| Unlike conventional banks which faced serious problems to stay operational following the economic crises hitting Indonesia in 1997, Shariah banks have developed rapidly. There are 3 commercial shariah banks namely: Bank Muamalat Indonesia, established in 1992, Bank Syariah Mandiri established in 1999, and Bank Mega Syariah established in 2004, meanwhile there are 19 shariah Business Units in Conventional Commercial Banks and 105 units of Bank Pembiayaan Rakyat Syariah (BPRS) or Shariah Bank for People’s Financing. The system applied by Shariah banks is different in characteristics from that in other banks. In this paper, the author will explain the significant differences between the operational system of shariah banks and that of conventional banks, the transaction principles applied in shariah banks and the regulations, as well as the economic and legal problems faced by shariah banks as well as the realization of the shariah principles practice. The difference in the operational principles between shariah banks and conventional banks. |