From Local Wisdom to Regulatory Practice: The Socio-Economic Dynamics of Implementing Qanun LKS in Aceh’s Islamic Banking Transformation

Ahmad Fauzi Qusyairi; Sukardi Jerohdi

Authors

Ahmad Fauzi Qusyairi Sekolah Tinggi Agama Islam Negeri Teungku Dirundeng Meulaboh, Indonesia
Sukardi Jerohdi Sekolah Tinggi Agama Islam Negeri Teungku Dirundeng Meulaboh, Indonesia

Keywords:

Financial Inclusion, Institutional Economics, Islamic Banking, Local Wisdom, Policy Implementation

Abstract

This study investigates the implementation of the Qanun Lembaga Keuangan Syariah (Qanun LKS) in Aceh as a strategic integration of Islamic local wisdom into public regulation of the economic system. Moving beyond its role as a financial instrument, Qanun LKS is examined as part of the Islamisation of the economy grounded in Aceh’s long-standing Islamic cultural heritage. Adopting a socio-economic perspective, this qualitative library research employs social change theory and institutional economics to analyse how the policy influences community behaviour, institutional structures, and patterns of financial inclusion. The findings identify three main dynamics: (1) Aceh’s Islamic cultural capital serves as a key source of legitimacy for modern Islamic banking regulation; (2) tensions arise between regulatory ideals and practical realities, leading to social resistance, institutional adaptation, and cross-bank customer migration among both Muslim and non-Muslim clients; and (3) a phased policy implementation model is essential to address socio-cultural diversity while achieving regulatory objectives. This study offers a conceptual framework for gradual policy implementation in regions with strong religious cultural capital and underscores the socio-economic importance of local wisdom in shaping sustainable Islamic economic governance.

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