance: Exploring Zakat, Waqf, and Sadaqah in Economic Development

Islamic social finance has an important role in inclusive and sustainable economic development. In this context, zakat, waqf, and sadaqah become important instruments that can be used to mobilize resources and support economic development initiatives. However, challenges such as lack of public awareness, preference for conventional financial institutions, and lack of supportive regulations still need to be overcome.

Unveiling Cryptocurrency Impact on Financial Markets and Traditional Banking Systems: Lessons for Sustainable Blockchain and Interdisciplinary Collaborations

The advent of cryptocurrencies and blockchain technology has sparked a revolutionary shift in the financial sector. This study sets out on a wide-ranging investigation to understand the nuanced dynamics, repercussions, and potential future paths of this shifting environment in the UK and USA. The primary goals of the research are to examine how cryptocurrencies affect financial markets and conventional banking systems; to examine how blockchain technology might be used in the financial sector; to assess policy and regulatory considerations; and to predict and plan for the future. This research digs into how cryptocurrencies have revolutionized the banking and finance sectors. Analysis of adoption rates, market volatility, and integration methods sheds light on the changing position of cryptocurrencies in investment portfolios, reconfiguration of asset classes, and coping mechanisms of conventional financial institutions. When looking at the financial sector as a whole, the transformational potential of blockchain technology becomes clear. The advent of DeFi, smart contracts, and asset tokenization offers new prospects to improve financial transactions, increase transparency, and broaden participation in the investment market. The research analyzes cryptocurrencies and blockchain technology from a policy and regulatory perspective. The delicate balancing act between stimulating innovation and guaranteeing consumer protection, market integrity, and financial stability is highlighted by a comparison of the regulatory methods adopted in the United Kingdom and United States, as well as proposals from international organizations. The research identifies potential future paths for these technologies and their implications. Opportunities and challenges that will influence the future of finance emerge, with a focus on central bank digital currencies (CBDCs), sustainable blockchain solutions, and interdisciplinary collaborations. As this deep dive comes to a close, the transformational power of cryptocurrencies and blockchain technology is highlighted. It sheds light on the forces that are altering the structures of the world’s financial markets, conventional banking structures, and regulatory frameworks. The findings and critical assessment stress the need for well-considered choices, ethical innovation, and interdisciplinary cooperation in order to succeed in an ever-changing environment. To further democratize access, improve transparency, and reshape the economic fabric of our planet, the future of finance resides at the confluence of tradition and innovation, where cryptocurrencies and blockchain technology exist.

MCDM Using Multi-Attribute Utility Theory and PIPRECIA in Customer Loan Eligibility Recommendations

Customer loan eligibility recommendations are an important step in the risk and financial assessment process. To ensure business continuity and customer satisfaction, it is important for financial institutions to consider several key factors. Problems in determining lending include various aspects that include credit risk that is difficult to assess appropriately, insufficient information about potential borrowers, potential fraud that can harm lenders. Regardless, financial institutions must ensure sound risk management and comply with applicable regulations and compliance standards to minimize potential losses and maintain fairness in decision-making related to lending. Cooperatives act as institutions that provide access to loans with more flexible terms than conventional financial institutions. The loan application process involves evaluating the customer's eligibility, which includes an analysis of financial condition, credit history, and repayment capacity. The contribution of this study provides a recommendation for savings and loan cooperatives in lending to customers using a decision support system model. The purpose of this study is to evaluate and compare customer loan feasibility using a combination of Multi-Criteria Decision Making (MCDM) methods, namely Multi-Attribute Utility Theory (MAUT) and Pivot Pairwise Relative Criteria Importance Assessment (PIPRECIA). This study aims to determine the ability of both methods to provide a comprehensive understanding of loan feasibility by considering a number of relevant criteria. The results of the customer loan eligibility rating recommend rank 1 with a final value of 0.5127 obtained by Customer K, rank 2 with a final value of 0.432 obtained by Customer I, and rank 3 with a final value of 0.3559 obtained by Customer F.

Review Article] Impact of Cryptocurrency on Global Economy in the Twenty-First Century: A Comprehensive Review

Cryptocurrency has become a disruptive force in the twenty-first century's quickly changing world, completely changing how we view and interact with conventional financial institutions. This in-depth analysis intends to give insight on the underlying technology, economic ramifications, and legal difficulties that have formed this digital phenomena in order to examine the origins, development, and effect of cryptocurrencies over the past two decades. This article begins by exploring the history of cryptocurrencies, tracing its origins back to the mysterious Satoshi Nakamoto and the invention of Bitcoin in 2009. It analyses the underlying blockchain technology that underpins cryptocurrencies, giving readers a thorough understanding of its decentralised nature and the potential it has to revolutionise a number of industries outside of banking. The study also looks at the wide variety of cryptocurrencies that have appeared since the popularity of Bitcoin, including Litecoin, Ethereum, and Ripple, among countless others. It explores their distinctive characteristics, use cases, and market dynamics, stressing their potential for financial inclusion, international trade, and smart contract applications. The economic effects of cryptocurrencies are also examined in this paper, along with how they affect decentralised finance (DeFi), traditional banking systems, and financial innovation. It also looks at the difficulties presented by cryptocurrencies, including their volatility, scalability, and security issues, as well as the ongoing discussions surrounding their regulation and widespread use

Review Article] How Blockchain Technology Gives Birth to Digital Currency: A Comprehensive Review

Blockchain technology has revolutionised old financial institutions and changed the way that digital currencies are used today. This paper examines how the invention of digital currency was made possible by blockchain technology, emphasising the underlying ideas and workings of the new phenomenon. This paper offers a comprehensive review of the several ways that blockchain technology has facilitated the invention, advancement, and wide-scale adoption of digital currencies. It looks at the essential characteristics of blockchain technology, such as decentralisation, immutability, and transparency, and discusses how these characteristics help digital currencies succeed and develop. The review also explores how blockchain technology affects conventional financial institutions, as well as the difficulties it presents and the possibilities it holds for a time when digital currencies completely transform the world economy. This review aims to shed light on the revolutionary potential of this technology and its implications for the future of finance through an extensive analysis of blockchain technology's involvement in the creation of digital currencies.

Financial system stability in Indonesia and its relationship with economic growth before and during the Covid-19 pandemic

The purpose of this study is to assess the condition of financial system stability in Indonesia both before and during the Covid-19 pandemic and to look at its relationship with economic growth. This study develops six sub-sector groups described in 19 indicators in order to assess the condition of the financial system. Quarterly data for 6.5 years from Quarter I 2016 to Quarter II 2022 was evaluated. To assess the condition of the financial system, this study uses a composite index approach with the normalized max-min method. The correlation analysis method is used to assess the relationship between the index of financial system conditions and economic growth. The results showed that during the pandemic, there was a more significant increase in pressure on financial conditions than before the pandemic. The financial system instability index during the pandemic in the second quarter of 2020 was 3 times higher than the average and more than 5 times higher than the same quarter in 2019. In addition, the relationship between the financial condition index and economic growth is at 0.77 (strong category). The implication is this research can provide insight to the government, financial institutions, and the public regarding the condition of financial system stability before and during the Covid-19 pandemic. This research suggests that the government should control credit restructuring policies during the pandemic and strengthen financial institutions. This research has limitations in terms of objects that only include conventional financial institutions. Further studies can use other objects such as Islamic financial institutions.

COMPARISON OF SHARIA BUSINESS LAW OPINIONS ON FINE SANCTIONS FOR LATE PAYMENT OF INSTALLMENTS IN SHARIA FINANCIAL INSTITUTIONS

Islamic Financial Institutions are financial institutions whose operations are based on Sharia principles or Islamic legal rules in the financial transactions that are carried out. Closely to conventional financial institutions, fines for late payment of installments by customers are also applied by Islamic financial institutions whose legality refers to the DSN-MUI fatwa on sanctions against capable customers who delay payments. The issue of fines eventually creates problems and debates on its legality and relevance to sharia principles. This research aimed to compare sharia business law opinions on issues of fines for late installment payments at Islamic financial institutions. The research method employed was normative legal research with a comparative approach. The research results revealed the difference of opinions on the existence and legal status of these fines in Islamic financial institutions. Leastwise, there are two legal opinions: (1) it is permissible on condition that fines are only given to capable customers who delay payments (under specific criteria, not absolute permissibility) and that fines must be designated as social funds. Meanwhile, (2) disapproving opinion to assume that this fine is similar to usury; hence, it is forbidden.