ABSTRACT
Growth in the application of sharia in economic activities in Indonesia has been marked by the establishment of many increasingly diverse economic institutions that are built upon these religious principles. However, the implementation of a sharia-based economy is not free from disputes. One means of resolution is through mediation. However, there are certain impediments to carrying out mediation in this area, including the applicability of varied regulatory provisions, the limited number of mediators, and a limited degree of implementation. The issue in this paper is whether mediation can create ishlah in resolving disputes in sharia banking and how it ought to be implemented in order to abide by the principle of benefit for the general public. The research discussed in this paper uses a normative method of analysis and practices in sharia banking. The recommendation offered herein is that dispute resolution through mediation in sharia banking requires regulations that incorporate procedures that are in line with the ishlah concept, mediators capable of carrying out such mediation who are deeply knowledgeable about sharia banking, and support from the government in building a sharia mediation institution inside as well as outside the courts.
