With the existence of the Covid-19 pandemic, many effects and consequences are happened by the virus. One of them is the uncertainty of the global economy that threatens economic conditions and the stability of the national financial system. Inadequate government efforts in done the state budget are based on threats to dry banking liquidity. Islamic banking liquidity has a big influence on the economy in Indonesia, especially in UMKM.
On the Pro side. With the existence of Covid-19 pandemic, all people in the world are required to do social distancing. This has an effect on the UMKM business activities. The UMKM business activities can't run smoothly as usual. UMKM can only operate within a specified time limit. Therefore, UMKM can't pay financing in Islamic banks in a timely manner. With the current situation which is not possible to get income quickly, the Islamic banks provide relaxation to UMKM. The relaxation is in accordance with POJK No.11 / POJK.03 / 2020 concerning the National Economic Stimulus as a Contercyclical policy on the Impact of Corona Virus Disease.
Relaxation is a relief installment payments during the corona virus pandemic in accordance with the conditions and types of business customers. Relaxation in Islamic banks is called Restructuring. To be able to submit a restructuring, the customer must contact the officer of the Islamic bank then submit a written request to the bank officer regarding the restructuring is done by face to face through social media. With the restructuring, the liquidity of Islamic banks is decreased. This data is sourced from Binis.com.
On the cons side. According to data sourced from One Banten Website, at the end of 2019, Corona Virus Disease happened various adverse effects for every country in the world, one of them in Islamic banking. At present, the liquidity held by every Islamic banking in Indonesia is declining. This situation is happened by the customer being unable to pay debts or obligations to the bank. As a result of the weakening of the people's economy, so that people's income is reduced. Therefore, the supply of cash funds available in Islamic banking will decrease. Meanwhile, Islamic banks still have to pay off operational costs and profit sharing ratio for customers.
Islamic banking must pay more attention to the challenges of managing liquidity, even during a pandemic like today. The condition of sharia bank liquidity is inseparable from the global situation which is the concern of many parties. Because liquidity in the current conditions is very important for Islamic banks in carrying out their business activities. Is it to address urgent needs, fulfill customer financing, and provide flexibility in seizing profitable investment opportunities.
I got information from kontan.co.id, the available Islamic banking liquidity must be sufficient, not too small or too large. Because if it's too small it can interfere with daily operations. While, if it's too large it can reduce efficiency and have an impact on the low level of profitability. So, despite the current pandemic, Islamic banks must be able to manage their liquidity well.
From the explanation above, it can be concluded that the corona virus pandemic has a bad impact on Islamic banking in Indonesia because it can affect the liquidity of the banking system. Islamic bank liquidity is currently declining because many customers, especially UMKM can't repay their debt installments. UMKM activities can't operate as usual, so there is no income coming in to pay debts to Islamic banks. Therefore, Islamic banks provide restructuring to UMKM according to their efforts. So, currently Islamic Banks must be able to manage bank liquidity well so that Islamic banks can still operate during this pandemic and have sufficient funds for the future.