An Investigation on Islamic Bank Selection Criteria (By : Firda Afwa Arifiana)

Islamic banking system has emerged as a competitive and a viable substitute for the conventional system during the last three decades. Nevertheless, the situation now has become more challenging since more conventional banks have participated in offering similar Islamic based services when Central Bank introduced Islamic Banking scheme (IBS) in March 1993. In term of products and services, there are more than 40 Islamic financial products and services that may be offered by the banks using various Islamic concepts such as Mudharabah, Musyarakah, Murabahah, Al-Bai Bithaman Ajil, Al-Ijrah, Al-Takjiri, Qard Hasan, Al-Wakalah, Al- Kafalah and Wadiah (Haron, Ahmad and Planisek, 1994).

a.  Mudharabah Mudharabah contract is a profit sharing contract between the entrepreneur and the capital provider in which the capital provider agrees to finance the entrepreneur’s projects according to a predetermined ratio agreed upon between the two parties. Any loss incurred will be borne by the capital provider.

b.      Musyarakah This is an agreement between two or more partners whereby each party provides funds to be used in a venture. Profits made are shared between the partners according to the invested capital. Each partner may or may not participate in carrying out the business. In the case of loss, all partners bear the loss according to their portion of shares in the financing arrangement. A working partner will get a greater share profit compared to a sleeping partner.

c.       Murabahah This is basically the sale of goods at a price which includes a profit margin agreed to by both parties. The selling price and the profit margin must be clearly stated at the time of the sale agreement under which the lender buys the goods wanted by the borrower for resale to the borrower at a higher price agreed by both parties. The bank cannot charge additional profit on late payments. However, the assets remain as a mortgage with the bank until the default is settled.

d.      Al-Bai Bithaman Ajil This is a variant of the concept of Murabahah, whereby the borrower is allowed to defer settlement of the payment for the goods purchased within the period, and in the manner, determined and agreed upon by both parties.

e.      Al-Ijarah This is the Shariah’s concept of leasing finance whereby the bank purchases the asset required by the customer and then makes available to the customer the usage of the assets or equipments such as plants, office automation, or motor vehicles for a fixed period and price according to the terms and conditions that have been agreed upon by both parties.

f.        Al-Takjiri This is a variant of the concept of Al-Ijarah which, however, provides for the acquisition of the leased assets by the leasee.

g.      Qard Hasan This is a “benevolent loan” which obliges a borrower to repay the lender the pricipal sum borrowed on maturity of the loan. However, the borrower has the discretion to reward the lender for his/her loan by paying any sum over and above the amount of the principal.

h.       Al-Wakalah This is an agreement between a customer and his/her bank in which the former appoints the latter as his/her agent in undertaking a certain transaction on his/her behalf.

i.         Al-Kafalah

This is an agreement between a customer and the bank whereby the latter guarantees the fulfillment of the obligation of the former to a third party.

j.        Wadiah This is an agreement to deposit an asset, excluding immovable fixed assets, in the custody of another party who is not the owner, or any such asset deposited with a non-owner for custody. The bank is deemed as a keeper and trustee of funds. A person deposits funds in the bank and when the depositors demands it, the bank guarantees the refund of the entire amount of the deposits.[1]

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[1] Almossawi, M, 2001. Bank selection criteria employed by college students in Bahrain: an empirical analysis. International Journal of Bank Marketing, 19, 115-125.

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Bank Marketing Concept

The bank marketing is a specialized field of the marketing and it has emerged following the extensive development of the general marketing and following the appearance, development, separation, delimitation, deepening and specialization of services marketing. The bank marketing concept evolved following the significant increase in the developed countries of the financial sector and implicitly the banking sector due to the appearance of new competitors, the market overcapacity and the competition intensification.

The bank marketing is "the marketing that applies in the universal banks ’ field (commercial banks as: savings and cooperative banks) and in the specialized banks ’ field (actual credit institutions, investment companies, etc.). Besides the insurance companies and savings institutions for constructions, the banks are the most important offerers on the market of financial services. Today, on the market of bank services, there is a powerful competition, the transparency is more pronounced and the customers have become more critical and less fastidious, being better informed about the monetary and financial issues, but also better advised for this purpose. Therefore, many banks admitted the need to develop and implement professional and efficient bank marketing in the relationship with their own private customers".

In the specialty literature, the bank marketing is also called marketing for services or for immaterial goods. Compared to other services, the banking products are distinguished by the fact that they are complex and abstract . Most of the customers do not easily understand what the financial services consist in, what benefit they bring and how they can be distinguished from one another. [1]

To this we can add the fact that the benefit of a banking service, for example a consultancy for the acquisition of a mortgage loan, for the placement of some shares or a funding for the execution of a construction, is exposed to an external insecurity , more than the other goods. The factors that influence these situations are the following: the evolution of national and world economy and the evolution of banking, monetary and capital markets. The exogenous insecurity and the immateriality generate a very high qualitative insecurity of the banking products for customers. Most of the banking products are mainly integrating , meaning that the customer takes part, more or less actively, in their realization.

For banking services, the specialist Kaas K.P. emphasizes the importance of the customers giving some information about the standard financial data (income and patrimony), about their financial objectives for life planning, about their attitude towards risk , about the intended period of the commitment, etc. in interaction with the bank employees. The immateriality and the abstractization of the banking services lead to the fact that, compared to the offerers of material goods; it is more difficult for a bank to create lasting competition advantages. The innovating products, for example a special savings contract or a chip card, cannot be protected against the competition by patents or property know-how. A bank can create competition advantages by a high quality of the services , customer orientation and customer loyalty development . To that effect, resources are needed which, on short term, are not available to all competitors. Examples to that effect are the customers carefully chosen, formed and motivated to serve the customers in an exceptional manner and also the information systems which allow the bank to optimally adapt its services to customer needs and restrictions  . [2]

The contemporary specialty literature shows numerous definitions of the bank marketing, more or less different, on the one hand due to the development level of the banking market and of the economy in the author’s origin country and on the other hand due to the viewpoint in which the concept has been approached and perceived.  The English specialists C. Ennew, T. Watkins and M. Wright, in their writing "Marketing Financial Services", considered that the bank marketing concept implies “ the achievement of the bank objectives by establishing the needs and wishes of the target customers and the supply of the needed satisfaction in a more efficient manner than their competitors". Another Belgian specialist Claessens R., in his writing "Marketing of retail banking products" stated that "The banks should identify the future needs and wishes of the customers and should use their own services and distribution channels in order to efficiently develop the integrated marketing concept on long term".

 By : Firda Afwa Arifiana (11220011)

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[1] Odobescu E., Marketingul bancar modern  , (Sigma, Bucure,  2007), 17

[2] . Claessens R, Marketing of retail banking products-From “Theory” to Practice & Strategic planning implementation , (U.B.I. Brussels, 2004), 16

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Talking About The Intellectual Property Rights

case :
     The Institute for Motivational Living , Inc. . ( IML ) , publishing and technology company based in the U.S. , announced that it has won a lawsuit for copyright infringement against Infigy Group , and a senior consultant and trainer in Infigy , Mr. Didik Mulato . Infigy Group ( http://www.infigygroup.com ) is the Product Marketing Group Prudential Insurance according to their website .

     The verdict given by the judges of the Commercial Court in Surabaya , Indonesia determined that the defendant had violated copyright IML and IML is stated that the copyright holder is legitimately the DISC Personality Profile System . Lawsuits focus on copying and distribution of copyrighted materials by the IML IML without the consent of the defendant . Defendant offers IML materials for free as part of a strategy that people use to gain an understanding DISC personality style in the defendant's business processes . IML managed to convince that they have suffered a loss of income since the defendant gave IML intellectual property rights to be traded . IML , author and publisher , has registered a variety of materials with the U.S. Copyright Office previously used by the defendant . Indonesian law also includes a copyright claim on breach of copyright and further investigation is being carried out on offense .

REF :

http://artikelhki.blogspot.com/2012/05/kasus-pelanggaran-hak-cipta-iml-dan.html

comment :

in the protection of intellectual property rights which may occur during the dispute are the injured party and the complaint to the appropriate authorities.
the penalties were not a few, in addition to exciting products that have been issued also to pay compensation.

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Talking About The Investment

     Investment or investment is a capital investment that is given by individuals or companies or organizations both in the country and abroad. Factors that may affect the investment to be considered investor in making an investment, among others: First factor of Natural Resources, Human Resources Both factors, three factors of political and economic stability, in order to ensure certainty in business, government policy factors Fourth, Fifth convenience factor in peizinan.

     Government issued Foreign Investment Law (Law no. 1/1967) to attract foreign investment to build the national economy. In Indonesia is authorized Coordinating Board (BKPM) to give approval for foreign direct investment.

     But in terms of domestic investment, the Government issued Provisions on regulated under the Investment Law. 25 of 2005 on Investment. that later in the Law. 25 , 2005, in which is set for foreign investors

REF :

http://pemudadepok.blogspot.com/2012/03/artikel-9-investasi-dan-penanaman-modal.html

comment :

in my opinion, the unification of the law for domestic investors and foreign investors are very unfair.
for domestic investors are mostly not supported that much money should be given leniency.
but for foreign investors who have sufficient financial resources, should be given more duties.

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Talking About The Tax

Taxpayer Rights
Taxpayer rights set forth in the tax laws are as follows .

    The right to receive coaching and guidance from the tax authorities
This right is a logical consequence of emergency self-assessment system that requires taxpayers to calculate , account for , and pay taxes themselves . To be able to implement the system of course it is a priority of all existing rights of taxpayers .
2 . Right to correct (SPT )
Taxpayer may SPT revision if there is an error or mistake , provided not exceed a period of two (2 ) years after the expiration of the tax , part of the tax year , or tax year and the tax authorities have not done the inspection.
3 . Right to extend the deadline for submission of tax returns
Taxpayers may request to delay submission of tax returns with the DGT convey the reasons in writing before the due date .
4 . The right to defer payment of tax or installment
Taxpayers can apply for a deferment or installment payment of taxes to the Tax Director in writing with the reasons therefor. This delay does not eliminate interest penalties .
5 . The right to recover the excess payment of tax
Taxpayers who have a tax overpayment may apply for refund or restitution . After a thorough examination will be issued Letter of Tax Overpayment ( SKPLB ) .
6 . Rights of objection and appeal
Taxpayers who are not satisfied with the assessment that has been issued may appeal to the Tax Office ( KPP ) where WP are listed . If the taxpayer is not satisfied with the decision of the taxpayer objection may appeal to the Tax Court .


Taxpayer obligations
Taxpayer obligations set forth in the tax laws are as follows .
1 . Obligation to enroll
Article 2 of the Law CTP assert that any taxpayer required to register with the Directorate General of Taxation whose jurisdiction covers the place of residence or domicile of the taxpayer and given to him Taxpayer Identification Number ( TIN ) . Specifically for entrepreneurs to be taxed by VAT law , is obliged to report his attempt to be confirmed as a Taxable Person ( PKP ) .
2 . Obligation to fill and submit the Notice
Article 3 paragraph ( 1 ) of the Constitution CTP confirms that every taxpayer must fill (SPT ) in Indonesian , and convey to the tax office where the taxpayer is registered .
3 . Obligation to pay or deposit taxes
Obligation to pay or deposit the taxes done in the state by means of the post office or bank state / local enterprises or places other payment determined by the Minister of Finance .
4 . Obligation to make books or records
For the individual taxpayer conducting business or professional services and corporate taxpayer in Indonesia are required to make book-keeping ( Article 28 paragraph ( 1 ) ) . While the recording is done by an individual taxpayer conducting business or professional services are permitted to calculate the net income using the Deemed Net and individual taxpayers who do not do business or professional services .
5 . Obligation to obey the tax audit
Against Taxpayers are examined , must comply with the provisions in the context of tax audits , for example, shows the taxpayer and / or lend books or records and other documents relating to income earned ; provide opportunities or entering the room where it is deemed necessary and provide assistance in order to smooth the examination , as well as provide the information needed by tax inspectors .
6 . The obligation to make cuts or tax collection
Taxpayers who act as employers or event organizer shall collect tax on payments made and deposited into the state treasury . This is in accordance with the principle of withholding system .
7 . Obligation to make tax invoice
Every taxable entrepreneur must make a tax invoice for each delivery of taxable goods or taxable services . Taxable invoice made ​​is evidence that tax collection is done by PKP .

REF :
Erly Suandy, Hukum Pajak, Edisi 5 , Salemba Empat, 2011, hlm. 119

comment :
I think, knowing the rights and obligations of taxpayers is very important. because taxpayers understand their rights would provide legal guarantees for taxpayers above what would be gained.
and for liability, it is important to keep the taxpayer from his duties as a good citizen.

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Talking About The Law

     term administration of state and government based on a dictionary term and growing among scholars.

a. Administration refers to the third sense , the activities related to governance Prajudi Atmosudirdjo argued that the state administration has three meanings , namely ;

    As one of the functions of government ;

    As officers and officials of the government ;

    As a government process that requires specific cooperation .

     According Bintoro Tjokroamidjojo State administration is the management and organization of the humans and equipment in order to achieve the objectives of the government . " Sondra P. Siagian State administration defines as " the overall activities performed by the entire government apparatus of the state in an effort to achieve the goals of the State" . EUtrecht mentioned that the State is a combined administration offices , apparatus ( equipment ) under the administrative leadership of government do most of the work of the government , according Dimock & Dimock , the administration of the activities of the State is the State in implementing power -

     political power , in the narrow sense , the activities of the executive and the judiciary and especially the activities of the executive branch in implementing the government alone . " Mustafa Bahsan interpreted as a joint state administrative positions are formed and arranged in stages and was assigned to do most of the work of the government in the broad sense , which was not submitted to agencies legislature and judiciary bodies . It's clear from some of the opinion it can be known that the State is adminisrtasi " Overall government officials who carry out activities or tasks in addition to the task of making the State laws and court "

b . Government

     State government as fittings can be interpreted broadly and in a narrow sense . Government in the broad sense it encompasses all State fittings , which principally consists of the branches of the executive, legislative , and judicial or completeness tools Other countries are acting for and on behalf of the State , while in the narrow sense of the government is the executive branch .

     Government in the narrow sense is an organ / State fittings assigned the duty of government or implementing legislation , while in the broad sense covers all entities that hold all the power in both countries eksekutuf and legislative and judicial branches . Mentioned in the literature mentioned that the term governance has two senses , namely seabagai function and as an organization .

Government as a function is : perform the duties of government , as a government organ is a collection of organs and government organizations are burdened with the implementation of governmental duties .

b . Government as an organization is : if we study the provisions of the organizational structure , including the function , assignment , authority , responsibilities of each government departments , agencies , institutions and government agencies .

 

REF  :
RIDWAN HR, HUKUM ADMINISTRASI NEGARA Jakarta ;2004

 

comment :

I think there is a difference between the terms governing state administration. learn about the system of state administration authority of the state agency. however, the government learned about the system of government. thank you

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From Theory to Practice in Islamic Economics System

There's a hadith saying like this:

"It will come at a time man (when) no one among them who are not going to take (property) usury. Anyone who (try to) do not eat it, then he will remain exposed to dust (usury) it " (Reported by Ibn Majah, Sunan Abu Dawud, Al-Nasa'i from Abu Hurairah).

The fatwa of Indonesian Ulama Council determines that interest in Banking is Haram. By appearing Islamic Banking is expected to be able this problem. We already know that we often think that Islamic Banking cannot be released from usury in full. Although its name is Islamic Banking, but the implementation doesn't fit in full with the theory. 

So, I think in this era has included to what that hadith says, by seeing the implementation of Islamic Banking that is enough difficult to match with the theory. Just not in Banking, i think the other transaction is also possibility to has usury system in it.

Regardless of the criticism of some people who claim that banks and Islamic financial industry has not yet fully-Sharai, I think it's better to use of which has been striving toward this Sharai than the blatant ignoring this fatwa usury.

(Mudawamah - 11220079)

Reference: FATWA MAJELIS ULAMA INDONESIA Nomor 1 Tahun 2004 Tentang BUNGA

Muhammad Syafi’I Antonio, Bank Syariah: Dari Teori ke Praktek, (Jakarta: Gema Insani Press, 2001)

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Broker In Islamic Perspective

Intermediary in the sale or broker in Islamic term is called simsar , ie someone who sells other people's stuff on the basis that a person will be rewarded by the have the goods in accordance with its business. According to Sayyid Sabiq intermediaries (simsar) is a person who is the intermediary between the seller and buyer to expedite the transaction. By the intermediary of the seller and the buyer in the transaction will be easier , better deals and in-kind services in the form . In other words broker ( simsar ) is the mediator between the buyer and seller to facilitate the sale.

Depending on the requirements or the provisions of the Commercial Code applies today . They served as an intermediary in the trade off merchandise, either on its own behalf or on behalf of the company that owns the goods.
Trading with simsar is permitted by religious if in the implementation of the fraud is not one against the other .
According to Ibn Abbas : " Never mind, someone said : " Sell it for so many clothes , if more advantages for you ". Ibn Sirin argues: " If someone says : " Sell this item with the price so , ( if so) , the excess for you or the two of us ", it's permitted.

So, in Islamic perspective, broker is not a big deal to be applied to make easier our trading activity.

Reference: Sabiq, Sayyid. 1996. Fikih Sunnah Jilid 12. diterjemahkan oleh Kamaluddin A. Marzuki, dkk. Bandung: Alma’arif

(Mudawamah - 11220079)

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