ABSTRACT
According to the Indonesian Law No. 21 of 2008 on Islamic Banking, any financing that is based on mudharabah contract is technically intended to meet the interests of businesses for gaining capital or additional capital to run a productive business. If a sharia bank requires collateral under a mudharabah financing contract, it would violate the principles of mudharabah financing itself, as mudharabah is not a loan arrangement that requires any collateral. Therefore, if a mudharabah financing contract is not recognized as a mutually beneficial arrangement, it can cause a problem of injustice. The first part of this paper discusses the concept of a regulation of collateral in the mudharabah financing contract. The second part constitutes an analysis on the imposition and application of the collateral system in the mudharabah financing contract under the Law No. 21 of 2008. This research applies a legal normative method by the statute approach namely the Law No. 21 of 2008 on sharia banking. The findings of the research show that the application of the collateral system is to avoid business risks, complying with the principle of prudence and caution against the moral hazard of business actors.
