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10/27/2013

islamic bankers & ethics


Ethics (Wahyu & Ostoria,2006 at Rivai, Nuruddin & Arfa, 2012) are the main branch of philosophy which focused on understanding value or essence quality. Ethics include analysis and conceptual implementation such as defining right-wrong, good-bad and responsibility. Islam the closest definition related to ethics written in Al-Quran are khuluq. According to Rivai ethics can be described as guidance to educate the morality of mankind.

Islamic Banking as by the name of it are a banking activity which in it’s process are consisten with the principle of sharia. In case of Indonesia, the Islamic Banking industry start at 1992 where indonesia for the first time have their first Bank that run based on Syariah principles. It was Bank Muamalat the pioneer for Islamic Bank here in Indonesia.

Now, almost over two decade’s afterward, there are currently 11 Islamic Bank and 24 Syariah Unit operating here in Indonesia with total portfolio of asset at IDR 219 Bio, financing IDR 174 Bio and Third Party Fund at IDR 166 Bio (data based on SPS BI as per July 2013) which was also became the field of jobs for 25.582 people at Islamic Commercial Bank (BUS) and 9.781 people at Islamic Business Unit (UUS) or in total there are currently 35.363 people work as an Islamic Bankers in Indonesia.

In it’s twenty years of age, Islamic Banking Industry in Indonesia are still below 5% compares to the whole Indonesia’s banking industry, quoting from Achmad Permana taken from www.kompas.com “there are 3 major issues which hold back the growth of Islamic Banking. Number one is the availability of product and Syariah Banking product standarisation procedure. Second is people awareness of syariah product and the third one is the lack of qualified and competent human resources that understand syariah product”[1]

On an early sampling test, these are some of the reasons from Syariah Bankers on why they took their job as an Islamic Bank practitioners :
1.    Because working in a syariah bank are their way to avoid Riba and in order to fulfill their assignment set upon by Allah S.W.T to worship and obey to His command
2.    It is a promising industry with a trend of growth at 40% and expected to become larger furthermore. Since it is still a growing industry, the chance to accelerate career can be faster than to work in a conventional bank.
3.    They just apply for a job, and among many of application letter that being sent. This syariah bank are the company that hired them.

Start from the Goals

In the field of strategic management, there is one of it’s strategy which was the core competence strategy. This is a strategy where a company have a core comptence implemented within the company itself and became it’s strongest values which allows them to operate, to generate various product and create business furthermore. Some refer this core competence strategy to the tree as mentioned at Al-Quran on Ibrahim : 24-25
“Have you not considered how Allah presents an example, [making] a good word like a good tree, whose root is firmly fixed and its branches [high] in the sky?
It produces its fruit all the time, by permission of its Lord. And Allah presents examples for the people that perhaps they will be reminded”
If we refer a company as a tree, then main branch will be the core product, the fruit and leaves will be the end product and the root is the core competence which made it possible for the tree to grow bigger and generate a lot of things. These core competence are being delivered through out the company by the doings of their employees. In term of that matters then we can say hypotize that Human Capital is the main ingredients to sustain a company.

For an islamic bank as a business institution which based it’s operation on the value and principle of syariah, it’s human resources are demanded to have higher qualification since they have to synergize their “Knowledge, Skill and Ability” with their moral commitment and integrity. 

Emphasizing on moral aspect, which is currently being considered as “key success factor” (Hermawan Kertajaya & Syakir Sula at Nuruddin 2010:1) on business management that can be define in 4 categories which was  Shiddiq (honest), amanah (dependable), tabligh (communicative) and fathanah (smart).
QS Adh-Dhariyat : 56
“And I did not create the jinn and mankind except to worship Me.”
QS Al-Qasas :77
“But seek, through that which Allah has given you, the home of the Hereafter; and [yet], do not forget your share of the world. And do good as Allah has done good to you. And desire not corruption in the land. Indeed, Allah does not like corrupters.”
QS Al-Ankabut : 64
“And this worldly life is not but diversion and amusement. And indeed, the home of the Hereafter - that is the [eternal] life, if only they knew.”
Based on the quran we acknowledge that the purpose of human being brought into this world is to worship God. the form of worship itself can also be done by managing their welfare in live through our activity and behaviour.

Nurudin, 2010 explains that Syariah qualified human resources are those who can put their emotional (servant) and rational (khilafah) awareness as Allah S.W.T creature.  There are no conflict between the emotional and rational awareness as a moslem. Our emotional side guide us to always obey to His rules and orders while our rational side guide us to be a succesfull human being.

The mix between rationality advantage and emotional stability eventually will create a spirit or soul that live their live based on the path that was blessed by Allah S.W.T these are the people that within themselves are blended the prime quality as human being as describe in the Quran.
Kertajaya & Sula in “Marketing Syariah” emphasized that in order to manage syariah business needed to done by Qalbu. A syariah organization needed to have “Qalbu” as their core competence in order to develop their organization potential. In other word Islamic bankers are demanded to maintain a higher standard of balanced business ethics where they are able to implement that moral and religious obligation toward a system of a modern society.

According to Imam Ghazali as being explains in Rivai,2012 p.18 God rules and code of conduct when related to relationship between humans are called syariah, where it main purpose was to preserve human welfare which includes protection of faith (aqidah), live, free thoughts or will, decendant, and their belongings (Maqosid Syariah). The role in order of maqosid syariah also important cause the most important to be preserve are our faith then our live, free thoughts, our next generation then our belongings.

As mention earlier at paragraph 1, as per July 2013 there are over then 35 thousand workers in Indonesia Islamic Banking Industry. Which is actually quite small amount of people compare to the whole banking industry. Among that 35 thousand people, the majority of them were not actually come with a basic knowledge of Syariah Business itself. Most of it know their syariah knowledge through a standardize training held by the internal bank side or independent educational organization which conduct syariah courses.

Nurudin, 2010 explain that to fulfill the needs of human resources which were needed to support the growth of Islamic Banking industry the needs of government hands out in a form of Ministry of Education Policy are needed. Class of Islamic Economy at the Economic Faculties should be design to composure all needed element to be able to define the difference between conventional & syariah economics. A synergize step have been awaited by the market for a finalize curricullum of syariah economics that design to meet the need of the market.

Syariah Human Resources

Orgianus,2012 explain that a good valued human resources are those with great faith and great knowledge.

Faith, which mean that this person able to show a track record of being a good citizen, never bully or make fun of others, avoid negative prejudice, and do not seek others misconduct. Those who have faith within themselves are people who get trembled whenever they heard Allah name. Those who do their routine prays and donate some of their belonging to other who needed more.
QS : Al-Hujurat:15
“The believers are only the ones who have believed in Allah and His Messenger and then doubt not but strive with their properties and their lives in the cause of Allah . It is those who are the truthful”
QS Al-Anfal : 2-4
“The believers are only those who, when Allah is mentioned, their hearts become fearful, and when His verses are recited to them, it increases them in faith; and upon their Lord they rely -(2) The ones who establish prayer, and from what We have provided them, they spend.-(3) Those are the believers, truly. For them are degrees [of high position] with their Lord and forgiveness and noble provision-(4)”
A faithful human resources will also be tested by obstacles as the God has said :
QS Al-Ankabut 2-3
“Do the people think that they will be left to say, "We believe" and they will not be tried?(2) But We have certainly tried those before them, and Allah will surely make evident those who are truthful, and He will surely make evident the liars.(3)”
Knowledge, cause a good faith without a good knowledge will not be able to build a good or superior human resources.
QS Al-Mujadila : 11
“O you who have believed, when you are told, "Space yourselves" in assemblies, then make space; Allah will make space for you. And when you are told, "Arise," then arise; Allah will raise those who have believed among you and those who were given knowledge, by degrees. And Allah is Acquainted with what you do.”
In order to maintain our faith and able to be succesfull in our lives then there are four major knowledge needed. First one is the knowledge to understand Quran  and Hadis.
Second one is technical skill which enable someone to compete with the market
 QS Al-Anfal :60
“And prepare against them whatever you are able of power and of steeds of war by which you may terrify the enemy of Allah and your enemy and others besides them whom you do not know [but] whom Allah knows. And whatever you spend in the cause of Allah will be fully repaid to you, and you will not be wronged”
Third one is general knowledge of management so that an individual able to organize at least their individual and family welfare.
QS at-Tahrim : 6
“O you who have believed, protect yourselves and your families from a Fire whose fuel is people and stones, over which are [appointed] angels, harsh and severe; they do not disobey Allah in what He commands them but do what they are  commanded”
And the fourth one is history, especially those related to the past so that it will be a good learning curve to prepared someone for things to come in the future.
QS al-Hasyr : 18
“O you who have believed, fear Allah . And let every soul look to what it has put forth for tomorrow - and fear Allah . Indeed, Allah is Acquainted with what you do.”
Naqvi,2003 p.149 explains that there are four elements toward Islamic Ethical System which was Unity (tawhid); Equlibirium (al- ‘adl wa al-ihsan); Free will (ikhtiyar) and responsibility (fard). Each of these elements of the system has been selected by reference to “informed intuition” about widely held islamic belief, philosophy of life, and the centrality of human reason – all of which are highlighted in the holy Quran.

A strong Human Resources in Islamic point of view (orgianus, p.56-57) are :
-           - Those who able to control their fondness toward something (QS : Al Furqan : 68)
-           - Those who able to control their rage (QS : Ali Imran 134)
-           - Those who able to control their power or authority (QS Al Anfal : 27-28)

According to Nurudin,2010 p.8 the growth of Syariah Industry in Indonesia clearly had shown a promising numbers, although its portion are still relatively small, but the growth gave hope for the future. Due to that condition, the fulfillment of qualified human resources to build Islamic Based economy are needed.

These kind of human resources can’t be build instantly, recent case which happens in an Islamic Bank located at Bogor, west java[2]. There is a case of fraud which involves at least 3 of it employee has not only gave a negative perspective towards the bank itself but also to the whole Islamic Industry. Somehow when it was a conventional staf which made a mistake like that, only the bank itself get a bad review by the community, unfortunately for Islamic Banking Industry, when this kind of thing happens, the big question aroused “how come an islamic based principle employee will do this misconduct?” there must have been something wrong with their ethics, could this be only on one bank or the whole industry itself have an issue in term of qualified islamic bankers?

As a reminder everything will come back to each person Aqidah, each and everyone of us will be recognized to what kind of value can we add toward others. The demand to follow Allah rules of conduct and be kind to others are very logical. Always gave a positive action were an investment for our own good which will be rewarded by Allah S.W.T and in contrary to that, we will also be given punishment to every negative action that we have done in our live.
  

[this post are submitted due to educational purpose in order to fulfill mid term assignment from Ethics & Good Governance class at Paramadina Islamic Business Finance class 2012]

INDEX
Al-Quran
Naqqvi, Syeb Nawab Haider. 2010. Perspective on Morality & Human Being. The Islamic Foundation, London
Nuruddin, Amiur. 2010. SDM Berbasis Syariah.
Orgianus, Yan. 2012. Moralitas Islam dalam Ekonomi & Bisnis. PT Marja. Bandung
Veithzal Rivai, Amiur Nuruddin, Faisar Ananda Arfa. 2012. Islamic Business & Economic Ethics. PT Bumi Aksara, Jakarta


[1] http://bisniskeuangan.kompas.com/read/2012/08/13/15282835/Tiga.Masalah.Terbesar.di.Bank.Syariah
[2] www.megapolitan.kompas.com/read/2013/10/23/1501396 “beri kredit fiktif 102 miliar...”

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