Under the Act No. 21 of 2008, Islamic banks in Indonesia as an intermediary institution are obligated to manage the resources simultaneously, the financial funds as well as the social funds, e.g. zakah, infaq, and sadaqah. This study aims to investigate the productivity change of social funds and financial funds of Islamic Banks in Indonesia. Non-parametric tests of Malmquist Productivity Index (MPI) is applied to annual data from period 2012 to 2017, encompassing post-reform of banking authority from Bank Indonesia to The Financial Services Authority (OJK) at 2012. The samples are nine Islamic banks in Indonesia which were able to provide the data during observation period. The results indicate that social funds are more productive than financial funds and productivity change tends to trade off. The productivity of social funds is progressed by 8.2% while the financial funds is regressed by 5.4%. Overall, the productivity change of Islamic banks is influenced by technological aspect rather than the efficiency aspect. Besides, BRI Syariah is the best performer in managing financial funds while BCA Syariah as the best performer in social funds. It implies that the policymakers may strengthen the supervisory and coaching to increase the Islamic banks’ productivity in both activities.

Abstract
1. Introduction
2. Literature Review/Research Background
3. Data and Methodology
    3.1. Malmquist Productivity Index
    3.2. Data and Selection of Variables
4. Results and Discussion
    4.1. The Outline of the Islamic BanksProductivity Index
    4.2. Productivity of Financial Funds VersusSocial Funds
5. Conclusion
References

• Nurodin USMAN(Department of Islamic Economics Law, Universitas Muhammadiyah Magelang, Magelang)
• Lilik ANDRIYANI(Department of Accounting, Universitas Muhammadiyah Magelang, Magelang)
• Zulfikar Bagus PAMBUKO(Department of Islamic Economics Law, Universitas Muhammadiyah Magelang, Magelang) Corresponding Author.