Why islamic banking in indonesia does not use profit sharing

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Reference no: EM132771387

Although both are used in the calculation of profit sharing, there are several conditions that must be known before entering into a business cooperation contract. So that there are no disputes when it comes time to share the profits later.

That is why the selection of a profit sharing calculation mechanism needs to be agreed upon before entering into a business cooperation agreement using the mudharabah principle.
Sharia banking does not use interest or interest practices. Savings owners, depositors or mudharabah checking account holders will get a share of the profits.
And it turns out that the Sharia Bank business profit sharing scheme does not use profit sharing and revenue sharing, but net revenue sharing. This is in accordance with the direction of the Indonesian Ulema Council on the fatwa regarding the principle of distribution of business results in Islamic financial institutions, no 15 of 2000.

Problem 1: Analyze why Islamic banking in Indonesia does not use profit sharing or revenue sharing? And explain the principles of transactions that use profit sharing.

Reference no: EM132771387

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