oIslamic Financial Institutions Course oFirst Week Discussion oLearning Contract oIntroduction to Islamic Financial Institution oDiscussion oLearning Contract oAbout the Lecturer oOverview of the Subject oLearning Objectives oLearning Methods oAssessment oReferences oAbout the Lecturer oName:  Sartini, SE, MSc, Ak oWebsite:www.sartini.wordpress.com oPhone:  081328333153 oEmail:  tinnie_8@yahoo.com oAddress: Griya Suryo Asri II No. A4 RW:9 Suryodiningratan MJ II Yogyakarta oStudent Consultation: By appointment only oOverview of the Subject oThis subject focuses on the discussion of Islamic Financial Institutions, one of some subgroups of Islamic Financial System. The IFIs included in this discussions are IFIs banks such as Islamic commercial bank and BPRS; as well as IFIs non-banks such as Islamic leasing, Islamic insurance, BMT, Rahn, Islamic Capital Market and Islamic Fund Manager. oAlthough IFIs will be the main topic to be discussed in this subject, it will also discuss topics related to the other Islamic Financial System subgroups, including: nIslamic Financial Instruments nIslamic Financial Rules and Regulations nIslamic Financial Control and Supervision oAnother related topic that will also be discussed is topic on Islamic Public Institutions such as Zakat institution and Wakaf Institution

n oLearning Objectives oThis subject aims to provide student, an understanding of : oThe important of Islamic financial system, oThe Islamic Financial Instruments, oThe operation of Islamic Financial Institutions, oThe Islamic financial rules and regulations, oThe mechanisms of Islamic financial controls and supervisions oThe Islamic Public Institutions oLearning Methods oTutorial oPresentation and Discussion

oAssessment (1) oAssessment (2) oEssay nStudents are required to submit a 2000-2500 word essay about Islamic financial institutions. The precise topic will be announced in week 4, and the paper must be submitted in week 8. The essay must be written individually. oAssignment nStudents are required to make a presentation material related to the topic discussed every week. oPresentation & Discussion nStudents must present their assignments. One student will present one topic. The schedule will be arranged together at the first meeting. nStudents, who are not presenting their assignments, must participate as discussants. oGrading System oHow about the university policy? oWhat’s about this? nA : 85-100 nB : 65-84 nC : 45-64 nD : 25-44 nE  < 24 oAssessment policy oEssays and assignments will not be accepted after the due date unless arrangements for an extension of time have been made prior to the due date. oIf you do not agree with the result that you achieve for any piece of assessment for this subject please contact the lecturer immediately. oYou have a right to know the reasons why your work has received a certain grade and to request it be reassessed if you believe it has been unfairly assessed. oSubject Organization: Before Mid term Exam oSubject Organization: After Mid term Exam oIntroduction oBackground and Rationales oSince the mid 20th century, there has been a serious effort within Muslim societies to comply fully to the Islamic tenets in daily life. oThis includes the application of Islamic economic teachings, as discussed in various verses of the holy Qur’an, in the ahadith, as well as exemplified in the real life of prophet Muhammad and his companions. oThe real example of this effort can be seen in the establishment of Islamic financial institutions such as banks, insurance companies, capital markets, mutual funds and so forth, both in Muslim and non-Muslim countries. oBackground & Rationales oThe proliferation of growth in the Islamic banking sector, both nationally and internationally, has been remarkable. Islamic banks now stand side by side with their conventional counterparts in more than 150 countries worldwide. oIslamic Banking and Finance has become an important academic discipline and has attracted research in a number related areas such as the economics, finance, accounting, law, Syari’ah and others. oDemand for Islamic Banking and financial instruments as well as Islamic financial institutions have experienced a rapid growth internationally. oAs an important financial activity in the Muslim world, knowledge and expertise in this discipline is very valuable, not only to the Islamic banks and financial institutions, but also to the Muslim world in ensuring sufficient number of experts and knowledgeable workers in this area oScenario oPatricia Aburdene (2007) in Megatrend 2010 nThe Power of Spiritualism nSpirituality in Business oOne of The Indonesian National Agendas nPresident SBY Speech oOpening of Shariah Economic Festival http://www.indonesia.go.id/id/index2.php?option=com_content&do_pdf=1&id=6624 nBudget BI for Economic Shariah Development (8 x Rp 1,3)àDirektorat Perbankan Syariah BI (Dr. Mulya Siregar) oOverview of Islamic Economic oWhy Islamic Economic? oClassic Islamic Economist oAbu Yusuf (731-798), oYahya Ibn Adham(818), oEl-Hariri (1054-1122), oTusi (1201-1274), oIbnu Taymiyah (1262-1328), oIbnu Khaldun (1332-1406), oShah Waliullah (1702-1763). o oContemporary Interest in Islamic Economics oDevelopment of Islamic Economics (1) o 1930’s – 40’s Fiqh and Kalam o1950’s – early 60’s economics teachings and principles of Islam o1970’s – 80’s calls for Islamic Economics and Islamic Economic System o oDevelopment of Islamic Economics (2) oWriting on Islamic Economics nJurists à legalistic à confined to riba, zakat, banking, etc. nModernist à liberal interpretation of sources of Islam à answer problems of today nWestern trained Muslim Economiists à combined fiqh and economics à economic system and analysis oDevelopment of Islamic Economics (3) oContemporary Muslim Economic Thought: nAgreement on philosophical foundation nAgreement on sources of knowledge nAgreement on general principles oDevelopment of Islamic Economics (4) oDifferences arise in nInterpretation of term and concept found in Qur’an and Sunnah nApproach and methodology followed in building theoritical construct of Islamic Economics and Islamic Economics Systems nInterpretation of features in Islamic Economics System oDevelopment of Islamic Economics (5) oNeed for comparative analysis of contemporary Moslem Economics thought nAreas chosen à approach and scope, underlying assumptions, Features of an Islamic Economy, Distribution, Production nScholar chosen (based on the literature written) à M.A. Mannan, M.N. Siddiqi, S.N.H. Naqvi, M.Kahf, S.M. Taleghani, M. Baqir Al Sadr

oOutline of Islamic Economics System oSpecial Features of Islamic Economic System oInspired by Islamic worldview (tasawwur Islami) oThe concept of wealth and ownership (vicegerency/khalifah) oThe implementation of the objective of Islamic Law/Syariah (maqasid asy syariah) oThe prohibition of riba, gharar and maisir oThe institutionalization of public service institutions such as zakat, infak, sodaqoh and wakaf o oThe institutionalization of Islamic Fiancial Institutions oThe introduction to fair competition and dan equitable market to achieve the efficiency and justice in economic transactions oEconomic regulation through al hisbah oEquitable distribution of wealth to achieve social justice (tazkiyah) oFoundations of
Islamic Institutions and Islamic Financial System oIslamic Institutions o“Tidak ada keuntungan bagi orang-orang yang menyalahgunakan kekuasaannya, dan mereka tidak akan pernah memiliki pemimpin jika dipimpin oleh orang yang tidak baik”

(Al Afwah Al Awdi Pre-Islamic poet, as quoted by Al Mawardi Al Ahkam Al Sultaniyah) oIslamic System and Institutions oDidirikan dalam Tasawwur Islam oDikelola berdasar moral dan etika Islam oDiatur oleh syariah Islam oMaslahah oPrinsip-prinsip untuk mencapai terpenuhinya kepentingan umum. oGood is lawful, and lawful must be good. oTujuannya adalah untuk melindungi kepentingan yaitu (Imam Syatibi): nDaruriyat (kebutuhan dasar) nHajiyyat (kebutuhan tambahan) nTahsiniyyat (kebutuhan pelengkap) oDaruriyat oMelindungi: nDeen (agama) nNafs (jiwa) nNasl (keturunan/keluarga) nMal (harta) n‘Aql (akal) oHajiyyat oTambahan terhadap kebutuhan pokok oJika diabaikan mungkin menimbulkan kekurangan/masalah. oContoh: pelarangan penjualan alkohol untuk menghindari konsumsi alkohol. oContoh: kemudahan dalam menjalankan ibadah bagi orang sakit ataupun musafir. oTahsiniyyat oPemenuhan kebutuhan ini memberikan peningkatan kualitas hidup. oMore desirable. oContoh: menghindari pemborosan. oIslamic Accountability oTanggungjawab transedental terhadap Allah SWT (hablunmminnalah) oTanggung jawab sosial (hablumminanass) oSetiap manusia adalah khalifah oKebahagiaan dunia dan akhirat oTujuan ekonomi tidak hanya menyangkut keakayaan bersih tetapi juga meliputi pembersihan diri dan kekayaan (tazkiyah) o