Comparison of the Concepts of Ta'widh and Ta'zhir in the Application of Late Fees on Sharia Cards Based on the Fatwa of the DSN-MUI.

Abstract

The issue of late charges on Islamic credit cards has become a significant concern in maintaining compliance with Sharia principles, particularly in distinguishing between compensation for actual losses (ta’widh) and moral sanctions (ta’zhir). This study aims to analyze and compare the concepts of ta’widh and ta’zhir in the application of late payment charges on sharia card products in Indonesia, based on DSN-MUI Fatwa No. 43 of 2004 concerning Compensation and DSN-MUI Fatwa No. 17 of 2000 concerning Sanctions for Able Customers Who Delay Payments. This research employs a normative-comparative legal method with a deductive approach and qualitative analysis of primary legal materials, including DSN-MUI fatwas, OJK regulations, and policies of Islamic financial institutions. The findings reveal that ta’widh functions as compensation for proven actual losses and constitutes the right of financial institutions, while ta’zhir serves as a moral sanction, the proceeds of which must be allocated to social funds. The study underscores the importance of distinguishing between these two concepts to ensure Sharia compliance and to establish a fair and proportional sanction system in the practice of Islamic card operations.