Tagged: Jakarta Globe

Indonesian Government to Establish New Shariah Bank

Indonesian Government to Establish New Shariah Bank

The Indonesian government is planning to establish a Shariah-compliant bank in order to manage Rp 40 trillion ($4 billion) worth of Indonesian hajj funds. State-Owned Enterprises Minister Dahlan Iskan said the establishment of the bank will support the implementation of a new policy issued by the Ministry of Religious Affairs obliging hajj funds to be managed exclusively by Shariah banks.Dahlan said the government wants to support the development of Shariah banking in Indonesia with the new bank since the sector controls only 4.9 percent of market shares in Indonesia’s banking industry, The government has stakes in four lenders that run their own Shariah units. None of these banks, however, focus solely on Shariah banking.

Indonesia Megabank Advances 20% Share Outlook: Islamic Finance

Indonesia Megabank Advances 20% Share Outlook: Islamic Finance

Indonesia’s proposed Shariah megabank would improve industry awareness, lower costs and help the bank compete to win plantation, mining and infrastructure business. Combining the Islamic units of the government-held lenders is the most feasible of three options being considered by the State-Owned Enterprises Ministry. The other two options being considered are setting up a new state-owned Islamic lender or converting an existing government-held bank into a Shariah-compliant operation. It is possible the government could proceed with more than one of the choices. The ministry is currently in discussions with Bank Indonesia and will present a finalized proposal to the State-Owned Enterprises Ministry by the end of May. Government approval is expected by the end of the year.

Islamic Banks Poised for More Growth

Islamic Banks Poised for More Growth

Islamic Banks expect rapid growth in 2013. According to a central bankier, Indonesian banks will register higher profits in upcoming year despite more stringent rules imposed by the Indonesian central bank. The total amount of Islamic assets including …