The Implementation of Hybrid Contracts for Restructuring Non-Performing Financing in Sharia Banks

Setiawan, Iwan and Nurjaman, Muhamad Izazi and Herdiana, Nana (2022) The Implementation of Hybrid Contracts for Restructuring Non-Performing Financing in Sharia Banks. DINAR: Jurnal Ekonomi dan Keuangan Islam, 9 (1). pp. 63-73. ISSN : 2580-3565

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Abstract

Studies perusing the implementation of hybrid contracts for restructuring non-performing financing in sharia banks from the Fatwa in Indonesia are anticipated. Restructuring non-performing financing is one solution for maintaining financing performance, which is one of the most important contributors to Sharia banking revenue. However, it is difficult for Sharia banks to do so in practice because Sharia banks must consider the precautionary principle, which has implications for future risks. Furthermore, the use of hybrid. contracts in the restructuring mechanism for non-performing financing is critical to mitigating these risks. This study explores the implementation of hybrid contracts in the restructuring of non-performing financing in Sharia banks. This study examines the primary data source in the form of Legislation Fatwa National Sharia Board -Indonesian Council of Ulama (DSN-MUI) through a normative legal approach. The findings of this study indicate that the implementation of the hybrid contract in restructuring non -performing financing in Sharia banks provides several options of collected contracts (al-'uqud al-Mujtami'ah) such as a hybrid contract that combines the tabarru' (qordh) contract with the mu'awadhah contract (sale and purchase, ijarah, IMBT, mudharabah and musyarakah).

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