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Tuesday, 17 June 2008

Indonesia: 10 banks to be converted into syariah

Jakarta (ANTARA News) - Deputy Governor of Bank Indonesia Siti Ch Fadjrijah said that about ten banks planned this year to change the status of their syariah units into syariah commercial banks, like BRI Syariah, BNI Syariah, and Bukopin Syariah.

"Some other banks, like Bank Panin when takin-over Bank Harfa Irna Gustia, and PT Bank Victoria International Tbk (BVIC)when taking-over Bank Swaguna, also reported they planned to change their status into syariah banks," Fadjrijah told a syariah banking discussion held by banking and monetary news reporters in Jakarta Friday.

The other banks with the same plan include those to be taken over by an AL Barakah investor from Saudi Arabia.

"Thus, this year there will be 10 wholly syariah banks," said Fadjrijah but refusing to reveal the names of the four other banks.

This development, she added, is an indication of the high potential of the syariah banks in Indonesia although their growth is still short of Bank Indonesia`s expectations.

"The potential of our syariah bank market is very high, but yet to be fully developed. And even a growth of five percent is still difficult to reach," she said.

She added that the assets of syariah banks in the first quarter fo 2008 had reached Rp37.6 trillion, and those of conventional banks Rp1,800 trillion, while the projected growth of syariah bank assets was set at 5 percent of those of conventional banks, or Rp 92 trillion.

"The growth of syariah bank assets had reached 37 percent which is higher than that of conventional banks, but to reach 5 percent of the total of commercial bank assets is not easy," he added.

She said further that BI is constantly encouraging the development of syariah banks by increasing syariah services, opening more branch offices, including conversions from syariah units to syariah banks and reducing the capital required for the establishment of syariah banks.

Commercial banks, she added, can also use their branch offices to build a bank syariah channeling office. "Many other things had been done by BI, but its growth cannot be so rapid has expected", she said.

In the meantime, commission XI deputy chairman of the House of Representatives Endin Soefihara said on the occasion that in the near future her office will finalize the syariah banking draft law with the government.

"Hopefully it will be completed soon after the finance minister, legal affairs and human rights minister, and the religious minister, put their signature," he said.

Endin hoped that the law will encourage the establishment of new syariah commercial banks and syariah people`s funding banks.

(Antara News)

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