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activities in the form of sports and youth Advisory Council (Dewan Pertimbangan In the 1990s, the government recognized education, and the supervision of Islamic
programs. Hence, Porkas was allowed. Syari’ah, DPS). In 1992, the government the development of Islamic banking by propagation activities, Islamic economy,
In this case, it was clear that MUI issued Law no. 7 on the banking system. the issuance of Law no. 10/1998. Wider and Islamic identity. The second included
opted to comply with the authoritarian A derivative regulation of this Law is recognition came in the Reform era more practical activities such as the
government rather than to pay heed to Government Regulation no. 72/1992. after the House approved and passed propagation ofparticipation in efforts
the people’s conscience. Paragraph 5 states that any bank that Law no. 21/2008 on Shari‘a Banking. tobuild society, the establishment of
56
applies for the basic principle of profit From then on, Shari‘a banks enjoyed Islamic financial forums including Islamic
In addition to MUI fatwas’ legal and social the same status as conventional banks
propensity, during the New Order the sharing ---which is claimed as the basic and all Shari‘a banking products were banks and extending enrichmentmodels
MUI founded several agencies that later principle of Islamic banking to avoid the allowed. Nevertheless, frequent disputes and trainings for Muslim scholars.
turned out to be its largest sources of forbidden usury---,is required to have or arose and overlap occurred between The MUI in the of Reformation
income. The MUI formed two institutions: raise a DPS. 55 the Central Bank of Indonesia (Bank Era
LP-POM in 1989, which grants halal A more detailed explanation on the Indonesia, BI) as the highest banking
certifications for all food products, drugs, DPS emerged in 1999 in Government authority and the MUI as the institution The fall of the New Order regime in
and cosmetics that circulate in Indonesia, Regulation no. 30/1999. It states that a that safeguarded and “produced” DPS. 1998 brought about changes in the
and the first Islamic bank, the Bank DPS should be independent from the On some key issues regarding Islamic concepts of Indonesian nationality and
Muamalat Indonesia (BMI) in 1991. It bank’s management and it must have the banking, BI sometimes decided its own the governmental system, including
started to organize the rejuvenation of authority to determine whether banking policies, although most still depend to a Islamic movements and politics. The
the ‘ulama in 1990 by offering courses products, services, and activities are large extent on the MUI DPS that claims period of democratic transition meant
in Islamic law for prospective religious in accordance with the Shari‘a. The to the most authoritative institution to a return of radical groups and Islamic
scholars from various regions. National institution most apt to this task is the settle these issues. 57 political parties’ demands for the
development has also consistently been MUI. Hence, a bank that offers Shari‘a implementation of the Jakarta Charter,
one of the MUI’s core projects. products should be supervised by The 1995 MUI national conference shows which they consider the symbol of
The BMI is one the MUI’s products someone from the MUI who sits on its the programs of the MUI in the New Order the inclusion of the Shari’a in the
era most clearly. It appeared that the
Indonesian Constitution. The radical-
59
in banking. However, its banking- Shari’a Advisory Council. This was of programs of the MUI were divided into fundamental Islamic movement was
related activities did not halt there. course a big project and it generated functional and institutional groups. The first
58
Since the early 1990s, one very large funds because of the MUI people’s are the MUI’s traditional tasks as advisor 59. Saiful Mujani 2007, Muslim Demokrat: Islam,
Budaya Demokrasi, dan Partisipasi Politik
important concentration of the MUI strategic positions in the banking world. of the government and the community, di Indonesia Pasca Orde Baru, (Jakarta: PT
was its conceptualization of the Shari’a Before the 1990s, this had never been strengthening Islamic brotherhood, Gramedia Pustaka Utama). See also Haedar
Nashir 2007, Gerakan Islam Syariat: Reproduksi
Banking system and to ensure that all done by this “clergy” institution. 56. Lindsey 2012, “Monopolising Islam”, p. 264. Salafiyah Ideologis di Indonesia, (Jakarta: PSAP
banks would offer Shari‘a products. An 55. Tim Lindsey 2012, “Monopolising Islam: The 57. Lindsey 2012, “Monopolising Islam”, p. 265. Muhammadiyah) and B. Platzdach 2011, “Religious
institution under the MUI’s authority that Indonesian Ulama Council and State Regulation 58. Ichwan 2005, “Ulama, State and Politics”, pp. freedom in Indonesia: the case of the Ahmadiyah”,
of the ‘Islamic Economy”, Bulletin of Indonesian
ISEAS Working Paper: Politics and Security
fully participated to this end is the Shari‘a Economic Studies, vol. 48, No. 2: 264. 49-50. Series, no. 2: 1-38.

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