Product Innovation of Islamic Financial Institutions

Samsudin, Agus Rojak (2016) Product Innovation of Islamic Financial Institutions. International Journal of Nusantara Islam, 4 (1). pp. 29-38. ISSN online 2355-651X Print 2255-5904

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Abstract

This article was composed from the fact that the presence of sharia financial institutions (SFC) can not be separated from the existence of Conventional Financial Institutions. Islamic bank appeared in the midst of the development of conventional banks that have been there before. It certainly gives the impression of Islamic Bank along its products is an imitation of conventional banks. The historical analysis shows that the substantive functions of banking operations has been practiced since the early days of Islam. Even the lost and profit sharing principle has been applied to transactions mu'amalah Arabs Jahiliya, which is in the development of these principles legitimized it as a way out of the practice of usury is forbidden after the arrival of Islam. This is a reference of DSN MUI (National Sharia Council of Indonesian Council of Ulama [NSC-ICU]) and institutions to innovate and design products of Islamic banking.

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