Agency Problem Handling Strategy in Shariah Bank

In the period 2018 - 2020 there were 21, 8 and 26 findings of internal fraud cases at Bank Muamalat in the GCG report. Meanwhile, in BNI Syariah there are 8 to 9 findings of internal fraud contained on the official BNI Syariah website. Sharia Bank is a banking institution that is carried out based on sharia principles. Therefore, this study outlines various problems that may cause agency problems in Islamic banks. This research uses ANP research methods to describe problems and find solutions related to Agency Problems in Islamic Banking. The main problem causing the Agency Problem is the lack of supervision on the profit-sharing financing mechanism, in line with the priority of solutions related to agency problems, namely routine supervision related to financing that has been distributed. This result was agreed upon by the speakers with a rater agreement value of W = 0.24.


INTRODUCTION
Islamic banking in Indonesia is facing the challenge of rapid ecosystem change, as in the Islamic banking road map issued by the Financial Services Authority (OJK) for 2020-2025, it  However, the reality that occurs in the implementation of governance in Islamic banking has not been carried out properly, this is evident from the form of supervision that needs to be proven the process starting from governance structure, governance process, and governance outcomes, and the discovery of findings of internal fraud in Islamic banks, as the initial data of reality, namely at Bank Muamalat as of 2018-2020, there were 21, 8, 26 findings published in the GCG Report.Meanwhile, BNI Syariah as many as 8 and 9 findings (data obtained from the bank's website).In fact, internal fraud in Islamic banks is not only the subject of poor governance, but it is necessary to study why internal fraud occurs even though there are already supervisory functions. 5ased on these problems, it is of particular interest for the author to explore research on Islamic banking governance because of various problems that may occur where due to conflicts Potential interests from shareholders and management of Islamic banks or known as agency problems.The issue of this problem was also carried out previous studies which stated that the implementation of Good Corporate Governance was realized from the availability of the board of directors, board of commissioners, and internal control mechanisms as well as the existence of sharia supervisory boards that play a role and synergize to overcome the problem of fraud or fraud that occurs because of banking as an intermediation financial services institution who are very vulnerable to fraudulent actions that can have an impact on the financial performance of banks 6 .
Although the organizational structure of Islamic banking has been supported by the sharia board of commissioners and supervisory board, it is not only needed in an institutional structure but also fundamental functions of the This is the analysis of inequality that occurs theoretically and practically that there has not been a good conformity of the organizational structure of islamic banks today with The authority and responsibility of the sharia supervisory board and other devices.Then the problem of agency problems that may occur in Islamic banking governance in Indonesia was also conducted research that outlined that the occurrence of agency problems in the implementation of profit sharing financing, namely mudharabah and musyarakah.Where the research revealed provision of profit sharing financing, especially in mudharabah, is very related to agency problems, because agents have the potential to commit deviations financial results of projects that are carried out because the control of the owner of capital is not optimal.These deviations relate to aspects of moral standards, the ineffectiveness of profit-sharing models, to employers, to costs, and to efficiency issues. 8rom several previous studies, various discussions were found about corporate governance (GCG) on company financial performance, on agency theory, principal agent problems, principal contracts both in banking globally and banking in Indonesia.This is an interesting discussion and continues to be developed because of course, the implementation of good governance will produce a healthy banking system.The following are the results of the governance (GCG) discussion search conducted through the following VOS Viewer tool: Banking management is considered by shareholders, management, and banking regulators. 9uch as of salary payments for management, concentrated ownership, GCG. 11he previous studies that have been described above become unequivocal information about the possibility of problems in the banking system in this case the agency problem that becomes kelol a main in the study.The difference between this research and previous studies is that previous studies have examined financial performance problems that have an impact on the occurrence of bank governance problems that have not been effective from Tata Elola principles, examine conflicts of interest between principals and agents through the provision of profit-sharing financing.Meanwhile, this study outlines the possibility of indications of agency problems not only in principles but a combination of the existence of stakeholders in the banking industry.how the functions of the governance apparatus have worked well by linking them to the functions of the sharia supervisory board and reviewing them from the regulations that have been regulate so as to produce suggestions and recommendations to internal parties in terms of Islamic banking and external in terms of regulators if there is a governance process in Islamic banking that has not effectively carried out even though there are regulations and internal bank systems that regulate governance.
11 Boshkoska, M. (2015).The agency problem: Measures for its overcoming.International Journal of Business and Management, 10(1), 204.Through the modification of this research, of course, which aims to analyze the implementation system of Islamic banking governance in Indonesia, how the governance conditions occur in the banking industry, then analyze the indications agency problem, then after knowing the indications that occur, mitigation is analyzed so that the agency problem can be minimized.
These results will contribute to Islamic banks and regulators in providing recommendations in the future.
The specific purpose of this study is to minimize agency problems in Islamic banks through Shariah Governance as seen from various governance components including the Board of Directors, the number of Audit Committees, the number of Risk Monitoring Committees, the number of internal fraud, the frequency of meetings of the Board of Commissioners and the Sharia Supervisory board and the Board of Directors, as well as the level of bank governance.And the proxy of the principles of governance in general and its sharia principles whether they have been applied by Islamic banks or not so that the impact of agency problems arises.With this Shariah Governance model research recommending to Islamic banks and to regulators to consider every financial activity in the principles of governance and governance, regulators do not only assess Islamic banks through the level of bank governance without considering the governance process. in the Islamic bank.This point is a specific specification in this study because there has been no other study that examines the problems that occur in the governance of Islamic banks that not only prioritize financial performance but also recommend to regulators even though regulators have issued regulations regarding governance 12 .

METHODS
This research has used the Analytic Network Process (ANP) method.There were several stages before the model was obtained.In the first stage, a literature study was carried out on various sources relevant to the research and made a list of open questions.These questions have been used to conduct in-depth interviews to gain an in-depth understanding of agency problems in the Indonesian Islamic banking industry.The results are used to design the Analytic Network Process (ANP) network framework model as well as to design the questionnaire model needed to obtain the required data 13 .The questionnaire has been filled in by respondents who are considered experts on this issue.Respondents came from four Islamic banks in Indonesia, namely Bank Sumut Syariah, Bank Syariah Indonesia, Bank Aceh and Bank DKI Syariah.One other respondent came from the Financial Services Authority.All respondents must have criteria, namely having worked in Islamic 12 Wu, X.. Corporate governance and corruption: A cross-country analysis.Governance, 18(2), ( 2015),151-170.
financial institutions for more than five years and being in the minimum position of Manager.The following is a chart of the sampling stages: The data has been processed using Super Decision software to determine the main causes of the agency problem so that the right solution can be produced.

RESULT AND DISCUSSION
Based on the identification carried out regarding problems and solutions through literature studies and interviews with practitioners and regulators, the ANP network structure was developed as follows: After creating the ANP network model, the questionnaires were distributed to five informants who came from four practitioners from different Islamic banks in Indonesia with a minimum level of position as Manager and one from the Financial Services Authority.As for the results of processing from the Super Decision software, priority values are obtained for the causes of agency problems and solutions for agency problem problems.The results of data processing can be seen in the following table:

CONCLUSION
Islamic banking is an industry with a highly regulated business.This business requires a mechanism that ensures the bank complies with all internal and external rules.Governance that is not yet optimal causes many problems, one of which is the agency problem.The main cause of agency problems is due to sub-optimal supervision of PLS financing that has been distributed.Therefore, in accordance with the results of the ANP, these problems can be overcome by adding human resources who can carry out routine supervision regarding the financing that has been channeled.Another solution that can be done is to create a financing screening mechanism that is able to anticipate the possibility of irregularities in the implementation process of financing made by customers.

ACKNOWLEDGMENT
This research was supported by the Institute for Research and Community Service, Universitas Muhammadiyah Sumatera Utara, so that this research could be completed.
Figure 1.Principal Agency and Governance Issues

Figure 2 .
Figure 2. Chart of The Sampling Students

Figure 3 .
Figure 3. ANP Network Models Source: Results of Literature Study and Interview (2021)

Table 1 .
Priority Value of Agency Problem Causes

Table 2 .
Agency Problem Solution Priority Value