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CHAPTER 1
INTRODUCTION

1.1 Background
Generally speaking, a bank is an institution that performs three primary
functions: Saving, Lending and Transferring Service. Bank as the financial
intermediaries in the society has a crucial role to supply and allocate funds. Islam as a
way of life provides guidance and directions on righteous living as well as the aspect of
economy. According to the Islamic perspective, the practice of conventional bank
(interest based) is regarded as unlawful. As a result, early alternatives were undertaken
in a number of Islamic countries to establish alternative to conventional bank institutions
by establishing new banking system referable to Islamic point of view. Consequently,
they set up interest free banking system as a solution to this problem. In Islamic
perspective, interest is categorized as riba (payment above or over what has been lent),
hence it is unlawful. For that reason, the Islamic Bank use profit sharing or revenue
sharing based system.
Islamic Banking in Indonesia has found its momentum for the past few years. It
is reflected by the growth of overall investments in the banking industry. The growth of
Islamic Financial Institution itself in Indonesia is quite significant. There are 127 of
Islamic Bank per December 2006 consist of Islamic Commercial Bank, Islamic Banking
Unit and Islamic Rural Bank. For the past 5 years, the number of Islamic Bank has
grown 48% and the asset increase from only Rp 4 trillions up to Rp 26 trillion (Sharia
Banking Development Report, 2006). The growth itself is supported by the opening of
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new Islamic business and the expansion of banking networks. It shows that Indonesia
has a great potential to apply Islamic culture and principle (Shariah).
As one of the biggest Islamic Commercial Bank in Indonesia, Bank Syariah
Mandiri is using revenue sharing concept instead of profit sharing concept. The main
difference between these concepts is in the factor influencing the amount of distributed
profit sharing income. In profit sharing concept, the income that is distributed to the
customers will initially be deducted by related operational expense. In revenue sharing
concept, there is no deduction in the earnings that will be distributed. The
implementation of both concepts will consequently resulting different outcome in Bank
Syariah Mandiris financial statement.
Based on the explanation above, the author decides to do research in this topic. It
will study the implementation of profit sharing system in Bank Syariah Mandiri based
on profit sharing and revenue sharing concept. The author will also simulate profit
sharing concept using Bank Syariah Mandiri financial statement. Finally, the author will
analyze the effect of both concepts toward Bank Syariah Mandiris financial statement.
Therefore, this thesis is written to serve the purpose of this study and will be
titled Comparison Analysis between Revenue Sharing and Profit Sharing Concept
and The Impact Towards Financial Statement: Case Study of Bank Syariah
Mandiri

1.2 Problem Identification
Based on the background, problems that will be identified by this study are:
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How to implement profit sharing system in Bank Syariah Mandiri based on
Profit sharing concept towards nisbah (profit sharing distribution share) of the
bank and customer.
How to implement profit sharing system in Bank Syariah Mandiri based on
Revenue sharing concept towards nisbah of the bank and customer.
What are the effects of both concepts toward Bank Syariah Mandiris Financial
Statement

1.3 Scope
The purpose of scope is to manage expectation on what will be achieved by the
research by setting the boundaries on what will and will not be included. The scopes of
this study are:
In this study, the author will use Bank Syariah Mandiri Financial Reports in
2006.
The data retrieved for total operating income are limited to three types of
financing products: Mudharabah, murabahah, musyarakah.
This study will only emphasize on the implementation of profit sharing system in
Bank Syariah Madiri and the effect of both profit sharing concepts toward Bank
Syariah Mandiris financial statement.

1.4 Aims and Benefits
The aims of this research are:
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To study the implementation of profit sharing system in Bank Syariah Mandiri
based on Profit sharing concept towards nisbah of the bank and customer.
To study implementation profit sharing system in Bank Syariah Mandiri based
on Revenue sharing concept towards nisbah of the bank and customer.
To analyze the effects of both concepts toward Bank Syariah Mandiris Income
Statement.

1.5 Research Methodology
The proper selection of the research methodology could be crucial for the
researcher. It could help the writer in developing the report. There are few
methodologies used by author in this study:
1. Library research
Literature Study is conducted by reading, taking notes of and studying books and
other media related to this particular thesis topic. Through library research, the
author can obtain secondary information to be used as theoretical foundation.
2. Field research
Field research is used by the author to obtain primary and secondary information.
The primary information is obtained by interviewing the employees and
practitioners of Islamic Bank. The secondary information will contain of Bank
Syariah Mandiris financial information.
This thesis is also using comparative analysis method. It will compare two
different methods of profit sharing system. It will analyze the advantages and
disadvantages of both concepts.
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1.6 Structures
The function of the thesis structure is to give guidance in thesis writing so it is
align with the main objectives of the reports. In composing this thesis, the following
structure would be used:
CHAPTER 1: INTRODUCTION
This chapter includes the background, problem identification that will be
researched on, the scope of the research, the aims and benefits of this research,
research methods, and also the structure of this thesis.
CHAPTER 2: THEORITICAL FOUNDATION
This chapter will explain about the theories that are related with the research.
Those theories will be basis for further research analysis.
CHAPTER 3: COMPANY PROFILE
This chapter consists of comprehensive description of the company history,
organization structure and products.
CHAPTER 4: FINDINGS AND DISCUSSION
This chapter includes the findings of the research and discussion of the research
findings.
CHAPTER 5: CONCLUSION AND RECOMMENDATION
This chapter comprise of a summary of the previous chapters and possible
recommendations to the problem which can hopefully be useful to the readers of
the report.