Community bank as the philosophical ratio legis behind the prohibition of Islamic Rural banks from offering direct debit in constitutional court rulings: Impacts and solutions in the digital financial era

Kadir, Abdul and Musataklima, Musataklima (2024) Community bank as the philosophical ratio legis behind the prohibition of Islamic Rural banks from offering direct debit in constitutional court rulings: Impacts and solutions in the digital financial era. Jurisdictie: Jurnal Hukum dan Syariah, 15 (2). ISSN 2086-7549

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Abstract

The unequal legal treatment between Commercial Banks (CB) and Rural Banks (BPR) in providing direct debit services has prompted some parties to file a judicial review of the Banking Law with the Constitutional Court (MK). Through Decision Number 32/PUU-XX/2023, the MK rejected the petition, reasoning that BPR/BPRS are community banks. This study aims to uncover the ratio legis of the community bank concept, the impact of prohibiting direct debit services on Islamic Community Banks amidst the development of Islamic fintech and the National Non-Cash Movement (GNNT), and the collaboration between Islamic Community Banks and Islamic fintech as a sustainability strategy. This is doctrinal legal research using case and statutory approaches, relying on primary and secondary legal materials obtained through library research and analyzed prescriptively. The study reveals that the prohibition of direct debit services for Islamic community banks is based on concerns about undermining their philosophical function to serve economically disadvantaged groups. The limitations and restrictions on payment transaction services have hindered the optimal performance of Islamic community banks in serving the public, particularly micro and small enterprises, thereby affecting sustainable national economic growth. Nevertheless, Islamic community banks can sustain their operations in the digital finance era by collaborating with Islamic fintech lending platforms to enhance their service offerings.

Item Type:	Journal Article
Keywords:	community bank; direct debit; constitutional court
Subjects:	18 LAW AND LEGAL STUDIES > 1801 Law > 180108 Constitutional Law
Divisions:	Faculty of Sharia and Law > Department of Islamic Constitutional Law
Depositing User:	Unnamed user with email abdulkadir@uin-malang.ac.id
Date Deposited:	08 Jan 2025 14:28

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