OPTIMIZING THE INTERMEDIATION FUNCTION OF ISLAMIC BANKS FROM A LEGAL PERSPECTIVE

Abstract

ABSTRACT
Intermediary functions are a key element in the operations of Islamic banks, which are tasked with collecting and distributing public funds based on Islamic principles. This study aims to analyze and examine the efficiency of Islamic banking intermediation functions through a juridical approach based on Law No. 21 of 2008. Through normative legal research using a legislative and conceptual approach, this study examines the extent to which applicable regulations can guarantee the efficiency of intermediation functions in law and practice. The findings show that although Law No. 21 of 2008 has provided a legal framework that supports intermediation efficiency, its implementation still faces obstacles, such as overlapping regulations, weak coordination between authorities, and the suboptimal role of the DSN-MUI in supervision. In addition, the role of human resources and low public literacy are also factors that hinder effectiveness. This article concludes that the efficiency of Islamic banking intermediation has not been fully achieved due to the gap between ideal legal norms (das sollen) and practical realities (das sein). Therefore, technical regulatory reforms, strengthening of Islamic institutions, and capacity building for industry players are needed in order to harmonize Islamic legal principles and the effectiveness of the national banking system.