Legitimacy Problems in Sharia Compliance Due to Fraud at Islamic Banks in Indonesia

This research explains the problem of sharia compliance that fraud cases eroded in 2015 to 2019 in Islamic banks in Indonesia. In comparison, the level of Islamic bank's financial performance in Indonesia, which is categorized in good condition, cannot explain the situation of sharia compliance. This study uses fraud as a dependent variable that results in a decrease in the legitimacy of sharia compliance but not with the financial performance of Islamic banking. Sharia compliance is a matter of legitimacy and a value of Agency where perceived in the variables of this research. At the same time, the independent variables of this study are proxies in the Islamic income ratio, profit sharing ratio, Islamic investment ratio, zakat performance ratio, equitable distribution ratio, and director employee welfare ratio. This study used 11 Islamic commercial banks with a research period from 2015 to 2019, and the sample used amounted to 41. The method used is multiple regression analysis of panel data. The results showed that IsIR, PSR, IIR, and DEWR positively affect indications of fraud in Islamic banks in Indonesia.