Profit and Loss Sharing Application in Islamic Banking

Abstract

The rapid development of Islamic banking in Indonesia is still faced with the fact that public knowledge about Islamic banking is still low, thus affecting public interest in becoming customers. One of them that must be understood is the procedure for profit and loss sharing in the Islamic banking system. This study aims to determine the application of profit and loss sharing in Islamic banking in Indonesia. This study uses a qualitative approach with a literature review method. The results showed that the agreed profit sharing contract was the proportion of profit sharing (called profit sharing) in terms of the percentage of possible real productivity results with a profit sharing system based on two models, namely the mudharabah and musyarakah models. This study also explains the basic differences between profit and loss sharing (PLS) and the interest system between Islamic banks and conventional banks.