Dual Banking in Indonesian Islamic Economic Discourse: A Literature-Based Examination

Abstract

This study investigates the evolution and dynamics of the dual banking system within Indonesian Islamic economic discourse. By employing qualitative literature analysis, the article explores how scholars have conceptualized the coexistence of sharia-compliant and conventional financial institutions in Indonesia, a Muslim-majority country with a pluralistic legal and economic system. The research synthesizes theoretical models such as institutional dualism, legal pluralism, and hybridization theory to understand the philosophical foundations and practical implications of the dual system. Findings reveal a shift in scholarly perspectives—from ideological resistance to pragmatic integration—highlighting both convergence in regulatory practices and divergence in ethical foundations. The discourse reflects persistent challenges in aligning Islamic values with modern financial infrastructure, but also presents opportunities for regulatory coherence and ethical reform. The study offers significant contributions by mapping discursive trajectories, identifying key points of convergence and divergence, and proposing integrative pathways grounded in Islamic economic principles. The insights presented have theoretical implications for Islamic finance and practical relevance for policymakers and financial regulators engaged in system design and governance within dual banking environments.