Jual-Beli dan Perbankan Islam

1. Jual-BelidanPerbankan Islam

2. Topics covered • The business of Banking and Money Creation • Jual-belidanPerbankan Islam • Elemen2jual-beli • Is real Islamic Banking possible?

3. Money Quotes “Cara atau proses bank menciptauangadalahsangat-sangatmudahsehinggaaqalkitamenolaknya” “The process by which banks create money is so simple that the mind is repelled by it” John Kenneth Galbriath Economist

4. Money Quotes “Setiap kali bank membuatsatupinjamanbaru, kredit bank yang barudiadakan, -deposit baru- uang yang baruditerbitkan.” “Each time a bank makes a new loan, new bank credit is created -new deposits- brand new money.” Graham F. Towers; Governor Bank of Canada 1934-54

5. The business of banking and money creation

6. CORE The business of Banking ^ Where is the money? • The bank gives out millions in loans everyday; but • There is not much cash in the vault • Money is an accounting entry • Credit customer • Debit HQ • Money creation • New loan = New Money

7. Scenario – New Country Seignorage 2a. Payments for work & salaries 1a. New Money 1.Bonds 2b. 4b. Tax BANK CENTRAL 5a. Loans 3b. Tax 5b. Loans 4c. Safekeeping & loan payment Businesses Contractor Retailer 3c. Tax 4a. Purchases 3a Purchases. Employees

8. Scenario – New Country Seignorage 2a. Payments for work & salaries 1a.New Money 1.Bonds 2b. 4b. Tax BANK CENTRAL 5a. Loans 3b. Tax 5b. Loans 4c. Safekeeping & loan payment Businesses Contractor Retailer 3c. Tax 4a. Purchases 3a Purchases. Employees

9. CORE The business of Banking • Is LENDING • At an Interest ^ • Money creation Deposits 2% Loans 9% Gross Profit 7%

10. Deposit $10,000 90% loaned ($9,000) 10% Reserve ($900) 10% Reserve ($810) 10% Reserve ($1,000) 10% Reserve ($729) 90% loaned ($8,100) 90% loaned ($7,290) 90% loaned ($6,561)

11. FIRST BANKBalance Sheet • Money creation

12. Where is the MONEY??? Initial cash only $10.000 • Where will the borrowers get the additional money to pay interest to the bank?

13. Questions • How much actual cash is there in the system? • Where did the bank get the money to lend to the borrowers? • Where will the borrowers get the money to pay their interest? • What happens when all the customers wants to withdraw all their monies at the same time? Where is the money?

14. RiBA!!!

15. Bisnesadarisiko Weather • Risikoperniagaan/bisnes Transport Delivery Price Risk • Bank mengalihkanrisikobisneskepenghutang/debitur • Risiko bank hanyasi-penghutang • Jualaset yang dicagar • Dijadikanbankrut Risko Bisnes Supply Risk Payment Risk X Profit Rate ?? Risk Penghutang/Debitur

16. ….. merekaberkata (berpendapat) jualbeliitusamadenganriba, ….. padahal Allah telahmenghalalkanjual-beli (berniaga) danmengharamkanriba…. S Baqarah 2/275

17. Jualbelidanperbankanislam

18. Perbankan Islam ….. padahal Allah telahmenghalalkanjual-beli(berniaga) danmengharamkanriba…. • S Baqarah 2/275 Conventional Banking Perbankan Islam

19. All authorsIslamic Banks are different from Conventional Banks • Depositors are no longer lenders to the bank; they are shareholders in any activity in which the bank becomes involved; • The customers are potential investors through having a Profit/Loss share. They are no longer borrowers; • Through its engagement in PLS contracts, the bank becomes the partner of investors and, unlike its conventional counterpart, provides equity-capital rather than debt-capital

20. All authorsIslamic Banks are different from Conventional Banks • The profit and loss sharing arrangement between the bank and the customer on both sides of the balance sheet, which represents unique risk characteristics;

21. All authorsIslamic Banks are different from Conventional Banks • The nature of financial intermediation, including the function of banking, is different in the case of Islamic banks. • For Islamic banks the mudarabah contract is the cornerstoneof the financial intermediation and thus of banking. • The basic concept is that both funds mobilization and (in theory) funds utilization are on the same profit sharing among the depositors, the bank and the entrepreneur.

22. All authorsIslamic Banks are different from Conventional Banks • Islamic banks face significantly different risks as compared to an interest based conventional system/bank because they operate primarily on profit sharing basis …

23. All authorsIslamic Banks are different from Conventional Banks • Compared to conventional banks, if you were to obtain as Islamic loan for a project, instead of being charged interest for the loan, you could be paying fees or sharing a portion of your profits for the project with the bank.

24. Cornerstone of a saleElemen2 jual-beli • For majority of Fuqaha’ • The seller/Penjual • The buyer/Pembeli • The language of the contract (offer and acceptance)/aqad • Object/barang • Price/Harga

25. Soalan • Apatujuankitake bank? • Apatujuankitake bank Islam? Perbankan Islam Conventional Banking

26. Islamic Banks using “MURABAHA TRADING” to create DEBT Bai al-’Inah (2party contract) I need a LOAN TRADING ??? or ILLUSION of Trading for purpose of DEBT creation? Cost + Profit rate Deferred payment DEBTOR Islamic BANK

27. 1 asset multiple sales X’s ?? • Not consumed, same item re-sold a thousand times • Financial market larger than real/physical market • Without rollover of underlying asset, there is NOT ENOUGH commodity to back IB transaction • Real trade ??

28. Tawarruq - 3 party sale Deferred sale Rp 50 jt + ku 10% x 10thn = Rp 105 jt Nasaba/Penghutang Bank Islam Di-beli Rp 50 jt Di-jual Rp 48 jt Penjual/Pembeli • Palm oil • Paladium • Batubara

29. 4 party sale Deferred sale Rp 50 jt + ku 10% x 10th = Rp 105 jt Nasaba/Penghutang Bank Islam Di-beli Rp 50 jt Di-jual Rp 48 jt • Palm oil • Paladium • Batubara Seller/Penjual Buyer/ Pembeli Product terbaru MusyarakahMutanakisah

30. TAWARRUQ? ContractumTrinius- 3 Party contract Fatwa by Church 900 years ago: HARAM!!! • Alegal trick used by European merchants in the Middle Ages as a method of circumventing usury, something that the Church fiercely opposed. • It was a combination of three separate contracts, • Individually deemed permissible by the Church, but which together yielded a fixed rate of return from the outset. • For example, • A might invest £100 in B for one year. • A would then sell back to B the right to any profit over and above say £30, for a fee of £15 to be paid by B. • Finally, A would insure himself against any loss of wealth by means of a third contract agreed with B at a cost to A of £5. • The result of these three simultaneously agreed contracts was an interest payment of £10 on a loan of £100 made by A to B.

31. Trading “Islamic Banking” way (actual) KartuKredit Islamic

32. Merely a process issue??? • Do I need the machine? • Where is the machine? • Does the machine really exists? • What is the condition of the machine? • Is the sale inclusive of the cash in the machine? • Possibility of same machine being sold to 2 or more people at the same time?

33. Elemen2 jual-beli (trade)

34. Intipatibisnes/berniaga Elements of TRADE Product, Trader (seller) & Consumer (buyer) BUYS SELLS Product=Cost Trader (mark-up) Buyer (end-user)

35. Intipatibisnes/berniaga ? Berniaga Untung RISiKO Ketidakpastian

36. Islamic Bank’s SOLUTION:Risk Transfer Weather • REMOVE THE TRADING RISK Transport Delivery Price Risk Risk Management Supply Risk Payment Risk X Profit Rate ?? Risk DEBiTOR Penghutang

37. ….. merekaberkata (berpendapat) jualbeliitusamadenganriba, ….. padahal Allah telahmenghalalkanjual-beli (berniaga) danmengharamkanriba…. S Baqarah 2/275

38. Islamic Banks and 30.000 abandoned housing projects • Where is the risk sharing of the Islamic banks? • Borrowers facing double jeopardy • Rumahbarutidakdapat • Hutangmestidibayar • Sewarumahjugamestibayar

39. Reality check < 3.8% of Islamic Banks income derived from profit/loss sharing products Research by UPM MBA student The core product - MURABAHA

40. Summary

41. 1. Riba • ….. Allah telahmenghalalkanjual-beli(berniaga) danmengharamkanriba…. • S Baqarah 2/275 • Bukansaja • bunga/penambahan/increase; atau • Elemen2 jual-beli • Penjual, pembeli, barang, tempat, harga • Participate dalamrisikotransaksiitujuga.

42. 2. Islamic? Halal? • Jual-beli • Kadar untung • Deferred sale Musolla CORE The business of Banking ^ Does a “ sales contract” makes banking halal? • Pinjaman • Bunga • Kredit

43. 3. QawaidFiqhiyyah BANK RIBA BANK ISLAM Europe America Hong Kong Can prostitution be legalised by nikahmut’ah using QF? Dengan QF Banking menjadi HALAL! Japan United Kingdom

44. 4. Riba: PRODUkatauSISTEM Perbankan ISLAM Bank RIBA

45. HARAM Sistemkewangan (Monetory System) Riba Bank Riba Bank Islam HALAL???

46. Is real islamic finance possible?

47. Is real Islamic Banking possible

48. Implementation • Implement the true lslamic finance within the fiat monetary system • Concurrently • Implement the Dinarius system

49. HARAM Sistemkewangan (Monetory System) Riba Dinar System Bank Riba Bank Islam Islamic Finance within the Fiat system HALAL???

50. Islamic Finance Projects 2 types of Fund Financing type Musyarakah Mudharabah No money creation Profit sharing 30% to 50% Risk sharing Still fiat money Mudharib P 1 For Investment Safekeeping only • Safekeeping • Charge a fee • Free • Investment Fund • By project • Pool of projects • Return – Profit or Loss • By project • Pool of projects P 2