Must Know, Here Are Sharia Bank Products

financialtreat – will explain about Must Know, Here Are Sharia Bank Products that you will get in the following article. Let’s look at this article carefully!

Islamic banking or Shariah customer service is a huge untappe potential in Indonesia, a country where 13% of the world’s total Muslim population lives. Considering that almost 90% of indonesia’s 250 million people convert to Islam, the market share of Islamic banks is still very low now. With assets of 24 billion U.S. dollars, Islamic banks in Indonesia only owne 4.9% of the total amount of banking assets in 2013. This is motivate by the lack of recognition of Islamic banks in Indonesia.

Must Know, Here Are Sharia Bank Products

Please note, Islamic banking or Islamic financial services are financial services that operate in accordance with Islamic principles. For example, there are prohibitions on interest payments (riba), excessive obscurity (gharar) and gambling (maysir). Instead, risks and profits should be share and these transactions should have clear economic objectives without inappropriate specifications.

With conventional banks. Conventional banks can manage funds within all profitable business lines under the auspices of the Act. As long as the business is profitable even if it is contrary to Islamic principles, it will still be done by conventional banks. The easiest example is usury/interest on a loan. In Islam, it is prohibite but conventional banks still defend loans with interest because it is considere profitable and does not violate the law.

For more details relate to Islamic banks, the following is an explanation of some Islamic bank products in Indonesia that can be widely utilize by the public base on needs, namely, Sharia savings, Sharia deposits, Sharia mortgages, Sharia financing or loans, and Sharia giro.

1. Sharia savings

Islamic savings are bound by an agreement or agreement between the customer and the bank, namely the mudharabah contract on deposits whose management is given to bank providers with a profit sharing system.

This Sharia product implements a revenue sharing system. So, it is not interest because of the element of riba that is not halal.

Islamic banks play a role in managing deposit funds to be channele as productive business capital in accordance with Sharia principles. The benefits are given in the form of profit sharing to customers according to the agreement.

2. Sharia deposits

Sharia deposits are term deposit products manage by Islamic banks. This product can be obtaine for individual customers and companies by using the mudharabah principle. Sharia deposits can be withdrawn after the deposit period has expire or mature, i.e. the option of 1 month, 3 months, 6 months, 12 months, up to 24 months.

The benefits of deposits in Islamic banks are in the form of ratios or profit sharing. Generally, the ratio offere is 60:40 for customers and banks. Looking at this figure, it is not surprising that many people assess the benefits of Islamic bank deposits higher.

What are the benefits of having Sharia deposits?

  • You can manage your own profit sharing and can be use as a guarantee of financing.
  • Shariah fund management is ensure halal.
  • There is an automatic roll over (ARO) facility.
  • Customer funds are ensure to be safe because they are guarantee by the Deposit Insurance Agency (LPS).

3. Sharia pawn

Sharia pawns are cash loan products from Islamic banks to their customers. Especially in this case, sharia pawns use rahn or ijarah contracts. As the main condition, customers are require to submit collateral items.

In its application, if the customer or debtor is unable to pay off the installments, the collateral will be sold to cover the debt. If the selling price exceeds the debt, the excess will be returne to the debtor. For administrative fees, the debtor is charge a maintenance fee for the goods.

As in the Islamic view that the pawn remains the property of the debtor, automatically the maintenance costs will be borne by the debtor which is then paid to the creditor or bank.

4. Islamic financing or loans

Sharia loans are loan products from Islamic banks. Customers are oblige to pay off the debt in the form of direct payments or installments. This kind of transaction is not classifie as riba as long as it is intende to help and still follow sharia. Bank profits are obtaine from the margin of the purchase price of goods in the store at the selling price to customers.

For example, customers borrow cash to buy a computer, islamic banks will buy it first in the store. Then, the computer is sold to customers at a price that has been entere margin. Another example is known as the profit sharing system, which is when we borrow some money for business capital. The bank will get a few percent of our business profit later. The percentage of profit sharing will be mutually agree in advance.

5. Giro syariah

Sharia giro is a deposit product in Islamic banks whose funds can be withdrawn using checks or bilyet giro in addition to ATM cards. Giro customers, also calle giran, can be from individuals or legal entities that require the ease of transacting in very large quantities at any time.

Revenue sharing contract in Islamic banks

The revenue sharing system in Islamic banks is applie by sharing profits or calle profit sharing. That is, customers and banks share the net profit from business or investment results. In other words, don’t use an interest system like conventional banks.


Mudharabah is a cooperation by providing capital loans to mudharib (debtors) with agreements agree between the two parties in order to get business profits. In conventional banks the term is known as a credit or loan product.


Musyarakah is cooperation between two or more parties with the division of profit and loss base on the percentage of funds use for business capital. In conventional banks the term is known as financing products for businesses.


Muzara’ah is cooperation in managing land or land to others with the distribution of rewards for landowners and land managers in accordance with the agreement. In conventional banks the term is know as a business capital loan product.


Musaqah is cooperation in managing gardens or plants with division in accordance with the contract between the owner of the garden and the manager of the garden. In conventional banks the term is know as a business capital financing product.

Savings or deposits in Islamic banks

Savings or deposit products in Islamic banks make it possible to charge deposit fees to customers.


Wadiah is a deposit where customers can deposit goods or money with the provision that there is a cost of deposit services from Islamic banks as deposit managers, such as savings / deposit products in conventional banks.


Mudharabah is a deposit of funds that can be use by banks (capital managers) for business capital in exchange for the agree revenue share between customers and banks. For example, deposit products in conventional banks that banks can use to provide business capital to debtors.

Credit contracts in Islamic banks

The most in-demand conventional bank products are credit products. Sharia credit products are commonly apply to the purchase of vehicles, houses, or other goods in accordance with customer needs.

Bai Murabahah

Bai Murabahah is the purchase of goods with the addition of profits know to buyers. The seller is also oblige to notify the capital of the purchase of the goods so that there is transparency in the price and profits obtaine by the seller. For example, vehicle or home financing products in conventional bank products.

Bai Salam

Bai Salam is a buying and selling contract in the form of ordering goods in accordance with the criteria desire by the buyer and supporte by the maker or seller. This contract payment method is in advance with the delivery of goods at a later date.

Bai Istishna

Bai istishna is a buying and selling contract in the form of ordering the manufacture of goods in accordance with the criteria set by the buyer and agree upon by the maker or seller. The payment method in this contract can be do by installment method. An example of this product in a conventional bank is the purchase of a vehicle or house with a credit or installment method.


The transaction process with ijarah contract is usually use in vehicle financing. The debtor will be charge the cost of renting the goods as well as being an installment of the purchase of goods when the rental period ends.

Other bank contracts in Islamic banks

The service products offere by Islamic banks are quite a lot, such as the use of ATMs, internet banking, and so on to facilitate banking transactions. In the context of Islamic bank products or Islamic banking products, such services may be subject to fees charge to customers.


Wakalah is a customer giving power to banks to carry out financial management, such as transfers, bookkeeping, and so on. For the efforts made, the bank will get a commission from the customer.


Al-Hawalah is transferring debts to others with the intention of helping. This debt transfer must still be base on the willingness of the creditor or debtor.

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Moreover, Rahn is holding the debtor’s assets in exchange for a loan of funds or capital from the creditor. because The simple term is to pawn goods to get a loan. So The debtor will be charge a maintenance fee that can be pay in installments in accordance with the contract at the beginning.

Sharia Bank Products: Qardh

So Qardh is the distribution of funds with the intention of helping. In addition The customer is oblige to return the principal of the loan in accordance with the contract. Customers overestimate the amount of payment from the actual principal but must not on the basis of coercion let alone include in the agreement.

That was the explanation of Sharia bank products in Indonesia. Good luck!.

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