INTEREST AND PROFIT SHARING INSTRUMENTS IN THE BANKING WORLD
Abstract
This article attempts to examine the concept of interest instruments in conventional banking and profit-sharing instruments in Islamic banking and their implications for investment and financing for customers according to the perspective of the principle of justice in Islamic economics. This study uses the research library method, and the researcher analyzes relevant secondary data related to this discussion. Data was sourced from journals, books, and other reading materials. This study uses a phenomenological approach to describe the overall problem of the people who experience it directly, in this case, the bank and the customer. The results of the study show that interest instruments at conventional banks tend to be more unfair because the interest system at traditional banks does not see profit and loss from the business being run. Dangerous for the culprit. Meanwhile, profit-sharing instruments at Islamic banks are based on the profit and loss of the company run by the bank and customers, which are considered fairer. Even so, Islamic banks still have an expected bank rate of standard profit expectations for the bank's business to support sound financial performance.
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