The Role of MUI and Methodology of Istinbat Fatwa in Indonesian Banking Law

Since Islamic Banking was introduced in Indonesia, Indonesian Islamic Scholars Council (MUI) has been the body that is responsibe to supervise the aspects of Sharia compliance. MUI is a non-governmental organization that has been mandated by the Indonesian government with the aspect of Islamic religion through the provision of Law No. 21/2008 on Sharia Banking. This article aims to analyze the role played by MUI in the context of the new laws and methods used in the issuance of the fatwa. The research methodology used in this article is a library research with the employment of content analysis on related reading materials and provisions of the relevant laws. Analysis includes a brief comparison with the practice of Islamic banking and finance in Malaysia. This article is exploratory in nature and therefore has a certain relevancy to the current practice of Islamic banking where Islamic institutions as practiced in Indonesia are directly involved in the promulgation of syariah banking legislation and dispute resolution.