Preference of Maqasid Al-Sharia Approach by the National Sharia
Board of the Indonesian Council of Ulama for Fatwa Arrangement in
Banking Field
Irham Zaki, Tika Widiastuti, Qudsi Fauzi, and Imron Mawardi
Sharia Economics Department, Universitas Airlangga, Jl. Airlangga No.4, Surabaya, Indonesia
Keywords: Banking Fatwa Arrangement, DSN MUI, Maqasid al-Sharia Approach.
Abstract: The rapid development of Islamic banking industry in Indonesia should be appreciated since it
becomes one of the forms of implementation and greatness of Islam propagation in the country
with the largest Muslim population in the world. The existence of various transaction models as
well as their derivation and innovation inevitably demands the concerned parties to be
accommodative and selective so that these developments can be responded and searched for the
solutions according to the sharia corridor. The National Sharia Board of the Indonesian Council
of Ulama (DSN MUI) is the only Indonesian official institution authorized for creating Islamic
economic and financial fatwa as well as monitoring the application in Islamic financial
institutions such as Islamic banks, insurances, and pawnshops. This research is the library
research thus the research employs the qualitative approach with the documentary study method,
and the analysis is the Critical Discourse Analysis. The focus or scope of the study is limited only
to the DSN fatwas in the banking field. The research results discover that the maqasid al-sharia
approach becomes one of the solutions of DSN MUI consideration in solving the considered
problems in the banking field.
1 INTRODUCTION
The awareness and resurgence to practice the
Islamic economy were indicated by the
establishment of the Islamic Development Bank in
1975, followed by the establishment of Islamic
financial institutions in different countries (Ahmad,
2003; Abdi, 2011). Particularly in Indonesia, it was
marked by the establishment of the Islamic bank in
1992. It was further followed by the emergence of
various sharia financial institutions in 1994,
pawnshops (sharia pawn service units) in 2003, and
so on (Lawrence, 2014) .
The appearance of Indonesian sharia financial
institutions followed by the variety of products they
offered brought out their own problems, which
means that the sharia of the products should be
ensured (Siddiqi, 2006; Hamisu and Hassan, 2017).
In responding to this, then the Indonesian Council of
Ulama (MUI) established a specific institution to
solve various economic and financial problems,
namely the National Sharia Board (DSN) (Ullah,
2014). DSN generally provided fatwas for various
problems related to the products and services of
sharia financial and economic institutions. Since its
establishment in 1999 to February 2017, DSN MUI
has issued 109 fatwas.
The initiation of the National Sharia Board of the
Indonesian Council of Ulama (DSN-MUI)
establishment started from the execution of Ulama
Workshop about Sharia Mutual Funds held by the
Central MUI on July 29-30, 1997, in Jakarta that
recommended the importance of an institution which
handles the problems related to the sharia financial
institution activities. This was then followed up by
MUI by conducting a meeting of the National Sharia
Board (DSN) Establishment Team on October 14,
1997. Eventually, MUI Board of Directors issued the
Decree No. Kep-754/MUI/II/1999 dated February
10, 1999, about the Establishment of the National
Sharia Board of MUI. Furthermore, the MUI Board
of Directors held the introductory event with the
administrators of DSN-MUI on February 15, 1999,
in Indonesia Hotel, Jakarta. Then, the administrators
of DSN-MUI held the Plenary Meeting I of DSN-
Zaki, I., Widiastuti, T., Fauzi, Q. and Maward, I.
Preference of Maqasid Al-Sharia Approach by the National Sharia Board of the Indonesian Council of Ulama for Fatwa Arrangement in Banking Field.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 207-212
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reser ved
207

MUI for the first time on April 1, 2000, in Jakarta by
approving the Basic Guidelines and the Household
Guidelines of DSN-MUI.
DSN MUI was created to actualize Muslims’
aspiration regarding the economic problems and to
encourage the application of Islamic teachings in the
economic and financial fields that are implemented
according to the guidance of Islamic law. The
establishment of DSN-MUI is the efficiency and
coordination step of the ulama in responding to the
issues related to the economic and financial
problems. The various problems or cases which
require fatwas will be accommodated and discussed
together so that the similarity of view in handling the
problems will be obtained by each of Sharia
Supervisory Board (DPS) in the sharia financial
institutions. To encourage the application of Islamic
teachings in the economic and financial life, DSN-
MUI will always play the proactive role in
responding to the dynamic development of
Indonesian society in the economic and financial
fields.
The duties and functions of DSN MUI are as
follow:
a. Issuing fatwas about sharia economy to be the
guidance for the practitioners and regulators.
b. Publishing the recommendation, certification,
and sharia approval for the sharia financial
institutions and business.
c. Conducting the supervision of sharia aspects of
products/services in the sharia financial
institution/business through the Sharia
Supervisory Board.
The authority of DSN MUI are as follow:
a) Issuing fatwas which bind the Sharia
Supervisory Board in each sharia financial
institution and become the basic legal action of
related parties.
b) Issuing fatwas which become the foundation of
the provisions/regulations issued by the
authorized institutions, such as the Finance
Department and Bank Indonesia.
c) Providing and/or revoking the recommendation
of names to be the Sharia Supervisory Board
(DPS) in a certain sharia financial institution
and business.
d) Inviting the experts to explain the problems
required in the sharia economy discussion,
including the domestic and foreign monetary
authorities/financial institutions.
e) Giving a warning for the sharia financial
institutions to cease the deviation from the
fatwas issued by the National Sharia Board.
f) Proposing for the authorized institutions to take
some action if the warning is not regarded.
Fatwa as the ijtihad result of ulama is created to
respond the existing questions or situations. A fatwa
is an opinion stated by ulama to participate in
solving the problems encountered by the society.
Associated with the fatwas of DSN MUI, there is its
own uniqueness in terms of the nature of fatwa as
the ijtihad result that does not bind the society
(Alsayyed, 2009). However, in the case of DSN
MUI fatwas, it the opposite that the fatwas bind the
parties engaged in the Islamic finance industry. The
fatwas produced by DSN MUI should not only be in
line with the sharia formal rules, yet it also should
bring the benefits for all parties, both the financial
institutions and Muslims in general. Wisdom and
profound knowledge are required for those who are
involved in the production of fatwas, so the fatwas
are expected to confirm to the sharia formal rules on
one side as well as provide productivity and
flexibility for the stakeholders on the other side. This
is one form of maslahah (benefit/public interest)
which becomes the essence of maqasid al-sharia
and even the sharia itself.
Linguistically, maqasid al-sharia consists of two
words, i.e., maqasid which means aim, and sharia
which means the teachings, the rules, and the law of
Allah that are passed down to His servants to reach
the prosperity in the world and the hereafter. By the
term, Muhammad Thahir Ibnu Asyur formulated the
definition of maqasid al-sharia as the purpose and
wisdom desired by the Sharia Maker (Allah) to all or
most of the sharia application, where the objectives
are not specific to a certain issue of Sharia law yet
are comprehensive (Mingka, 2013). The
word “maqasid” was initially employed by al-
Turmudzi al-Hakim, the ulama lived in the third
century of Hijriah (al-Raysuni, 1995).
Meanwhile, Imam Najmuddin al-Tufi put the
concept of maslahah (benefit/public interest) in the
highest position (Maimun, 2014). According to al-
Tufi, from 19 postulates of Islamic law, the strongest
is nash (al-Qur’an and Hadith) and ijma’ as long as
it corresponds to the maslahah, and if it is not
suitable then the maslahah should be prioritized
instead of nash and ijma’. The priority of maslahah
over nash and ijma’ is conducted by taking takhsis
(specialization) or bayan (explanation) for the
definition of nash or ijma’, not by postponing them,
just as putting sunnah over al-Qur’an first with
bayan.
According to Imam al-Ghazali, maqasid al-
sharia or the aim of sharia is improving the better
life of all humanity (Chapra, 2000). There are five
goals to obtain, i.e., through the protection of the
faith or religion (al-din), the soul (al-nafs), the
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intellectuality (al-‘aql), the descendant (al-nasl), and
the wealth (al-mal). These five goals of sharia can
be acquired by the effort of all human beings. In the
aim of sharia, the protection of the faith or religion is
placed first, since it can provide the worldview
which tends to affect the personality of all human
beings, their behaviors, lifestyle, tastes, preferences,
as well as attitude toward other humans, resources,
and environment. The religion will provide the
stability of the material and spiritual interests of
human beings. Besides, it can also be the moral
screen, so humans can use the resources more
preciously.
Al-Syatibi then divided maslahah into three
levels, i.e., dharuriyyat (primary), hajiyyat
(secondary), and tahsiniyyat (tertiary). Maqasid
or maslahat dharuriyyat is something that must exist
for the realization of the welfare of religion and the
world. If this does not exist, then it will cause
damages or the loss of life, such as eating, drinking,
salat, fasting, and other religious activities. The
maslahah or maqasid dharuriyyat consists of five
things, i.e., religion (al-din), soul (al-nafs),
descendant (an-nasl), wealth (al-mal), and mind (al-
‘aql).
The five dharuriyyat should be run in sequence.
For instance, maintaining al-din should be
prioritized first over maintaining others, or
maintaining al-nafs should be prioritized over al-
‘aql and al-nasl. For example, suicide or self-
destruction is prohibited, but if it is in the interest of
jihad and Allah’s religion, then it is permitted. This
happens because maintaining religion should be
prioritized over the soul. By the argumentation, then
most of the ulama permit istisyhad of the Palestinian
fighters with the legal consideration.
Maqasid or maslahat hajiyyat is something that
should exist in order to live more freely and avoid
any difficulties. If this does not exist, it will not
cause any damage or death, but it may cause
masyaqqah and narrowness. For example, in the
prayer issue, there is rukhsah in the form of salat
jama’ and qasar for the travelers. Maqasid or
maslahat tahsiniyyat is something that should exist
for the good deeds or politeness. If this does not
exist, it will not cause any damage or loss of things
and it will not cause masyaqqah in doing so, but it
will be considered as inappropriate regarding the
manners and courtesy, for example wearing clothes
for men.
The purpose of maqasid al-sharia are as follow
(Mingka, 2013):
a. As the basic of tasyri’. Everything that has been
appointed by Allah and His prophet attempts to
manifest the maslahah for every human being
and reject mudharat (damages), whether it is
acknowledged directly or even indirectly. All
orders and prohibitions of Allah and His
prophet are maqasid al-sharia, such as salat,
fasting, the prohibition of usury, the prohibition
of alcoholic beverages, and so on.
b. As the assisting tool of interpreting postulates.
Maqasid al-sharia or maslahah helps to
interpret and make the decision of wisdom
consisted in al-Qur’an and as-Sunnah. For
example, understanding hadith about talaqqi
rukban, tas’ir, and so on. Muhammad PBUH
forbids tas’ir, but as the time goes by where
there was a change in society’s economic
behavior, then Caliph Umar bin Khattab
allowed or even conducted tas’ir.
c. As the postulates of law. Maqasid al-sharia or
maslahah can be considered as sharia postulates
if there is no nash as the reference of law. For
example, the collection of al-Qur’an in one
mushaf during Caliph Abu Bakar era, the
uniformity of mushaf al-Qur’an in Caliph
Usman bin Affan era, and so on.
Therefore, it is fascinating to investigate the
tendency of DSN MUI in making such effort based
on the maqasid al-sharia approach.
2 METHODOLOGY
The approach employed in this research was the
qualitative approach, while the research type was the
library research, i.e., using library materials as the
text data resource. Since this was the qualitative
research, the focus of the analysis was the quality in
narrating results and discussion, although it did not
rule out to quantifying number or percentage to
support the research. This research focused on
scrutinizing the National Sharia Board of the
Indonesian Council of Ulama fatwas in banking
field which utilizes maqasid al-sharia approach as
the ijtihad method, not maqasid al-sharia as the
reference of tasyri’ or the aim of sharia.
The primary data resource of this research was
the fatwas issued by the National Sharia Board of
the Indonesian Council of Ulama, i.e., the fatwa no.
01/DSN-MUI/IV/2000 until 19/DSN-MUI/II/2017.
Furthermore, the secondary data resource was every
data aside from the primary data which supported
this research, such as books, journals, and anything
related or required for this research.
The employed data analysis was the discourse
analysis in achieving the accurate understanding
Preference of Maqasid Al-Sharia Approach by the National Sharia Board of the Indonesian Council of Ulama for Fatwa Arrangement in
Banking Field
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about maqasid al-sharia approach preference for the
consideration of DSN-MUI (the National Sharia
Board of the Indonesian Council of Ulama) in
creating the fatwas of economics and finance. The
discourse analysis takes the text interpretation more
into account rather than the sum of the category unit
like the content analysis. The basic of discourse
analysis is interpretation since the discourse analysis
is part of the interpretative method that counts on
interpretation and researcher’s analysis. Thus, during
the discourse analysis process, it does not require
coding sheets that will take some items or derivative
of a specific concept. This discourse analysis has the
pretention in focusing on the hidden message. The
discourse analysis does not only focus on the macro
level (the content of a text) but also the micro level
that compiles the text such as words, sentences,
expressions, and rhetorical. In the discourse analysis,
it is not only words or other content aspects that can
be coded, but the complex discourse structure can
also be analyzed in every description level
(Eriyanto, 2003).
3 RESULTS AND DISCUSSION
These are the DSN-MUI fatwas in banking field
which employ maqasid al-sharia approach, the first
is fatwa no. 14/DSN-MUI/IX/2000 about the
Distribution of Business Result System in the Sharia
Financial Institution (LKS). The fatwa of DSN MUI
decided that in the principle, LKS is permitted to use
the Accrual Basis or Cash Basis system in the
financial administration. From the maslahah aspect
(al-ashlah), during the recording, it is advised to
employ the Accrual Basis system; yet, in the
distribution of business results, it should be
determined based on the actual acceptance (cash
basis). The system setting that has been chosen
should be agreed upon in an agreement. The
consideration of maqasid al-sharia in this fatwa
refers to the hadith that also becomes the rule
reference, which is: “It is forbidden to harm your
own self and it is forbidden to harm the others.” In
the fiqh rule: “Where there is maslahah, there is
Allah’s law.” This fatwa attempts to provide the
maslahah solution for Islamic Financial Institution
in the financial administration, also to bridge Islamic
Financial Institution and other parties to equally take
the benefits from the agreement they agreed. Since
basically there is no nash that orders the distribution
of business result system or vice versa, no
prohibition regarding this.
The second is fatwa no. 16/DSN-MUI/IX/2000
about the Discount in Murabahah. This fatwa of
DSN MUI decided that the price (tsaman) in trading
is the amount that has been agreed by two parties,
either equal, higher, or even lower to the value
(qîmah) of things that will be the object of trading.
The price in murabahah trading is the trading price
and the required cost added with the benefit that
corresponds to the deal. If Islamic Financial
Institution obtains a discount from the supplier in the
trading process, the actual price is the price after
discount; thus, the discount is the rights of
customers. If the discount occurs after the
agreement, the discount will be conducted based on
the deal contained in the agreement. In the
agreement, the discount after the agreement should
be agreed and signed. The consideration of maqasid
al-sharia in this fatwa refers to the fiqh rule: “Where
there is maslahah, there is Allah’s law.” The
maslahah becomes the concern in deciding fatwa
about the murabahah discount. This is because there
is no nash that regulates the murabahah discount.
Thus, to avoid manipulation and fraud, the discount
which is the rights of the buyer will still be returned
to the buyer if it occurs before the agreement
between the bank and the client, and this is maqasid
al-sharia in the form of protecting the rights
(property) of the clients.
The third is fatwa no. 18/DSN-MUI/IX/2000
about the Backup of Earning Asset Deletion in
Islamic Financial Institution. In this fatwa, DSN
MUI decided that the backup is permitted to be
conducted by Islamic Financial Institution. The fund
used for the backup is taken from the profit section
that becomes the Islamic Financial Institution’ rights
thus this will not harm the client. In the tax
calculation, Islamic Financial Institution may
reserve all profits. Regarding the profit sharing, the
backup may only come from the share of profits that
Islamic Financial Institution entitles to. The
consideration of maqasid al-sharia in this fatwa
refers to the hadith that also becomes the rule
reference, which is: “It is forbidden to harm your
own self and it is forbidden to harm the others.” In
the fiqh rule: “The danger (heavy loads, losses)
should be eliminated.”, also the rule: “Where there is
maslahah, there is Allah’s law.” The maslahah and
the habit in financial institutions indeed require
backup as one of the attempts to minimize the risk of
losses that may happen. Since if it is violated, the
bank can be at risk, and this is categorized as the
danger that should be eliminated. There is no nash
that strictly regulates backup, whether orders or
prohibitions.
The fourth is fatwa no. 63/DSN-MUI/XII/2007
Bank Indonesia Sharia Certificate (SBIS). In this
fatwa, DSN MUI decided that SBIS is the valuable
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letter in the currency of Rupiah that is issued by
Bank Indonesia, which has the short time period
regarding the sharia principle. SBIS as the monetary
control may be issued to fulfill the requirement of
open market operation. Bank Indonesia give rewards
for the SBIS holder regarding the employed
agreement. Bank Indonesia shall return the fund of
SBIS to the holder during the due date. Sharia banks
may own SBIS to utilize the fund that has yet been
distributed to the real sector. The agreement that can
be used for the issuing of SBIS instrument is the
agreement of Mudharabah (Muqaradhah)/Qiradh,
Musyarakah, Ju’alah, Wadi’ah, Qardh, and
Wakalah. The consideration of maqasid al-sharia in
this fatwa refers to the rule, which is: “The action of
Imam (the authority holder) toward the society shall
follow the maslahah.” Also the rule: “The necessity
may occupy the emergency position.” There are
some maslahah aspects that can be the
consideration, i.e., in macro/state in the form of
monetary control related to inflation and its kind,
also the maslahah for banks and depositors using
funds that are not absorbed in the real sector.
The fifth is fatwa no. 87/DSN-MUI/XII/2012
about the Income Smoothing Method of the Third-
Party Funds. In this fatwa, DSN MUI decided that
the Income Smoothing Method with or without
forming the backup may be conducted in the Profit
Sharing of The Third-Party Funds (DPK) by
following the conditions in this fatwa, i.e., Islamic
Financial Institution may form the Reserve Fund
(PER) for anticipating the possibility of profit
sharing realization for the depositors under the
projected rate of return. In the principle, the Reserve
Fund may be formed through the allowance for
profit before being shared in the condition that the
actual profit share exceeds the projected rate of
return and with the DPK customer’s consent. The
Reserve Fund (PER) must not be formed by
reducing the profit which becomes the right of DPK
customer if the actual profit sharing is lower than the
projected rate of return. In the agreement of
Mudharabah Muqayyadah, the Reserve Fund (PER)
may be formed from the allowance for the profit of
the customer’s rights that is higher than the
projected rate of return after the profit sharing with
the permission of DPK customer. The Reserve Fund
formed by Islamic Financial Institution (IFI) from
the allowance for profit before profit sharing that
exceeds the projected rate of return is collectively
the DPK customer’s rights that should be managed
separately by IFI for the revenue management
process and the rate of return for the DPK customer.
The further arrangement and supervision of the
policy and the manifestation of IFI in the
establishment and the usage of the Reserve Fund
(PER) are the competence of the authorities. The
consideration of maqasid al-sharia in this fatwa
refers to the rule, which is: “Where there is
maslahah, there is Allah’s law.” Also the rule: “The
action of Imam (the authority holder) toward the
society shall follow the maslahah”. And the rule:
“The necessity may occupy the emergency
position.” Also: “Hajat does not allow a person to
take other's property.” DPK is the trust that should
be managed carefully by IFI, thus for the maslahah
and necessity/hajat, DSN MUI allows the income
smoothing, yet with the caution that it will not harm
the right of customers owning DPK.
The sixth one is fatwa no. 97/DSN-
MUI/XII/2015 about the Sharia Deposit Certificate
(SDS). In this fatwa, DSN MUI decided that the
issue of Sharia Deposit Certificate can be conducted
by the Mudharabah agreement. The issue of SDS
can only be conducted by Sharia Bank as the fund
manager (Mudharib). The SDS publisher shall
refund the SDS holder during the due date. The
profit sharing of issued SDS should be from the
business activities that are funded by SDS, both the
business activities that have the fixed and not fixed
yields, regarding the agreement. The mechanism of
the profit sharing is conducted based on the
agreement of all parties that corresponds to the
sharia principle. The issue of SDS must not employ
the interest mechanism, including the mechanism of
discount. SDS may only be transferred after the SDS
fund is employed in the business activities of SDS
publisher. SDS may be transferred before the due
date. The transaction that is conducted for
transferring SDS may only use the trading
agreement with the price that has been agreed. The
purchase of SDS may be conducted by an individual
and the entity such as the sharia financial
institutions, conventional financial institutions, or
other institutions. SDS may be traded in repo based
on the sharia principle in the secondary market. The
consideration of maqasid al-sharia in this fatwa
refers to the rule, which is: “Every madharat
(danger) should be avoided at any cost.” Also the
rule: “All madharat (danger) should be eliminated.”
And the rule: “The action of Imam (the authority
holder) toward the society shall follow the
maslahah.” And the rule: “Avoiding mafsadah
(damage) should come first then taking maslahah.”
In the attempt to improve the competitiveness and
product diversity, thus SDS can be the alternative of
fundraising for the maslahah of IFI and related
parties.
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4 CONCLUSIONS
Regarding the results and discussion, it can be
concluded that the decision of fatwas by DSN MUI
in banking field is overall conducted for the
maslahah or maqasid al-sharia for the stakeholders.
On the other hand, DSN MUI also employed
maqasid al-sharia as the postulate or approach in
concluding the result of ijtihad, as explained in the
six fatwas of DSN MUI above. This research only
observed fatwas in banking and limited only to
maqasid al-sharia as the approach in formulating
fatwas, thus it still opens the research space in other
economics and finance fields.
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