Akad Murokab on the DSN-MUI Fatwa and its Effect on Islamic Bank Funding Products

. The study determines whether Islamic bank management understands hybrid contracts in the DSN-MUI funding fatwa and its influence on developing funding products in Islamic banks. The type of research used is normative juridical to examine the application of Islamic legal rules both at the methodological level (uṣul fiqh) and fiqh rules and at the product level (fiqh). The primary data of this study comes from the DSN-MUI fatwa and interviews to explore the understanding of Islamic bank management towards hybrid contracts in the DSN-MUI funding fatwa. This study indicates that from eight fatwas on DSN-MUI funding products, only fatwa No. 86 and 87 containing hybrid contracts. There are several theoretical frameworks, standards, and limitations (ḍawābiṭ) that the DSN-MUI has determined. The study also shows that the management of Islamic banks, generally, has understood the theoretical framework, standards and limitations of hybrid contracts on Islamic bank funding products only in textual concept. The textual understanding can increase the portfolio of funding products. This can be evidenced by the increasing portfolio of muḍārabah savings and income smoothing programs at Islamic banks.


Introduction
The growth of the Islamic finance industry in Indonesia has increased significantly. This is reflected in the growth of Islamic financial institutions, their products and services, to the development of Islamic financial support infrastructure. Indonesia has the most prominent Islamic financial index globally in the global market. Based on The Financial Services Authorization (OJK) data in December 2021, Islamic financial assets in Indonesia, excluding Baitul Māl wa al-Tamwīl (BMT) shares, reached 1,802.86 trillion with a market share of 9.89 percent. Total Islamic banking assets were recorded at Rp 608.5 trillion. However, its market share in national banking was only about 6%, so the contribution of Islamic banks to the national economy has not been optimal.
The suboptimal market share of Islamic banking is caused by the funding structure of Islamic banks, which still rely on financing from expensive funds, making it inefficient. In addition, Islamic bank products are still less varied, so they are less attractive to the public. The lack of variety of Islamic banking products, among others, can be caused by the inability of management to translate the DSN-MUI fatwa into operational products, including fatwa containing hybrid contracts.
The National Sharia Council of The Indonesian Ulema Council (DSN-MUI) has produced around 57 fatwas that contain hybrid contracts, including fatwa related to funding products. On that basis, the DSN-MUI fatwa behind products in Islamic banking is dominated by hybrid contracts rather than single contracts. PBI or POJK has not codified the DSN-MUI fatwa around Islamic banking funding products using hybrid contracts. This causes differences between the Islamic bank management in developing their funding products.
There are several studies on hybrid contracts. Khan (2013) says that hybrid contracts are allowed as long as there are no elements of usury, gharar, and mayisīr. Khan's opinion is reinforced by Muneeza (2020) and Ahroum (2020), who state that multiple contracts are allowed as long as they do not contain elements of usury. Imam Sastra (2018) suggests that numerous agreements are allowed as long as there is no qarḍ contract that can lead to the aspect of usury. (Ishak, 2020) argues that multiple contracts can be applied to sharia financial products as long as they are in accordance with sharia maqāṣid. Hasanudin (2016) stated that hybrid contract is allowed as long as they are not mutaqābilah.
The study discusses that the hybrid contract is contrary or contradictory to nas (hadith). However, the study has not examined the limitations of hybrid contracts in a fatwa that is used as a guideline by the management of Islamic banks in developing their products and how their understanding of hybrid contracts affects funding product development. Based on a search of some of the literature above and as an effort to complete theories that are closely related to the hybrid contract, the author tries to examine the hybrid contracts in the DSN-MUI fatwa and their influence on the development of Islamic banking funding products in Indonesia with the following research questions: 1. Does the DSN-MUI fatwa on funding products contain hybrid contracts and have specific standards and restrictions?
2. How does the Islamic bank management's understanding of hybrid contracts affect the development of Islamic bank funding products?
The scholars have different opinions regarding the hybrid contract law. Some scholars argue that a hybrid contract is prohibited based on the hadith of the Prophet Muhammad narrated by Imam Tirmidhi, al-Nasai, and Abu Dawud. They stated that "the Prophet (peace be upon him) prohibited two contracts in one transaction". Some scholars argue that not all hybrid contracts are prohibited because the above hadith only prohibits some hybrid contracts, i.e. a hybrid contract that occurs reciprocally (mutaqābilah) (Hammad, 2001). Khan (2013) argues that hybrid contracts can be justified if they do not contain elements of bay' al-'Inah. Bay' al-'īnah is a form of buying and selling transaction in which the seller sells the goods to the buyer firmly, and then the buyer sells it to the seller in cash at a lower price he must pay at maturity. Khan's opinion was strengthened by Ahmad Abed Alla Alhusban, Ali Abdel Mahdi Massadeh and Haitham Haloush (Alhusban, 2021) Husain Ahmed Hassan (2014) argues that the hybrid system is not new. For example, in the United Arab Emirates, Islamic financial institutions freely initiate sale contracts and investment contracts for retail and corporate banking clients and experiment with new and innovative hybrid structures by mixing the sale and investment contracts for project finance and sukuk purposes. In the Islamic capital market, the paradigm in the system has shifted from asset-backed to assetbased financing. Within this system, the Islamic capital market provides a range of instruments for transactions, some consistent with earlier notions such as mutual funds, equity investments, and stock trading. In contrast, other instruments like Sukuk, real estate finance, and insurance have developed hybrid and debt-based models within the system. As a result, the sources of Islamic corporate finance that were expected to be equity-based are now hybrid through various means compatible with Sharia principles. Consequently, part of the capital structure and other Islamic corporate finance segments are not very different from conventional practices (M. Kabir Hassan, Sirajo Aliyu and Mumtaz Hussain, 2022).
Iman Sastra added that most Islamic banking and finance contracts combine more than one contract in their products and services. However, this concept encounters legal issues due to the Prophet's hadith (SAW) prohibiting combining several contracts in one single transaction. The research argued that it is lawful for Islamic banking and finance to connect more than one contract to structure the Shariah-compliant product if they follow the Shariah guidelines and parameters of a hybrid contract (Muhammad Iman Sastra Mihajat, 2018).
As the modern financial environment is complicated, developing efficient and competitive Islamic products is crucial to compete with conventional banking products. Thus, implementing 'Shari'ah contracts in fiqh muamalat require a special approach by creating hybrid contracts in one product. However, this must comply with the parameters of the maqāṣid al-Sharia, where in particular, it must not lead to changing any illegal action. To be precise, the combination of contracts could lead to the hidden or justifiable 'ribā' like using a hibah agreement to hide a profit guarantee in the muḍārabah contract (Ishak, 2020).
Muneeza (2020) suggests that homeownership financing in Malaysia uses multiple contracts, including al-murābah lil amir bi al-syirā and Musyārakah Mutanāqiṣah, which combine mushārkah, ijārah wa'ad tuma bay' and ijārah contracts, Ahroum (2020). Both multi-contracts include multi-contracts permitted by Sharia because they do not fall into the element of usury. Setiadi (2017) argues that the original law of hybrid contract is permissible, except for hybrid contract, which is expressly prohibited by nas (al-Hadith). An understanding of Nash prohibiting hybrid contracts requires a fairly in-depth study to identify which hybrid contracts are allowed and not permitted. Hasanudin (2016) argues that the DSN-MUI fatwa has adopted mujtami'ah http://journal.uinjkt.ac.id/index.php/iqtishad DOI: 10.15408/aiq.v14i1.25620 and muta'addidah contracts and rejected the mutaqābilah contract. The mujtami'ah contract is to collect several contracts in one transaction where one contract with another cannot be separated. The muta'addidah contract is to manage several contracts in which one contract is independent of another Albouna (2007). The mutaqābilah contract is to collect many contracts in one transaction that depends (mu'allaq) on each other.
Susanto (2016) states that until 2016 out of 100 fatwas that DSN-MUI has published, there are about 39.32% directly related to Hybrid contracts. Even in specific sectors like the agricultural sector, it takes another hybrid contract not regulated in the DSN-MUI fatwa, namely bay' al-wafa wa al-Muzāra'ah or bay' al-Wafa wa al-Mukhabarah. Hence, it requires a lengthy licensing process (Pratiwi, 2017).
The DSN-MUI fatwa does not explain hybrid-contract ḍawābiṭ in Islamic bank funding products. This causes differences in implementation in each Islamic banking industry, depending on the opinion issued by each Sharia Supervisory Board (DPS). As a result, Muhammad Nur Yasin evaluated the enactment of hybrid contract principles in the Sharia Banking products within the frame of eclectic law. Thirteen Sharia Commercial Banks in Indonesia offer 228 nonhybrid contract products and 168 hybrid contract products. This study identifies factors behind the enactment of hybrid contract principles in Sharia Banking products and the model of eclectic law that it subscribes to (Muhammad Nur Yasin, 2019).
Based on a search of some of the literature above and complete theories closely related to the hybrid contract, the author examines the hybrid contracts in the DSN-MUI fatwa and their influence on the development of Islamic banking funding products in Indonesia.

Methods
The type of research used is normative juridical, which is conducted to examine the application of the rules or norms in Islamic law both at the methodological level (ushul fiqh) and fiqh rules as well as at the product level (fiqh).
The objectives of normative legal research include research into legal principles, legal systematics, legal synchronization, legal history research, comparative law research, and legal application research.
This research focuses on the DSN-MUI fatwa from fatwa number 1 to number 139 related to Islamic banking funding products. Fatwa is treated as a text that contains reasons and thoughts in its manufacture. In this case, the view is related to discussing hybrid contract issues. The Text studies are carried out to elaborate on the concept of hybrid contract, both in classical and modern fiqh texts. Also, to find out the forms and variations of hybrid contracts applied in the DSN-MUI fatwa and how it affects the development of Islamic banking funding products.
In general, the data types in this study were divided into two: primary and secondary. Primary data is directly obtained from the source and is related to the research problem. In this study, the primary data are DSN-MUI fatwa related to Islamic banking funding products that contain hybrid contracts. At the same time, secondary data was obtained through library research. Data analysis is done by collecting the necessary data. The data is analyzed in a qualitative and quantitative approach. Qualitative analysis is done with a content analysis approach. First, the DSN-MUI fatwa relating to Islamic banking funding products is divided between a fatwa containing only one contract and a hybrid contract. After that, the fatwa of one contract is separated because it is not to be analyzed, and a fatwa that contains a hybrid contract is taken for further analysis.
The hybrid contract fatwa is reviewed and analyzed to identify the theoretical framework, standards, and limitations (ḍawābiṭ) and how they affect Indonesia's Islamic bank funding products development. After analyzing the limitations (ḍawābiṭ) of hybrid contracts in the funding fatwa, the authors confirmed it to the bank management through interviews on the extent of their understanding of the ḍawābiṭ contained in the fatwa and how to apply it in funding products and what obstacles they faced, after that assessing the extent of their understanding affect the overall development of funding products To determine the knowledge of bank management on hybrid contracts and its influence on the development of funding products, the author uses purposive sampling, which is a non-random sampling technique where the researcher determines the sampling by determining special characteristics that are in accordance with the research objectives so that it is expected to answer research problems. The research focused on Sharia bank management that applies multi-

Theoretical Framework, Standards, and Specific Restrictions of Hybrid Contract on Funding Product Fatwa
The scholars have different opinions regarding the hybrid contracts law based on the literature study. Some scholars argue that hybrid contracts are prohibited based on the hadith of the Prophet Muhammad narrated by Imam al-Tirmidhi, al-Nasai, and Abu Dawud. They stated that the Prophet (PBUH) forbade two contracts in one transaction. Some scholars argue that not all hybrid contracts are prohibited because the above hadith only prohibits part of hybrid contracts, namely hybrid contracts that occur reciprocally (mutaqābilah).
Khan argues that hybrid contracts can be justified if they do not contain elements of bay' al-'Inah. Bay' al-'īnah is a form of buying and selling transaction in which the seller sells the goods to the buyer firmly, and then the buyer sells it to the seller in cash at a lower price which he must pay at maturity. Khan's opinion was reinforced by Ahmad Abed Alla Alhusban, Ali Abdel Mahdi Massadeh and Haitham Haloush. Hybrid contracts are also prohibited when qarḍ contracts are combined with mu'awwaḍah contracts such as buying and selling and ijārah. The margin/fee is determined based on how much bailout is given.
It can be concluded that hybrid contracts can be justified if there is no bay' 'inah element and do not combine qarḍ contracts and mu'awwaḍah contracts. Further, the margins/fees are determined based on the amount of bailout (qarḍ) given. Based on the observation, DSN-MUI fatwa on funding products shows that the multi-contract does not contain hybrid contracts. It violates the provisions agreed upon by the scholars, namely giving rise to the form of bay' al-'inah and the determination of margins/fees that are directly related to the loan (qarḍ) provided. This happens because the DSN-MUI fatwa determines strict requirements, standards and ḍawābiṭ for hybrid contracts contained in funding products. However, the requirements, standards and ḍawābiṭ are not considered by industry players, it will result in its appearance. This includes a prohibited multi-contract. If applied individually, the eight DSN-MUI fatwas above, the contract used is only one. In other words, it does not contain a hybrid contract. However, multiple contracts will appear when one another is used as a reference in certain funding products. For Savings products, for example, if the chosen one is wadi'ah savings, then the contract used is wadi'ah under fatwa no. 02/DSN-MUI/IV/2000 regarding Savings. If the selected is muḍārabah savings, then the contract used is the muḍārabah contract with the same reference, fatwa no. 02/DSN-MUI/IV/2000 concerning Savings.
In the case of Islamic Banks offering deposit products, the contract used is muḍārabah as regulated in fatwa no. 03/DSN-MUI/IV/2000. This product also refers to fatwa No. 115/DSN-MUI/IX/2017 on muḍārabah contract. This fatwa is also used as a guide for muḍārabah savings products.
A study on the fatwa of funding products that DSN-MUI has released indicates that fatwa directly related to funding products do not contain hybrid contracts (single contract). However, some of its derivative fatwa have a hybrid The DSN-MUI fatwa allows the merging of muḍārabah and prize contracts with several notes, including: 1. The prize given must be in the form of goods and/or services, not in the form of money 2. The prize offered is taken from bank-owned funds, not from customer funds 3. Prize does not have the potential to practice risywah, ribā, gharar, and mayisīr

The prize should not be a custom or norm
If one of them is not fulfilled, the hybrid contract will change from a mujtami'ah contract to a mutaqābilah contract.
If the prize contract is merged with the wadi'ah contract, the DSN-MUI provides a limit (ḍawābiṭ) that the prize must be given before the wadi'ah contract occurs. If the prize is given during or after the wadi'ah contract, it can be categorized as a mutaqābilah contract. This is because the wadi'ah contract on the funding product has been transformed (tahawul al-'aqd) into a qarḍ contract which cannot promise any advantages, including prizes. After all, it will fall into the practice of usury (ribā). The income smoothing of third-party funds can be done by Islamic Financial Institutions either by forming a profit equalization reserve or not. The establishment of reserves is intended to anticipate the possibility of revenue sharing realization for Customers depositing funds below the expected return rate. The establishment of reserve funds can be carried out by Islamic financial institutions with several notes, including: 1. The actual revenue share exceeds the expected revenue; 2. Get permission from third party fund customer 3. Not reduce the revenue share that is the right of the third party fund customer if the actual revenue share is smaller than the expected revenue; 4. In the event of a muḍārabah muqayyadah agreement, the reserve fund may also be established through the allowance of the customer's rights that exceed the expected revenue after being distributed with permission from third party funds customer; 5. The Islamic financial institution established the reserve fund. This is created from the allowance of profits before being divided over the expected revenue is the right of the third party funds customer collectively that must be managed separately by the Islamic financial institution for setting income and the level of reward for the third party funds customer.
Islamic financial institutions can only use income smoothing in conditions that are strongly suspected of having the potential to risk withdrawing customer funds due to the uncompetitive rate of return from Islamic financial institutions. Income Smoothing Policy cannot be implemented if it creates hidden usury practices where rewards are given without regard to actual results. In utilizing the income smoothing method without reserves due to lower operating results than projected, Islamic financial institutions may waive their rights to adjust fees for third-party fund customers to be competitive and notify customers. Suppose a sharia financial institution relinquishes its rights. A mujtami'ah contract occurs between the muḍārabah contract and the isqaṭ al-Ḥaqq contract, with the provisions not being agreed. If it is agreed upon in the contract, it can be categorized as a mutaqābilah contract, because it will cause usury (ribā 'nasa').
Suppose an Islamic bank funding product is registered with the Deposit Insurance Corporation. In that case, two contracts will be collected in one transaction in a mujtami'ah contract, such as wadi'ah and kafalah, and muḍārabah and kafalah. These provided that the deposit guarantee can only be performed on capital (ra's al-mal) of muḍārabah maḍmūnah and profit-sharing that has become the customer's right but has not been paid until the business lies revoked. Wadi'ah principal (mablagh al-wadī'ah) and bonuses are determined by the bank to be the customer's right. However, the sum has not been paid until the business license is revoked. If it is guaranteed other than the two things above, the two contracts will change from a mujtami'ah contract to a mutaqābilah contract.

The Understanding of Islamic Banking Management on Hybrid Contracts and Its Effect on Funding Products Development
DSN-MUI Fatwa is the primary reference of Islamic bank management in creating and running funding products. The understanding of Islamic bank management on the DSN-MUI fatwa becomes a barometer in developing Islamic bank funding products. The research shows that Islamic bank management, in general, has understood the theoretical framework, standards, and limits of hybrid contracts on Islamic bank funding products, although not in detail The interview found that the management of Islamic banks has prize programs and income Smoothing on funding products. It showed that they are very compliant with the requirements, standards, and ḍawābiṭ determined by the DSN-MUI fatwa so that their program does not lead to prohibited hybrid contracts. We conducted interviews with the Board of Directors of PT BPRS Harta Insan Karimah and PT BPRS Insan Cita, where PT BPRS Harta Insan Karimah held a savings program with prizes and income smoothing (HIK-PD). In contrast, PT BPRS Insan Cita only manage income smoothing programs (IC-BD). President Director said: I know that the prize programs and income Smoothing on funding products have many requirements, standards, and ḍawābiṭ determined by the DSN-MUI fatwa, and I am aware of that (HIK-PD) President Director is very aware of the provisions contained in the DSN-MUI fatwa in implementing the program. Still, he does not wholly understand the philosophical reasons for the provisions contained in the DSN-MUI fatwa, which are essential and closely related to the concept of a hybrid contract. He does not entirely understand that hybrid contracts are not the result of bay' al-'inah, and they may not incur a margin/fee. It is directly related to the loan size if there is a merger between a sale and purchase/ijārah contract with a qarḍ contract and a merger between a wadi'ah contract and a qarḍ contract. Prizes, in a savings program with prizes, because in essence wadi'ah savings from the bank's side are qarḍ. The director said: I know that the two programs have more than one contract, namely the muḍārabah and prize contracts for the savings program with prizes and muḍārabah and isqath al-Haq for the income smoothing program, and I know that some hybrid contracts are allowed, and some are prohibited, but I do not know in detail about this, as long as I follow the terms and conditions contained in the DSN-MUI fatwa I will not be trapped in hybrid contracts that are prohibited (HIK-OD) I know that the income Smoothing on funding products has many requirements, standards, and ḍawābiṭ determined by the DSN-MUI fatwa, and I am aware of that. The income smoothing program has more than one contract, namely muḍārabah and isqath al-Haq. I know that some hybrid contracts are allowed, and some are prohibited. However, I do not know in detail about this. As long as I follow the terms and conditions contained in the DSN-MUI fatwa, I will not be trapped in prohibited hybrid contracts.

(IC-BD)
Based on the interview above, the Islamic bank management does not know in detail about the terms of hybrid contracts, but they understand the limits set by the DSN-MUI fatwa related to hybrid contracts. They understand what provisions/ restrictions need to be considered when creating a prize program in Islamic bank funding products as well as in conducting income smoothing third-party funds. Their knowledge and understanding of these limitations do not necessarily make the prize and income smoothing program workable because internal and external factors strongly influence it.
At the Islamic People's Financing Bank Harta Insan Karimah (BPRS HIK), for example, in 2021, the muḍārabah savings product experienced a positive trend after holding a prize program for the product with the name " Platinum ib Karimah Savings ". BPRS HIK started marketing this prize program at the end of 2019, and until now (September 2021), it has collected 17.7 billion. The management did it to attract public interest amid the covid-19 pandemic. This program provides product diversification for Islamic banking. It offers attractive options for customers that they have only received from conventional banks. The provisions in the DSN-MUI fatwa do not bind this program at conventional banks.   The table shows a product saving portfolio that had decreased in 2020 due to the covid-19 pandemic but increased in 2021. If you look at the decline from 2019 to 2020 is not significant and has a substantial increase in 2021. This is influenced, among other things, by the presence of the Muḍārabah savings program with prizes (Platinum ib Karimah Savings). In September 2020, the portfolio reached 6,951,850,659, contributing 9.1% of the total portfolio of savings products or ranking fifth. September 2021 "Platinum ib Karimah Savings" increased from 6,951,850,659 to 17,715,733,821, contributing 18% of the total savings product portfolio or ranking third after Karimah Savings and Hikmah Savings.
In addition to savings with prizes, BPRS HIK also carried out an income smoothing program at the beginning of the pandemic by giving the right for the results (isqath al-haq/tanazzul al-ḥaqq) to funding customers by referring to No. 87/DSN-MUI/XII/2012 concerning the Income Smoothing Method of third-party funds. As stipulated in fatwa No. 87, the use of Income Smoothing Method without a Reserved form of distribution of operating results lower than the projection, the Islamic financial institutions may waive their rights (isqaṭ al-ḥaqq/ at-tanazzul 'an al-ḥaqq). This to adjust the rewards for third party fund customers to be competitive and can be notified to customers. In addition to BPRS HIK, the savings account with prizes has also become a discourse for BPRS Insancita. The management has studied this program from the sharia aspect by referring to fatwa No. 86/DSN-MUI/XII/2012. The interviews showed that the management has carried out the limitations regulated by fatwa number eighty-six, where this savings program with prizes can use wadi'ah contracts with several requirements, namely: 1. the prizes must be in the form of goods and services; 2. prizes sourced from bank-owned funds; 3. prizes for institutional savings are not given to individuals; 4. prizes are not agreed in advance; and 5. prizes are given for promotional activities before the contract takes place. Meanwhile, if the contract used is muḍārabah, then the requirements are: 1. prizes must be in the form of goods and services; 2. prizes sourced from bank-owned funds; and 3. prizes for institutional savings are not given to individuals.
BPRS Insancita also conducts an income smoothing program by giving the right to share the result (isqath al-ḥaqq/at-tanazzul al-ḥaqq) to funding customers by referring to No. 87 / DSN-MUI / XII / 2012 on Income Smoothing Method of third party funds. They did this in September 2021 for 75 million Rupiah (0.5%). The savings/giro program with prizes is also owned by Bank Syariah Indonesia (BSI) if they use a wadi'ah contract. The prize must be in the form of goods and services. It is sourced from bank-owned funds, and institutional savings are not given to individuals. The prizes are not agreed upon in advance, and prizes are given for promotional activities before the contract. Meanwhile, if the contract used is muḍārabah, then the requirements are: (1) prizes must be in the form of goods and services; (2) prizes sourced from bank-owned funds; (3) prizes for institutional savings are not given to individuals. The research above shows that Islamic bank management understands the theoretical framework, standards, and limitations of hybrid contracts on Islamic bank funding products. This dramatically affects the increase in the portfolio of funding products through a prize program for funding products, especially Islamic bank savings products, and maintaining customer loyalty through the income smoothing program.

Conclusion
This study shows that the fatwa directly related to funding products does not contain a hybrid contract (multi-contract). However, some of its derivative fatwas have mujtami'ah contracts, including Fatwa No. 86/DSN-MUI/XII/2012. The rule focuses on the prizes in fundraising for Islamic Financial Institutions. It consists of muḍārabah/wadī'ah contracts and prize contracts collected in one transaction in demand deposits, savings and time deposits, and fatwa No. 87/ DSN-MUI/ XII/2012 concerning Income smoothing method for third party funds consisting of muḍārabah contract and isqaṭ al-Ḥaqq contract. There are several standards and limitations in the fatwa related to the two funding products that must be considered by the management of Islamic banks as described in fatwa No. 86 and 87. This study also shows that Islamic banking management, in general, has understood the theoretical framework, standards, and limits of hybrid contracts on Islamic bank funding products, although not in detail. Their understanding of the fatwa is textual, not philosophical. However, this increases the portfolio of funding products, including prize programs, specifically muḍārabah savings products and income smoothing programs to maintain customer loyalty. Their only textual understanding can increase the development of funding products that compete with conventional banks, especially if they philosophically understand it. The management should understand the fatwa philosophically by conducting discussion forums involving the Sharia Supervisory Board and the National Sharia Council.