Syirkah Principle and Its Application with Bank Business

Syirkah Principle and Its Application with Bank Business

Bismillah was shalatu was salam 'ala Rasulillah, wa ba'du,

Syirkah is built on the principle of wakalah and trust (Amanah). So if there are 2 people joining in syirkah cooperation, for example, the A and B, then they work together, then A becomes the representative and recipient of the mandate from B, and vice versa.

Ibn Qudamah said,

Consequences of wakalah and Amanah (trust) contract

[1] Since A is the representative of si B, the activity of A is aligned with the activity of B. So that A is justified in doing anything to the syirkah object, even though that object, some of its ownership belongs to the B.

[2] Because A is the recipient of the mandate from B in the object of syirkah, then he must try to keep the syirkah object properly, and not make policies that endanger the syirkah object.

In the explanation of Syirkah Management described AAOIFI stated,

3.1.3.1. Basically, every syirkah member has the right to manage syirkah to sell, buy, pay with cash or tempo, receive goods, deliver goods, deposit, pawn, take collateral, sue for debt and set it, sue, fight in court, cancel the contract and reject defects in goods , renting, transferring debts, debt, and any things that bring about the usual business benefits. Syirkah members do not have the right to manage something that does not bring benefits to syirkah or even bring harm, such as: grants or giving accounts - unless there is permission from other syirkah members -, or in a small amount of money and a short tempo according to custom.

Application of rules:
Property and Bank Business:

We can apply the syirkah principle above in the banking world in our country.

As we understand, part of banking regulation in our country, that banks are not allowed to have inventory. So that the most allergic banks to buy goods as inventory, while the consumers are not clear.

We will see in the case of the property business. Almost all property consumers pay by installments. Given the value is quite large. And almost all developers, object to having to deal with consumers who pay in installments. Besides this greatly disrupts the company's cash flow, it is also risky. Given that property companies do not have expertise in the field of debt collection.

They need an intermediate institution, that's a bank.

It's just that we have sharia restrictions, that debt must not be required for profit. While in this case, the position of the bank is a financial institution, through a debt agreement.

Can You Give Suggestions for Sharia Banks?

I do not know whether this suggestion still violates some regulations or not.

Islamic banks as capital holders, in order to be able to sell houses without having to have inventory, what should be done?

There are 2 choices there, close to the customer or do they get closer to the developer?

If Islamic banks approach customers, the contract that can be done is buying and selling. So, that banks can have a legal sale and purchase benefits, Islamic banks must own the house, and control it. Only then sold to customers. Banks may not submit money to customers. But the bank must sell the house. However, again this is hampered by some regulations.

The second option, the bank approached the developer and conducted a housing project.

In its form, banks are involved as shareholders (musyarakah) in one of their projects. For example, Islamic banks provide funds for land acquisition.

Islamic banks do not have to submit in the form of land. Enough developers do it, then the Islamic banks fund it. What is submitted by the bank can be in the form of money, and does NOT have to be an item. So the bank does NOT have to have inventory. I do not know how the report is right for this. Are banks reported to have inventory or banks provide financing to developers.

Furthermore, because the contract between Islamic banks and developers is musharaka, their position is representative of the other party. So that banks can become representatives of developers, and developers can become bank representatives in transacting housing.

Departing from this principle, when the developer has begun to build housing, banks may sell the house to their customers as representatives for developers, without having to wait for the house to be finished. Because the position of the developer is a manufacturer, so that istishna contracts can be carried out. While in istishna 'contracts - in a stronger opinion - transactions can be done even though the goods have not been produced or are still in the production process.

Hopefully my explanation can understand.

Thus, Allahu a’lam.



This post Link (For references): 
https://yourdakwah.blogspot.com/2018/10/syirkah-principle-and-its-application.html

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