The Future of Indonesian

Islamic Banking in Facing AEC:

Strategy of Sustainable
Development of Islamic Finance

Kuliah Umum KIHES 2015, Universitas Indonesia,

28th October 2015

DR.Dhani Gunawan Idat.SH.MBA

Islamic Banking Department
Indonesian Financial Authority
AGENDA

I. Introduction
II. Development of Indonesia Islamic Banking
III. Indonesias position amid Islamic Global Development
IV. Challenges and Opportunities
V. Policy Direction

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I. INTRODUCTION

3
Introduction

SBY on Gerakan Ekonomi Syariah 2013

Islamic finance development should be a priority in the development of

the national economy because Indonesia has the potential to become a
world center of Islamic economics

Jokowi on Aku Cinta Keuangan Syariah Campaign 2015

Fully supports the National Campaign Aku Cinta Keuangan Syariah that
aimed to improve the collective consciousness of all stakeholders of the
economy and to understand the products and the activities of Islamic
financial in order to develop the economy and Islamic finance

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II. DEVELOPMENT OF INDONESIA ISLAMIC
BANKING

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Development of Islamic Banking

Sharia Banking Industry is still growing, but has been experienced 6

a slowdown in recent years.
Indicator 2011 2012 2013 2014 March April June
2015 2015 2015
Number of BUS 11 11 11 12 12 12 12
Number of UUS 24 24 23 22 22 22 22

Number of BPRS 155 158 163 163 162 162 162

Number of Office (BUS + 1,737 2,262 2,588 2,517 2,463 2,458 2,448
UUS)
Total Asset (Rp. Trilliun) 145.47 195.02 242.28 272.34 268.36 269.47 273.49
Aset Growth (yoy) 49% 34% 24% 12.41% 11.39% 10.35% 8.57%
Market Share 3.98% 4.58% 4.89% 4.85% 4.68% 4.69% 4.61%
Third Party Fund (Rp. Trilliun) 115.41 147.51 183.53 217,86 212.99 213.97 213.48
Financing (Rp. Trilliun) 102.66 147.51 184.12 199,30 200.71 201.53 206.06
Growths Slowdown

The Development of Islamic Banking 2008-2014

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III. INDONESIAS POSITION AMID GLOBAL
ISLAMIC FINANCE DEVELOPMENT

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Indonesias position in the Global Islamic Finance(1)

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

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 19,938
10. Bangladesh 14647

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International Recognition for Indonesia

Indonesia has gained international

recognition as:

Together with the UAE, Saudi Arabia,

Malaysia and Bahrain, Indonesia is now
considered to be in a position to offer
lessons to other countries in the world
for the development of Islamic finance.

Beside, together with Qatar / UAE /

Saudi Arabia / Malaysia / Turkey
(QISMUT), Indonesia is considered as
the driving force of Islamic finance in
the future.

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Development of Global Islamic Finance

290
Saudi Arabia
683

127
UAE
263

155
Malaysia
394
90
Kuwait
157

86
Qatar
202

58
Turkey
135

37
Indonesia
143

15
Bahrain
17

11
Pakistan
25

2014 e assets (US$b) 2019 f assets (US$b)

Source: World Islamic Banking Competitiveness

Report 2014-2015, EY and MEGA
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 But it does not competitive if we look at the asset
comparison

TOP 20 Asean Bank by Total Asset (in Top 5 Indonesian Bank 2014, (in
USD million), 2012 USD Million), rate Dec 2012
Total Asset
Bank Syariah Mega
Bank Bukopin Syariah, Indonesia 374.9 728
Indonesia
BJB Syariah, Indonesia 439.5
Asian Finance Bank, MAS 939.8 Bank BNI Syariah 2,016 Total Asset
BRI Syariah, Indonesia 1,460.7
Affin Islamic, MAS 3,696.3 Bank BRISyariah 2,104
Bank Islam, Brunei 4,425.60
Bank Muamalat, Indonesia 4,650.4 Bank Muamalat Indonesia 6,454
BSM, Indonesia 5,622.3
RANK 13
Bank Muamalat, MAS 6,643.7 Bank Syariah Mandiri 6,923
Hong Leong Islamic, MAS 7,323.5
AmIslamic, MAS 7,985.0
Bank Islam, MAS 12,513.1
CIMB Islamic, MAS 17,128.1
Alliance Islamic, MAS 17,258.6
Al Rajhi, MAS 18,547.5
Standard Chartered Saadiq, MAS 19,437.5
Kuwait Finance House, MAS 24,122.8
Maybank Islamic, MAS 30,572.2
RHB Islamic, MAS 67,912.1
Bank Albilad, MAS 78,964.5

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Source: World Bank 12
IV. CHALLENGES AND OPPORTUNITIES

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Challenges and Opportunities

Global Politic and Economic

Condition

International Commitment Financing gap and financial

and Standard deepening
Demographic
Financial Sector Integration
Bonus

Financial Literacy Rate Equitable Development

Stability
Sustainable Development

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Challenges forward

Harmonization of legal framework: conglomerated

financial regulation (synergi, leveraging and dispute
settlement)

Human Capital : Best Talented involvement,

International Standard Banking Competencies.

Banking Capacities Level: up graded Islamic banking

capacity based: business scale, capital, human
resources, technology, business orientation, high
quality customer service.

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V. POLICY DIRECTION

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Policy Direction in the Development of Indonesia Islamic Finance

to open access to finance the poor/unbanked, or

in a broader scope is to support the achievement
of financial inclusion .

Maslahat, Masyarakat
to answer the increasing demand for financial
services as a result of the rising middle income Rahmatan Indonesia
class lil alamien sejahtera

able to contribute from short term small and micro

financing to long-term financing of infrastructure
projects

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Roadmap of Indonesian Islamic Banking 2015-2019

Roadmap of Indonesian Islamic Banking Vision:

Actualizing Islamic banking that gives significant contributions to

sustainable economic growth, equitable development, financial
system stability, and has high competitiveness

7 Strategic Issues ; 7 Policy Directions; 40 Programs

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Strategic IssuesPolicy Direction
1. Misalignment in the visions
and lack of coordination
between the government and
the authorities in Islamic
banking development
2. Inadequate capital, industry
scale and sizes of individual
banks that are yet small with
low efficiency
3. (High cost of fund that causes
limited financing segment
4. Limited products and services
variations that do not yet meet
public expectation.
5. Quantity and quality of Human
Resources (HR) is not yet
adequate and information
technology (IT) is not yet
capable of supporting
products and services
development.
6. Public understanding and
awareness that are still low
7. Regulation and supervision
that are not yet optimal
1. Strengthen policy synergy
between the authority and
government and other
stakeholders
2. Strengthen capital and business
scale as well as enhance
efficiency
3. Improve funding structure by
supporting expansion of
financing segment
4. Improve service quality and
product diversity
5. Improve quantity and quality of
HR & IT as well as other
infrastructure
6. Enhancement of public literacy
and preference
7. Strengthen and harmonize
regulation and supervision
Programs
1. Optimizing the role and the
commitment of CCBs for
developing Islamic banking
services to reach a minimum
share of 10% of parent CCBs
assets.
2. Policy and implementation of
business process leveraging
3. Development of roadmap for
Islamic Business Unit spin-off
4. Promote the establishment of
State-Owned/District
Government-Owned Islamic
Banks to achieve targeted market
share growth
5. Promote additional capital
deposits by owners, Initial Public
Offerings (IPOs) as well as invite
large-scale strategic
partners/investors.
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Strategic Programs 2015-2019

1) Strengthen policy synergy between the authority and government and other stakeholders
The establishment of Islamic Finance Development National Committee and promoting the
establishment of center for Islamic banking and finance research and development

2) Improving Islamic Banking Competitiveness

a) Development program of market and products Islamic Banking
Islamic Banking (iB) Campaign Program and educate public in an innovative and integrated way:
National Campaign of Aku Cinta Keuangan Syariah (ACKS)
Product differentiation that can fulfill the needs of community (Enhancement of Islamic Bank
Working Group)
b) Improving service quality
Promoting Coopetition (Cooperation-Competition) to improve the islamic banks service quality for
the community
Cross sector cooperation; Islamic Bankings Interaction with other Islamic Financial Services,
including partnership with voluntary sector (zakat, infaq, sadaqa)
c) Improving islamic bankings business scale
The establishment of Big Islamic Bank as a bank anchor on innovation and market penetration,
including strengthen its capital.

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Strategic Programs 2015-2019

4) Improving the quality of human capital of Islamic banking industry

Development of Islamic banking curriculum standard at universities
(competency mapping, competency model, link-match program and capacity
building
Development of incentive scheme to attract the interest of foreign experts in
certain field/priority sectors in Islamic banking field
5) Improving the quality of regulation and supervisory system
Regulatory convergence consistently adjust the implementation of the
provisions to the international standards (IFSB, AOOIFI & Basel)
Integrated supervisory platform resuming the preparation of integrated
supervisory program

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 Thank you

Departemen Perbankan Syariah

2015

Link Roadmap: bit.do/rpsi2015

Strategic Programs 2015-2019
Strategic Programs 2015-2019
Strategic Programs 2015-2019
Strategic Programs 2015-2019
Strategic Programs 2015-2019
Strategic Programs 2015-2019
Strategic Programs 2015-2019