Purpose: Financial institutions, which function as intermediaries in the economy, have an important role in facilitating the flow of funds between those who have excess funds and those who lack funds. One form of financial institution that is growing rapidly in Indonesia is Islamic banking, which operates based on Islamic sharia principles, such as mudharabah, to support fair and riba-free financing. However, in its implementation, disputes often arise between customers, banks, and entrepreneurs, especially related to the implementation of mudharabah contracts. To handle this kind of dispute, Law No. 21 of 2008 on Sharia Banking provides two channels for dispute resolution: first, through litigation in the Religious Court, and second, through non-litigation channels, namely by using alternative dispute resolution institutions such as the National Sharia Arbitration Board (BASYARNAS).   Results: The arrangement of this dispute resolution mechanism is very important to maintain integrity and compliance with sharia principles, ensure legal certainty, and provide a sense of security for all parties involved in Islamic banking transactions in Indonesia.