Wadiah Principle
Wadiah translates literally from Arabic as “placement”, which is placing something to others to be maintained and or to be kept. While in term Wadiah can be defined as an agreement for safekeeping of funds made between a holder of funds and a party entrusted with the safekeeping of funds.
Wadiah specified into two types; (i) Wadiah Yad Amanah, (ii) Wadiah Yad Dhamanah. Wadiah Yad Amanah is an agreement for safekeeping of funds made between a holder of funds and a party entrusted with the safekeeping of the funds which in this principle the party entrusted shall not have any responsibilities concerning the damages or losses happened to the funds and/or goods kept by the party entrusted unless as the consequences of his negligence. The most possible transaction pursuant to this principle is safe deposit box.
While the Wadiah Yad Dhamanah is also a safekeeping of funds agreement between a holder of funds and the party entrusted with the safekeeping of the funds which in this principle the party entrusted may use or benefit the funds and/or goods kept. And of course, the holder of funds will obtain such benefit from the fund using. The entrusted party shall give such incentive to the holder of funds in the form of bonus or Athaya. In this principle the party entrusted shall responsible for any damages happened to the funds. In practice this principle may applied in the clearing account.
SWBI
Bank Indonesia defines SWBI as a certificate issued by Bank Indonesia as evidence of short-term safekeeping of funds under Wadiah principle.
Legal based concerning SWBI
There is some Bank Indonesia’s prevailing regulation concerning Bank Indonesia Wadiah Certificates (SWBIs) namely:
Bank Indonesia Regulation No. 6/7/2004 concerning Bank Indonesia Wadiah Certificates
Bank Indonesia Circular Letter Concerning Operating Procedure For Bank Indonesia Wadiah Certificates No. 6/6/DPM
Current progress of SWBI
Regarding to the Annual Report on Shari’a Banking 2005, the average of SWBI outstanding position in the year of 2005 experiencing such decreasing, compare with the previous year namely from Rp 945,8 billion to Rp 510,7 billion. This condition have been influenced by the Shari’a Bank preferential judged that the placement in the inter bank money market pursuant to Mudharabah contract considered more benefit compare with the Placement in Bank Indonesia Wadiah Certificates (SWBI) which basically in the basis of Wadiah.
Moreover in the highly competitive current situation with conventional bank as the effect of the interest rate increasing. According to the Sharia Bank observer, the decreasing of SWBIs outstanding position might also caused by the value of interest rate of SWBI,s is lower than Bank Indonesia Certificates (SBIs). Therefore Shari’a Bank to choose finance sector in the scheme of Murabahah or Mudharabah in which considered more benefit rather than SWBIs to distribute their idle funds to get higher gain.
And mostly, Shari’a Bank chooses SWBI transaction to prevent such over liquidity they faced and they found difficult to distribute their funds. It’s all due to Sharia principle in which prohibited interest transaction so they have to highly selective in distributing their funds. In this competitive banking business SWBIs becoming an option beside to try to find right way to distribute their idle fund.
