Nahdlatul Ulama (NU) jurists concluded Thursday that not all sharia bank transactions are haram despite the banks claiming to have adopted what they call a “sharia system”.
The panel of 300 ruled that transactions were deemed haram when investors or depositors did not know the calculation mechanism of profit-sharing percentages when making deals with sharia banks.
“It will also be haram if sharia banks commit fraud with funds,” cleric Cholil Nafis, who presided over the meeting of jurists during the NU national leadership congress in Makassar, South Sulawesi.
The meeting to discuss various contemporary religious issues was attended by sharia experts from all NU branches across Indonesia.
Cholil said the jurists agreed that making transactions with sharia banks in the country was allowed under Islamic law only when customers are aware of the profit-sharing calculation mechanism and financial audit outcome from the banks.
“Transaction results are haram if a sharia bank cheats customers,” added Cholil, who is a deputy chairman of NU’s contemporary religious issues division.
The jurists argued that in reality all sharia banks in Indonesia had not yet fully implemented the halal funds management under sharia law, and that Islamic institutions lacked the ability to verify funds management by sharia banks.
“It is still possible that the funds from sharia banks’ investors are managed or invested in haram ways by banks,” Cholil said.
Depositors usually did not realize about the matter, he added, as the initial process of the investment usually appeared halal.
“When a depositor first invests funds with a sharia bank, everything might look fine and halal.
Problems may occur afterward, when the bank invests the funds in various investment schemes,” he explained.
In Indonesia, each sharia bank implements a unique method of profit-sharing calculation, making it harder for Muslim customers to determine whether their funds are managed in halal ways.
As the largest Muslim-majority country in the world, Indonesia is, potentially, sharia banking’s biggest market.
Data from Bank Indonesia shows that there are currently about 1,500 sharia bank branches across the country, lending Rp 326 billion (US$35.7 million) in for micro and small-scale firms as of the end of 2008.
The panel also ruled that electronic trade transactions are haram unless they are financially beneficial to all parties involved and the commodities sold or services provided are proven fine.
Beside sharia banking issues, the same meeting also ruled that Islamic marriages via electronic devices, including teleconference systems, were haram because they did not meet all sharia requirements.
The NU jurists also deliberated other issues such as phone wiretapping, the sharing of cemeteries between Muslims and non-Muslims, sea fishing and the minimum age to marry.
On Thursday the conference also heard the accountability report of chairman Hasyim Muzadi. All the 33 provincial chapters of NU unanimously accepted the report.
Significant criticism was voiced by Yogyakarta and South Sulawesi chapters, who lashed out at Hasyim for, among others, failing to stay out of practical politics.
Hasyim will end his second five-year term as NU executive body chairman during the conference and will now contest the top seat of its law-making body at the same forum.
The congress will elect the new executive body chairman, a position for which seven candidates are running, Masdar Farid Mas’udi, Salahuddin Wahid, Said Agil Siradj, Ahmad Bagja, Slamet Effendi Yusuf, Ali Maschan Moesa and Ulil Abshar-Abdalla.