Pilgrimage Saving in Conventional Bank

              The implementation of Islamic value in overall aspects of human life is obliged, even though in social, politic, and economy. But, unfortunately the phenomenon nowadays shows that the values ​​of Islam as a whole have not been implemented in various aspects of life. One of examples is in the economic aspect that is the pilgrimage savings in conventional banks. Pilgrimage is one of ways of worshiping Allah, so that we have to concern and observe about the saving system we use with. The interest system that applied by conventional bank is uncertain because it equals usury and the prohibition of usury appears explicitly in Holy Qur’an. Qur’an is the undisputed source of guidance for the whole Muslims. Usury is not an equitable form of transaction. It is unlawful and inflicts financial loss. It creates social inequality and diversity between the rich and the poor, because its profit always flows to the rich. The pilgrimage saving in the conventional bank is being debated nowadays because Islam prohibits the application of interest system.

            Bank is financial institution which has principle business in money distribution and responsibility in money circulation. Specifically, conventional bank is a bank that has the same obligations conventionally. A bank acts as intermediary between customers with surplus capital to those with capital deficits (2011). It collects funds to be distributed to the general public who require such funds. Basically, bank has a significant position and role towards countries that are trying to improve their economic, especially in the association with economic contacts of other countries. Conventional principles applied by conventional bank contain of two methods, those are: first is define interest as prices, both for products such as saving deposits, term deposits, and loan products (credits) granted under certain interest rate. Second is implement a costing system called fee-based by using a fee for the use of service of other banks.

            In the conventional banks the importance of shareholder is to optimize interest rate difference between the interest rates on deposits and loans, in other side lenders expect a high interest savings, whereas debitors expect low interest rate. So that conventional bank is an intermediary between these parties. As for bank is an institution, it has systematic management aimed for obtaining gains. It applies the interest system determined in the contract time and profitable for bank. Its percentage is based on the amount of money or capital lent. Total of interest payments are not binding even though the amount of gain multiplied when economic conditions are good. Because of this interest system, conventional bank is being debated nowadays.

            Economic aspects should be in accordance with Islamic principles which prohibit usury system of interest. Therefore, Islam proposed one another bank system, profit loss sharing system. It is allowable banking system because it does not implement the system of interest in all activities while the conventional bank just the opposite. This is a significant difference between the two systems, where to avoid interest the system which is being developed is the buying and partnerships undertaken in the form of profit-sharing. In the allowable banking system, client funds are managed in the form of a deposit or investment. The funds deposited in this system are highly liquid because it is based on the concept that bank must be able to fulfill any customers need. High liquidity makes funds deposited less qualified as an investment that requires the deposition of funds (2012). Whereas if customer funds are invested, because the concept of investment is business risk, meaning that in every opportunity to take advantages of the business conducted, there is also a risk to accept a loss, so that between the customer and the bank equally share both benefits and risks. In accordance with the function of the bank as an intermediary, the institution of money distribution from depositors to borrowers, customer funds collected by deposit or investment and used for commercial transactions that allowed. The benefits as result from the use of customer funds which are channeled into efforts, which will be distributed to customers. So, the concept of sharing can only work if the client funds in the bank are invested into the business, then the business profit shared, whereas the deposits of customers in conventional bank no matter whether the savings channeled into the business or not, banks are still required to pay the interest. Thus the profit-sharing system makes the size of the profits received by the customer equals to the size of bank profits. In this system the customers get the benefits from sharing agreement. This sharing agreement is determined by a number of profit sharing ratios. The ratio of profit sharing between the bank and its customers is determined in advance, for example assume that each party's share is 60:40, which means that the results obtained will be distributable by 60% to customers and 40% for banks. In the organizational structure of an Islamic bank has a Sharia Supervisory Board (DPS). DPS oversees all activities of the bank in order to always be in accordance with the principles of Sharia. The sample of banks which implement the profit loss sharing system are Muamalat, Sharia Mandiri, Sharia BNI, Sharia BCA, Sharia Bukopin, and so on.

            The different perception on interest system and allowable banking system stimulates a debate on thestatus of the interest system in Islam between ulama’. They debate whether interest is allowed or not, although the prohibition of usury is listed in Qur’an. They have their own opinions and perspectives upon interest system. Some of them say that interest equals usury and therefore it is prohibited, while others just the contrary. There are many reasons from ulama’ ahli fiqh who allow the application of interest system in conventional bank, those are: (a) the interest is not usury which is prohibited as it is mentioned in the Quran and Hadits, (b) the usury is multiplied interest; while bank interest lent is not that case. Sayyid Muhammad Thanthawi (via Jejen, 2012) said that conventional bank or deposit is allowed and lawful in its various forms with the interest determination. According to him, beside the determination will avoid any dispute or deception in the future, as well as determination of interest is made ​​after careful calculation, and applied between the customer and the bank on the basis of their willingness. Dr. Abdullah Ibrahim Al Nasir (via Jejen, 2012) said Islam cannot exist without economic power, and no economic power is sustained without banks, whereas no banking without usury. Banking system has clear differences with usury that prohibited in the noble Qur'an, because interest is a new system or muamalah, it means that the law is not listed in Qur'an which explains about the prohibition of usury. According to the decision of Majma al-Buhust al-Islamiyah 2002 that advance determination of benefits to those who invest their money through banks or non-banks is lawful and no doubtful in the transaction, as long as both parties are willing to such form transactions.

             Ulama’ who decide interest system is unlawful and prohibited have also specific reason related to the verses of Qur’an. Interest has some characteristics, those are: determination of interest at the time the contract was made with the assumption should always be profitable, amount of percentage based on the amount of money (capital) lent, fixed interest payments as promised without any consideration of whether the project executed by the client is profit or loss, interest payment amount is not increased even though the number of profits multiplied, the existence of interest is doubtful ( Gema Insani Press, 2001). From those characteristics, majority of ulama decided interest equals usury and therefore prohibited. According to Meeting of 150 Ulama 'in the Islamic research conference in Muharram 1385 H (May 1965) in Cairo, Egypt suggested that any advantage over various kinds of loans, all are practices of forbidden usury including bank interest. Majma'al Fiqh al-Islamy, OIC Countries held in Jeddah on June 10-16 of Rabi’ul Awwal 1406 H/22 of December 1985 has the same decision that interest is not allowed. According to National Fatwa Shari’ah Board (DSN) Indonesian Ulama Council (MUI) of 2000 which states that bank interest is not in accordance with the Shari'ah principles.

            There are two groups of opinion about pilgrimage savings in conventional banks. This case is due to the doubtful interest in conventional banking system. The first group opines that interest system is allowed because it is not kind of usury and determination of benefits to those who invest their money through banks or non-banks is lawful and no doubtful in the transaction, as long as both parties are willing to such form transactions. Whereas the second opines that bank interest equals usury because it is included to multiply interest. The appearance of usury prohibition in Holy Qur’an confirms this statement. Thus, the pilgrimage saving in the conventional bank is being debated nowadays because Islam prohibits the application of interest system. Islam prohibits the use of money for money, money is just for the exchange rate and because the amount of interest is determinated at the contract time without knowing whether this effort will gain or suffer of loss. Usury is uncertain thing (gharar) in Islam. It is unlawful and inflicts financial loss because it always flows to the rich. As Muslims we have to concern about the saving system we use with in order to avoid bans on sharia. We already know that Islam prohibits usury as it appears in Holy Qur’an, so that we have to avoid what to be prohibited by sharia and take a better way to implement Islamic values in aspects of life.

 

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