The Urgency of Sharia Bankruptcy Law Regulation in Indonesia
Liza Dzulhijjah, Neng Dewi Himayasari, Dinda Amelia Pramesti, Ayu Novita Sari

Universitas Islam Bandung

Abstract

Indonesia ranks third as the country with the strongest sharia economic ecosystem in the world according to the State of the Global Islamic Economy report (SGIE) 2023-2024. This is certainly inseparable from Indonesia^s potential as one of the countries with the largest Muslim population and also government support in developing the sharia economy in Indonesia. Among the government^s support programs to realize Indonesia^s vision as a global halal center are the regulation and strengthening of financial institutions, both Sharia Microfinance Institutions (LKMS) and Islamic banking. One factor supporting the growth of the sharia economy in Indonesia is the contribution of sharia financing to MSMEs. Discussion of sharia financing is certainly inseparable from the study of the potential risk of financing failure, known as Non-Performing Finance (NPF), which is heavily influenced by both national and international economic conditions. Therefore, LKMS and Islamic banks are also subject to the potential risk of bankruptcy. However, Indonesia still does not have specific regulations regarding sharia bankruptcy (taflis). This study aims to examine the competence and challenges of the courts in adjudicating taflis cases. This research method is qualitative with a normative juridical approach, based on secondary data as the primary data. The results indicate that there is currently a dualism of authority in handling taflis cases, namely between the Commercial Court and the Religious Court. The challenge in adjudicating these taflis cases is that the provisions in Law Number 37 of 2004 concerning Bankruptcy and PKPU do not yet accommodate Sharia-compliant bankruptcy values

Keywords: Sharia Bankruptcy Law, Sharia Economics, Indonesia

Topic: Law and Ethics in Terms of Islamic Perspective