CONVERTION OF DSN-MUI’S FATWA ON ISLAMIC BANKING TO BE THE NATIONAL LAW: A Comparative Study in Muslim Countries

Abstract

Islamic banks in Indonesia have been significantly developing since 2008. This development has yet been supported by operational regulations. Islamic Banks operational mostly refers to fatwa of DSN-MUI. However, those fatwas must be converted to the regulations of Bank Indonesia or Financial Services Authority (OJK) to have binding power. This article aims at describing DSN-MUI’s fatwa position as the fundamental law of Islamic Banking implementation. Besides, this article compares the position of ulama’s fatwa in implementing Islamic Bank in several Muslim countries. The article is originated from Doctrinal Legal research with conceptual and comparative approaches. The result shows that DSN-MUI;s fatwa position in implementing Islamic Banks is not yet operational because it must be first converted into the regulations of Bank Indonesia or OJK. Different condition found in other Muslim countries, ulama’s fatwa becomes the main reference for implementing Islamic Banks. This is because the country places ulama’s fatwa higher than banking authoritative.