This study analyzed the principles of concordance of Islamic law and Pancasila for the development of sharia banking in Indonesia. The growth of Islamic banking was overshadowed by the lack of Islamic economics sciences, so its development was experiencing infectivity in Indonesia. This study used the juridical-normative method of research subjects. In addition, the analysis was also conducted deductive and inductive to the legal materials. Basically, the essence of Islamic economics embodied in the principles of Islamic economics served as the (...) foundation for the creation of Islamic economic sciences. However, the international Islamic world economic movement was more influential in the transformation of Islamic banking taqnin in Indonesia. In fact, the enforcement of the sharia banking legal system was constrained by the lopsided nature of the Islamic Banking Act with the potential of socio-economic support in the community. This study found that the principle of concordance between Islam and Pancasila in the development of sharia banking was seen to be possible from the philosophical aspect, but it was doubtful from the political aspect because of the impact of various economic systems in Indonesia. So, this study recommends the need for the formulation of Islamic banking system relevant to the socio-culture condition of Indonesian society. (shrink)

This study is based on the objective conditions of Islamic banking in Indonesia, which have not carried out their social functions optimally. Based on reports from the financial services authority, Indonesia bank and several related research, the efforts to optimise the social function of Islamic banking still encounters several problems related to the distribution of banking funds that are more focused on business interests, lack of real business run by Islamic banks, customer funds that are mostly deposited in Indonesia bank (...) and have not been distributed to the real sector effectively, to banking activities by referring to the capitalistic economic paradigm and not fully referring to sharia guidelines. The results of the study of documents, literature and actual phenomena using descriptive and holistic analysis methods indicate that the degradation of the social function of Islamic banking appears as a result of a lack of understanding of the concept of Islamic economics based on the construction of Islamic social theology. The lack of understanding of banking management towards Islamic social theology has created a gap between the practical and conceptual sides of Islamic social theology, which in turn has an impact on the lack of social commitment from related parties in the implementation of Islamic banking activities. Strengthening the practical side of Islamic social theology is a necessity to overcome the existing problems.Contribution: The article contributes to the discourse on the application of Islamic social theology to Islamic banking practices. It aims to contribute to theological thought in Islam in order to strengthen the social function of Islamic banking, by focusing on the main objective of Islamic economics: al-falah or the achievement of spiritual and material prosperity. (shrink)