LEGAL ISSUES IN SHARIAH A PAWN GOLD PRACTICE IN INDONESIA

Abstract

In Indonesia, the function of pawning as financing instrument has shifted into investment by continuously doing pawning and buying. Current regulation has allowed this practice for ban ks, pawnshop and financial institutions to offer pawn gold. It is not for financing activity but for investment activity and not comply with the Shariah principles. This study uses normative juridical approach by using secondary data from the legal resources, with specification of research methods using descriptive analysis. The conclusions from this study are that the practice of pawning gold is inconsistent with the pawning function as financing mechanism and it’s kind of investment activity. Nowadays forming regulation is need to be addressed.