BPR SHARIA (BPRS)

1. UNDERSTANDING BPR Sharia (BPRS) as one of the Islamic banking financial institutions, the pattern of operations follows the principle of sharia or Islamic muamalah. BPR sharia was established as an active step in a restructuring economic Indonesia which is showcased in a variety of package financial policies, monetary, and banking in general, and specifically to fill the bank the opportunity to conventional wisdom in setting the interest rate (rate of interest), the next BPRS in widely known as the banking system for the results or the Islamic banking system. SRB standing under the Law. 7 of 1992 on the Banking and Government Regulation (PP). 72 year 1992 on the Bank based on the principle of profit sharing. 2. HISTORICAL DEVELOPMENT

As Dictum 3 packages of deregulation in the financial sector and banking (Pakto 27) that is trying to improve the efficiency of institutions - financial and banking institutions. That way it can be seen that in Indonesia there are two financial institutions, namely Non-Bank Financial Institutions (NBFI) and Financial InstitutionsBank(Banking). By type, bank financial institutions (banking) consists of: a. Public Bank b. BPRS Law No. 10 of 1998 that changed the law no. 7 of 1992 appears to be more clear and firm about the status of Islamic banking, as mentioned in article 13, Business

Bank. Article 13 reads as follows letter C, provides the funding and placement of funds based on Islamic principles, in accordance with the provisions stipulated by Bank Indonesia. The development of Islamic banks from the beginning of its existence until November 2001 there were 81 BPRS. The BPRS distribution network of offices spread over 18 provinces in Indonesia. 3. BPRS ESTABLISHMENT In establishing the BPRS, there are some things that must be met include: a. General requirements b. The license application principle c. Business license application d. Preparation of pre-operational e. Opening report

4. PURPOSE OF ESTABLISHMENT The purpose of the establishment of BPRS among others: 1) Improving the economic welfare of the ummah of Islam, especially the economically weak groups. 2) Reduce urbanization. 3) Increase job opportunities, especially in the sub - district. 4) Increase the per capita income. 5) Fostering the spirit of Islamic ukhuwah through economic activity. 5. BUSINESS ACTIVITIES Activities have BPRS under the Law. 10 of 1998 include the following: 1) Raise funds from the public in the form of savings deposits, savings and / or other forms of dedicated to it.

2) Give credit. 3) Provide financing for the customers based on the principle of profit sharing in accordance with the provisions stipulated in Government Regulation (PP). 4) Placing the funds in Bank Indonesia Certificates (SBI), time deposits, certificates of deposit and / or other banks. 6. PROHIBITED ACTIVITIES Under article 14 of Law no. 7 of 1992, business activities are not allowed to be done by rural banks, including the BPRS as follows: a. Receive deposits in current accounts and participate in payment traffic. b. Conducting business in foreign currencies. c. doing inclusion modes. d. Conduct insurance business. 7. PRODUCTS of BPR SHARIA Community Fund Mobilization The Bank will mobilize funds from the public in various forms such as receiving deposits wadi'ah, providing savings facilities and time deposits. This facility can be used to giving shadaqoh, infaq, zakat, hajj fare prepare (ONH), plan qurban, aqiqah, circumcision; prepare education, housing, vehicles and others. Deposits mandate Banks accept deposits trust (trustee account) in the form of funds infaq, shadaqoh and zakat. Akad receipt of this deposit is wadi'ah, namely a deposit that does not bear the risk. The Bank will provide profit for the results obtained from the bank through financing to customers. Savings wadi'ah Banks receive savings (saving accounts); both personal and business entities in the form of free savings. Akad acceptance of this fund is wadi'ah, namely depositdeposit that does not bear the risk of loss, and the bank will provide levels of profit

to the depositors who calculated daily and paid monthly.

Deposits or deposit wadi'ah mudharabah Banks accept deposits (time and investment accounts), both personal and agency / institution. Akad recipient is wadi'ah or mudarabah deposits, where banks accept deposits of public funds one month, three months, six months, twelve months and beyond as investments while at the bank. Depositors that their deposits contract wadi'ah get profit-sharing ratio is less than acceptable results mudarabah for banks in the financing / credit customers paid every month.

8. DEVELOPMENT AGENCIES BPR SHARIA In order to develop the BPRS, formed a body which organizes education and provide technical assistance to newly emerging BPRS, the foundation ISED (Institute for Islamic Economic Development) and foundations of education and development of Islamic Banking (YPPBS) ISED Foundation on an ongoing basis will continue to implement the program of establishment / provision of technical assistance BPRS establishment of Sharia in Indonesia in particular areas of potential. Several programs have been implemented in the form of technical assistance for the establishment of Islamic BPRs in various places in Indonesia such as BPR Amanah Islamic Ummah (Kec. Leuwiliang Bogor, BPR Islam Bin Amwalul Hasanah (Kec. Sawangan, Bogor) and a number of other projects, among others South Sulawesi, Cianjur, Aceh & other. YPPBS Foundation is a form of cooperation between Bank Indonesia Muamalat with ICMI. This foundation shape in order to assist the development and spread of BPR-BPRS throughout the country.

The YPPBS activities include: - To assist the process of establishment, - Provide technical assistance, - Basic Education for the fresh graduates from college, as well as intermediate for practitioners who already have at least two years experience in the banking sector.

9. REPORT REQUIRED TO REPORTED BPRS

A. General BPRS shall submit a report to the Indonesian bank, whether in the form of balance sheet and profit / loss and their annual and other periodic reports descriptions in time and form stipulated by Bank Indonesia

B.Newsletter SRB monthly reports are financial statements prepared by the SRB to the interests of Indonesian banks, which at present according to the systematic of the set by Bank Indonesia in a uniform format and definition, and reported using codes and numbers.

C. Report No periodic BPRS, which has a license from Bank Indonesia board of governors, shall submit a report to the bank's implementation of Indonesia no later than 10 days after the date of commencement of banking operations. 10. EVALUATION AND DEVELOPMENT OF BUSINESS EXPECTATIONS BPRS

According to the provisions of legislation, BPR sharia should be based on Islamic sharia principles in its operations as in outlined in AL-Quran and hadith. In practice, Islamic banking products are being formulated and received approval from the national Islamic council (DSN) as an institution in the government to recommend a set of Islamic banking products are in accordance with the provisions of sharia SUMMARY : BPRS Serve small and micro businesses BPR sharia is kind of bank that permitted to operating with syariah system in Indonesia. The legal rules about BPR Sharia is rules no. 10 1998 and rules of Indonesian central bank . Rules no. 10 1998 : BPR Sharia is the bank that established to serve small and micro businesses sectors, this sectors made the BPR totally different with the other banks, no matter sharia or not. Based on sharia banking system, BPR Sharia is the form of BPR that the management and working system based on sharia principals. The services of BPR Sharia BPR Sharia focusing to serve small and micro business owner who will loan amount of money with easy process, quick services, and easy requirement. To make easier the customers who will do transact with the bank, BPR have a lot of employee as the armada of fund shuttle transactions facilitators, the policy is established to make easier the customers to interact or do transaction for the bank, this is very relevant, because the owner of small and micro business do not need to go to the bank immediately. Sharia products The Princips of sharia in BPR Sharia are used to fund and deposito transactions, or fees capital loan, BPR sharia always use the customers fund with profit sharing system. With the system, the customers society could get profit sharing by fluctuatively

( unstable ) because it is based on income of BPR Sharia, its means that BPR Sharia using the peoples fund with profit share system. With the system, peoples will get the profit fluctuatifely, because the profit always depend on income that the BPR get. So, before the member do transaction, it should be agree and make an portion of understanding ( nisbah ). For every deposito funds that saving in BPR Sharia could be under guarantee of LPS ( lembaga penjamin simpanan ) to make the peoples who save the money in BPR feeling that money that they save is safety and clear. In every funding transaction, BPR sharia giving fund to UMK ( unit menengah kecil ) with sale-buy system, profit sharing or rent system.