Implementation of the Prohibition on Usury and Prohibited Transactions in the Islamic Banking System

Abstract

This study aims to analyze the implementation of the prohibition on usury and prohibited transactions in the Islamic banking system and to assess the level of compliance of Islamic financial institutions with Sharia principles in their operational practices. The background of this research is based on the strict prohibition of usury, gharar (uncertainty), and maysir (speculation) in Islam, as they have the potential to lead to injustice, economic exploitation, and imbalance in society. Therefore, Islamic banking exists as an alternative financial system based on the values ​​of justice, transparency, and welfare. This study used a qualitative method with a library research approach. Data were obtained from various sources, such as scientific journals, Islamic economics books, and regulations and fatwas from relevant authorities. Data analysis was conducted descriptively to provide a comprehensive overview of the implementation of Sharia principles in banking. The results show that the implementation of the prohibition on usury and prohibited transactions is realized through the use of Sharia contracts, such as mudharabah and musyarakah in profit-sharing systems, murabahah in sales and purchase transactions, and ijarah in leasing. Furthermore, the Sharia Supervisory Board (SSB) plays a crucial role in ensuring that banking operations comply with Sharia principles. However, challenges remain, including low public literacy regarding Sharia economics and the perception that Sharia banking practices are not entirely free from usury. Therefore, efforts are needed to increase public education, strengthen Sharia supervisory functions, and innovate financial products that remain compliant with Islamic principles. This is crucial for Sharia banking to develop optimally and sustainably in the face of the dynamics of the modern financial system.