Below is a list with tagged columns and company profiles.

Today's Headlines Sharia Banking

  • OJK Urges Indonesia's Sharia Banks to Become More Selective

    OJK Urges Indonesia's Sharia Banks to Become More Selective

    Indonesia's Financial Services Authority (in Indonesian: Otoritas Jasa Keuangan, or OJK), the government agency that regulates and supervises Indonesia's financial services sector, urges the nation's sharia banks to become more selective in terms of disbursing credit in order to strengthen the quality of loans in Indonesia's Islamic finance industry.

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  • Finance: New Efforts to Boost Sharia Banking in Indonesia

    Finance: New Efforts to Boost Sharia Banking in Indonesia

    Although between 85 and 90 percent of the Indonesian population is Muslim, Islamic banking, also known as sharia banking (financing activity that is in line with Islamic principles), remains underdeveloped in Indonesia. In 2016 sharia banking assets only accounted for 5.3 percent of total assets in Indonesia's banking sector. Meanwhile in countries like Saudi Arabia and Malaysia these figures are much higher at 51.1 percent and 23.8 percent, respectively.

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  • BRI Syariah Plans IPO on the Indonesia Stock Exchange in 2018

    BRI Syariah Plans IPO on the Indonesia Stock Exchange in 2018

    BRI Syariah, the Islamic banking unit of leading Indonesian commercial bank Bank Rakyat Indonesia (BRI), is currently assessing the prospects of conducting an initial public offering (IPO) on the Indonesia Stock Exchange. Indri Tri Handayani, Corporate Secretary at BRI Syariah, will invite several supporting institutions active within capital markets to advise on this IPO plan, including the administrative matters. If BRI Syariah will indeed go-ahead with the IPO, then it will not be realized sooner than early 2018.

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  • Islamic Finance in Indonesia: Prospects for 2016

    Islamic Finance in Indonesia: Prospects for 2016

    The Masyarakat Ekonomi Syariah (Islamic Economic Society), a Jakarta-based non-profit organization focused on the socialization, advocacy, advisory, consultation and education to enhance the Islamic banking industry in Indonesia, predicts that Islamic finance (banking that is consistent with the principles of sharia) in Indonesia will grow around 15 percent (y/y) in 2016. This projection is made with the assumption that Indonesia's economic growth will reach 5.0-5.3 (y/y), inflation at 4.7 percent (y/y), and a rupiah exchange rate at IDR 13,900 per US dollar.

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  • Using Islamic Bonds to Boost Infrastructure Development in Indonesia

    Using Islamic Bonds to Boost Infrastructure Development in Indonesia

    In 2016 investors will be able to purchase about IDR 13.7 trillion (approx. USD $1.4 billion) worth of Islamic bonds (known as sukuk) to be issued by the Indonesian government. This amount is nearly double the amount of planned sharia-compliant sovereign debt paper this year (IDR 7.14 trillion). Indonesia will use proceeds from next year's bond sales to boost the nation’s infrastructure development (such as roads, ports, power plants, rail lines, bridges and Islamic universities).

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  • Islamic Banking in Indonesia: ‘I Love Sharia Finance Program’

    Islamic Banking in Indonesia: ‘I Love Sharia Finance Program’

    Indonesian President Joko Widodo stated during the launch of the “I Love Sharia Finance Program” that Indonesia should become the global center for Islamic finance (also known as sharia banking). The program, initiated by the country’s Financial Services Authority (OJK), was launched in Jakarta on Sunday (14/06). Islamic finance is a form of banking or banking activity that is consistent with the principles of sharia (Islamic law). In recent years, the global market for sharia-compliant financial instruments has risen robustly.

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  • Indonesia to Co-Found Islamic Investment Infrastructure Bank

    Indonesia to Co-Found Islamic Investment Infrastructure Bank

    Indonesia is set to co-found a new cross-border Islamic (sharia-compliant) infrastructure bank together with Turkey and Saudi-based Islamic Development Bank (IDB), a multilateral lender. Indonesian Finance Minister Bambang Brodjonegoro said that Indonesia will contribute more than USD $300 million as start-up capital for the establishment of the new bank, named Islamic Investment Infrastructure Bank (IIIB), which aims to boost infrastructure development in various countries.

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  • Islamic Finance in Indonesia: Sale of Sukuk Retail Bonds

    Islamic Finance in Indonesia: Sale of Sukuk Retail Bonds

    Indonesia eyes to raise IDR 20 trillion (USD $1.6 billion) from the sale of sukuk, Islamic bonds, to Indonesian citizens between 23 February and 6 March 2015. These three-year Sharia-compliant retail bonds (SR-007 retail sukuk) offer an 8.25 percent coupon rate, the highest premium over existing securities in two years. The minimum order for these bonds starts at IDR 5 million and the maximum is IDR 5 billion. The Indonesian Finance Ministry said that proceeds of the debt sales will be used to finance the country’s state-budget deficit.

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  • OJK Sets New Rules in Indonesia’s Islamic Financial Services Industry

    OJK Sets New Rules in Indonesia’s Islamic Financial Services Market

    In a bid to enhance monitoring on Indonesia’s financial services sector, to deepen financial markets, and to widen people’s access to financial services, the Financial Services Authority (OJK) has introduced 20 new rules ranging from corporate governance to microfinance. The institution also revised Islamic banking rules involving asset quality and capital adequacy in an effort to increase the role of Islamic banking (sharia banking) in Indonesia’s financial system. Authorities target that Islamic banks hold more than 15 percent of the market by 2023.

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  • Islamic Finance in Indonesia: Sharia Banking is Large Untapped Potential

    Islamic Finance in Indonesia: Sharia Banking is Large Untapped Potential

    Having the world’s largest Muslim population and experiencing sustained economic growth at a pace of +5 percent implies that Indonesia harbours great potential for Islamic finance (sharia banking). However, Indonesia is yet to tap the full potential of the Islamic financial services market. As an illustration, with a figure of USD $24 billion, Indonesia’s Islamic banks only held 4.9 percent of the country’s total banking assets in 2013. This is small compared to Malaysia (where Islamic banking holds a 20 percent market share).

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Latest Columns Sharia Banking

  • Islamic Banking & Finance: What is Holding Back Sharia Finance in Indonesia?

    Islamic Banking & Finance: What is Holding Back Sharia Finance in Indonesia?

    Indonesia is known for being home to the world’s largest Muslim population. More than 230 million Indonesians – which is about 88 percent of Indonesia’s total population – are categorized as Muslim. In fact, nearly 13 percent of all Muslims in the world, today, live in Indonesia. These are very impressive numbers and surely impact heavily on Indonesian society, the economy, and politics.

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  • Indonesia's Conventional Banks to Spin Off Islamic Units by 2024

    Indonesia's Conventional Banks to Spin Off Islamic Units by 2024

    Indonesia's Financial Services Authority (OJK), the government agency that regulates and supervises the nation's financial services sector, is preparing a new regulation that requires conventional financial institutions in Indonesia to spin off their Islamic financial units before 17 October 2024. Islamic finance or Islamic banking is a type of banking that is in accordance to the principles of sharia (Islamic law). Based on the regulation, those financial institutions that generate at least 50 percent of their capital through Islamic finance have to comply with the new rule.

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  • Islamic Banking in Indonesia Explained: New Rules & Foreign Ownership

    Islamic Banking in Indonesia Explained: New Rules & Foreign Ownership

    Indonesian financial authorities are considering to ease foreign ownership limits for local Islamic banks and to promote new sharia-compliant financial tools in an effort to make the Islamic finance industry more attractive to foreign investors and the Indonesian population. Despite having the world’s largest Muslim population and being a dynamic emerging economy, Indonesia plays only a very minor role in the global Islamic banking industry. Meanwhile, domestically, Islamic banking still seriously lags behind conventional banking.

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  • Islamic Banking in Indonesia: Boosting Syariah Finance

    Syariah banking or Islamic finance is a large untapped potential in Indonesia, a country where about 13 percent of the total global Muslim population live. With nearly 90 percent of the 250 million people in Indonesia adhering to Islam, the market share of syariah (sharia) finance is remarkably low. At USD $24 billion, Islamic banks in Indonesia only held 4.9 percent of the country’s total banking assets in 2013, hence making Indonesia’s Financial Services Authority (OJK) decide to launch a five-year roadmap in a move to boost syariah banking.

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