Contract agreement model formurabahahfinancing in Indonesia Islamic banking

Permata Wulandari, Niken Iwani Surya Putri, Salina Kassim and Liyu Adikasari Sulung

International Journal of Islamic and Middle Eastern Finance and Management, 2016, vol. 9, issue 2, 190-204

Abstract: Purpose - The purpose of this paper is to measure the pattern of contract agreement process to map various banks’ position in perceivingShariaconduct. This is done by incorporating the dynamics of culture, market demand andSharialiteracy in different banks. Finding of this research will serve as the formula to map the latent degree of Islamic bank’s commitment to their strategic vision and identity as an Islamic-based financial institution. Design/methodology/approach - This research develops its theoretical background in classical and contemporary literature review onmurabahahcontract in Islamic perspective. Focus group discussion (FGD) and in-depth interview are conducted on 32 bankers (in 14 Islamic banks), two National Sharia Council, five academicians and three central bank representatives as an input for qualitative analysis. Content analysis is utilized in this paper to emphasize the process of discovering the relationship between dynamic factors affecting contract agreement process inmurabahahscheme in Indonesian banking. Findings - There are four dimensions affecting the contract agreement: fairness to customer, country regulation, perceived business practicality and product characteristic. The four dimensions are assumed to be influenced with categories proposed, as the category item is mostly repeated and is perceived to be significant in the participant’s perspective. Originality/value - This research will be beneficial in mapping the determinant of degree ofShariacompliance inShariabanking in Indonesia, focusing on the contract agreement process.

Keywords: Indonesia; Islamic banking; Qualitative analysis; Contract agreement; Murabaha financing (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:imefmp:v:9:y:2016:i:2:p:190-204

DOI: 10.1108/IMEFM-01-2015-0001

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