Roadmap of
Indonesian Islamic Banking
2015 - 2019
OJK International Conference
on Islamic Finance
Jakarta, 12 November 2015
Nelson Tampubolon
Chief Executive in Charge of Banking Supervision - OJK
Existance of Islamic Banking
give more varied choices of banking
instruments and services
the creation of financial market
deepening and financial system stability
contribute in supporting financial
inclusion
2
Indonesia’s position in the Global Islamic Finance
Internationally, Indonesia is seen to have great potential and
strength in the global Islamic finance development - 10 largest
countries in the field of Islamic financial
2014 Top 10 Islamic Finance
Asset ($ Million)
1. Malaysia 423,285
2. Saudi Arabia 338,106
3. Iran 323,300
4. UAE 140,289
5. Kuwait 92,403
6. Qatar 81,027
7. Bahrain 64,644
8. Turkey 51,161
9. Indonesia 35,629
10. Bangladesh 19,938
3
Indonesia Islamic Banking - Asset Growth
IDR billion
300,000
272,343
250,000 242,276
200,000 195,017
150,000 145,466
97,519
100,000
66,089
49,555
50,000 36,537
20,916 26,722
15,331
0
1 2 3 4 5 6 7 8 9 10 11
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year
average asset growth of 33,2%
4
Market Share of Indonesia Islamic Banking
August 2015 Islamic
Banking
Asset
IDR 274,306
billion
Total
Indonesia
Banking
Asset
IDR
5,925,677
billion
5
Challenges in Islamic Banking Development
Misalignment in the visions and lack of coordination between the
government and the authorities in Islamic banking development
Capital is still inadequate, industry scale and individual banks are still
small, as well as low efficiency
STRATEGIC ISSUES
High cost of fund that causes limited financing segment
Unvaried products and services that do not yet meet public expectation
Quantity and quality of Human Resources (HR) is not yet adequate and
Information Technology (IT) is not yet capable of supporting product
and service development
Public understanding and awareness that are still low
Regulation and supervision which are not yet optimal
6
Roadmap of Indonesian Islamic Banking 2015-2019
Strategic Strategic Strategic Strategic
issue issue issue
issue
Strategic Strategic
issue issue
Strategic
issue
Roadmap of Indonesian Islamic Banking
2015 - 2019
Vision 7 Policy 41 Priority
To Establish Islamic banking
Directions Programs
that provides significant
contributions to sustainable
economic growth, equitable
development, financial system
stability, and has high
competitiveness
7
7 Policy Directions
1. Strengthening synergies between the authorities and
government and other stakeholders in context of
policy development;
2. Strengthen capital and business scale as well as
enhance efficiency;
3. Improve funding structure to support expansion in
financing segment;
4. Improve service quality and product diversity
5. Improvement of the quantity and quality of HR & IT as
well as other infrastructure
6. Enhancement of public literacy and preference
7. Strengthening and harmonizing regulations and
supervision
8
Priority Programs
1. Priority programs to strengthen synergies for policy
development between banking authority with
government and other stakeholders, including:
The establishment of KNKS: representatives from
government, the FSA and central bank in Indonesia;
Management of government funds; Placement of SUKUK
funds in Islamic banking
Forums of cooperation and coordination with the judiciary,
universities and deposit insurance agency as well as the
establishment of a research and development center of
Islamic banking
Initiate and develop Islamic investment banks, particularly
for the purpose of financing government projects
9
Priority Programs
2. Priority programs to enhance
competitiveness of Islamic Banking, such as:
Strengthening capital and business scale of Islamic banking
through additional paid-up capital; Establishment of state-
owned/district government-owned Islamic Bank;
Leveraging; Spin off sharia windows
Improve funding structure and expand financing segment
through incentive framework for expansion of productive
financing in infrastructure and corporate sectors
Optimization of haj fund management through Islamic
banking as well as waqaf, zakat, infaq and Shadaqah
10
Priority Programs
2. Priority programs to enhance
competitiveness….., continued:
Involvement of Islamic banks in the management of
government’s fund and government-owned enterprises’s
funds
Promote placements of funds, resulting from sukuk
emissions, at Islamic banks
Improve service quality and product
diversityImprove service quality and product
diversity
Improvement of the quantity and quality of HR &
IT as well as other infrastructure
11
Priority Programs
3. Priority programs to enhance public literacy and
preference of Islamic banking & its products, such as:
Islamic Banking (iB) campaign program on Islamic
banking products and strengthening of Islamic banking
positioning, differentiation, branding
Enhance Islamic financial literacy through education and
socialization
12
Priority Programs
4. Priority programs to improve the quality of regulation
and supervision of Islamic banking, such as:
improving the institutional regulations and policies
related to Financing to Value (FTV)
guidelines of the resilience of Islamic banks stress test
and taxonomic system of regulation related to Islamic
banking
13
Thank you
Link Roadmap: bit.do/rpsi2015
