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Pricing determination for profit loss sharing (pls) products in islamic banking : a case study on pt islamic bank xyz
Since the financial crisis in 2008, Islamic banking growth is appreciable and has
an outstanding performance. Bank Indonesia has announced that Islamic banks
are resistance with the financial crisis. The reason is because the financing
activities in Islamic banks are more directed to domestic economic activities or
real sector business because Islamic economics in general preserves the stability
of economics with the productivity of human beings. In its development, Islamic
banking is led by two major products which are mark-up financing and profit loss
sharing financing. Profit loss sharing (PLS) is a main feature of Islamic banks.
The reason is because Profit Loss Sharing is a substitution of the interest
mechanism in financing products. Neverthless, these product is not favorable in
Islamic banking business since mark-up financing is still dominating. Many
reasons that states that these product (PLS) are too risky and overpriced (costly).
This research is interested to see the problem from a different view which is the
pricing determination on Profit Loss Sharing products. This research is attempts to
describe the pricing determination and the competitiveness over pricing on Profit
Loss Sharing (PLS) products in Islamic banking and choose PT Islamic Bank
XYZ as the object of case study
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