ANALYSIS OF GOOD CORPORATE GOVERNANCE (GCG) PRINCIPLES IN PERSPECTIVE OF ISLAM IN SHARIAH BANKING Hadiah Fitriyah and Syarifatun Ni’mah Faculty of Economy - Muhammadiyah University of Sidoarjo Jalan Raya Gelam No.250 Candi Sidoarjo hadiah_az@yahoo.com Abstract This study aimed to investigate the principles of Good Corporate Governance (GCG) in perspective of Islam in sharia banking. This study was a qualitative study, and the method of analysis used in this study was theory triangulation that crosschecked the result of interview, observation, and documentation with the existing theory. The result of study obtained based on data analysis indicated that the principles of GCG in Shariah Bank “X” had been implemented well in accordance with the existing regulations and containing four characteristics owned by Rasulullah, i.e.: shiddiq, tabligh, amanah, and fathanah. However, the result of analysis indicated that the principles of GCG in Shariah Bank “X” had not been optimally implemented in accordance with the perspective of Islam, because, from the result of the study, there was no statement or data supporting that Shariah Bank “X” prioritized its responsibility to Allah. The result of this analysis was strengthened by a statement from Shariah Expert stating that the principles of GCG in Shariah Bank “X” were not optimal in accordance with perspective of Islam. Keywords: Good Corporate Governance, perspective of Islam, shariah banking 1. Introduction One of business activities whose existence has an important role in current economic world is financial institutional business of banking. Bank is a business entity collecting fund from people in form of savings then distributing them to people in form of credit or other forms to improve the level of people’s life (Anshari 2009, h.4). Therefore, banking becomes one of important sectors with significant effect towards economic activities of people. It can be seen from the large number of people’s interest to choose to save their fund in bank. However, banking we know well is conventional banking that, in its operation, uses interest system. Whereas, as a country with majority of Moslem people, interest system or usury is forbidden in Islam. The prohibition toward usury activity is contained