Rabu, 21 September 2016

Islamic Banking

Islamic Banking in Indonesia in Brief

In view of providing a wider banking services alternative to Indonesian economy, the development of Islamic banking in Indonesia is implemented under dual banking system in compliance with the Indonesian Banking Architecture (API). Islamic banking and conventional banking systems jointly and synergically support a wider public fund mobilization in the framework of fostering financing capability of national economic sectors.

The characteristic of Islamic banking operation is based on partnership and mutual benefits principle provides an alternative banking system with mutual benefits both for the public and the bank. This system will give priorities to aspects related to fairness in transaction and ethical investment by underlining the values of togetherness and partnership in production, and by avoiding any speculative activity in financial transaction. By providing various products and banking services supported by variative financial scheme,.Islamic banking will be a credible alternative that can be benefited by all of Indonesian people without exception.

In the context of macro economic management, an extensive use of various Islamic financial products and instrument will help attaching financial sector and real sector and create harmonization between the two sectors. In addition to support financial and business the widely use of islamic product and instrument will also reduce speculative transactions in thus the economy supports the stability of overall financial system. At the end, the Islamic banking will significantly contribute to the achievement of mid-long term price stability.

The enactment of Act no. 21 of 2008 issued on July 16, 2008 has provided a more adequate legal base to the development of Islamic banking in Indonesia ,and consequently will accelerate the growth of the industry. With an impressive development progress reaching an annual average asset growth of more than 65% in the last five years, it is expected that Islamic banking industry will have a more significant role in supporting national economy.

Policy of Islamic Banking Development in Indonesia.

”The Blueprint of Islamic Banking Development in Indonesia ” prepared by Bank Indonesia in 2002 provides guidance to stakeholders of Islamic banking and to set the position and vision of Bank Indonesia in developing Islamic bank in Indonesia. In the process of preparing this Blueprint, various aspects have been taken comprehensively into consideration such as the actual condition of national Islamic banking industry including related tools, development trend of Islamic banking industry within international scale as well as system development of national Islamic finance that has started to be materialized and inseparable from wider architectural landscape such as Indonesian Banking Architecture (API) and Indonesian Financial System Architecture (ASKI) including international best practices formulated by international Islamic financial institutions such as IFSB (Islamic Financial Services Board), AAOIFI and IIFM.

The development of Islamic banking was directed to provide the highest benefits to the public and to give optimal contribution to national economy. Consequently its development path is always referred to other strategic plans, such as Indonesian Banking Architecture (API), Indonesian Financial System Architecture (ASKI) as well as Medium Term National Development Plan (RPJMN) and Long-Term National Development Plan (RPJPN). Therefore, the policy in developing Islamic banking is a part and an activity supporting the achievement of a larger scale strategic planning in developmnet at national level.

”The Blueprint of of Islamic Banking in Indonesia ” defines the vision, mission and target of Islamic banking development as well as strategic initiatives with clear priorities in response to the main challenge and in reaching the target for the next ten years by achieving significant market share of Islamic banking through the advancement of the role of Islamic banking in the national, regional and international financial activities with other Islamic financial sectors.

In the condition of its integration, in the short term, the phase of Islamic banking development is more directed toward servicing the huge potential of domestic market. In other words, Indonesian Islamic banking must be able to become domestic player with an internatioal quality in services and performance.

Subsequently, the Islamic banking system envisioned by Bank Indonesia is a modern Islamic banking with open and universal characteristics and inclusive to all Indonesian people with no exception. It refers to banking system presenting applicative forms of Islamic economic concept that is wisely formulated in the current context of problems faced by Indonesia within the consciousness of the historical socio-cultural condition of this country. Only by doing that, the aspiration development of Islamic banking will always be recognized and accepted by all Indonesian people as a part of the solutions to the various problems encountered by this country.

Grand Strategy of Islamic Banking Market Development

In line with the concrete efforts in developing Islamic banking in Indonesia, Bank Indonesia has formulated a Grand Strategy of Islamic Banking Market Development, as a comprehensive strategy of market development covering strategic aspects, such as: determining the vision of 2010 as the leading Islamic banking industry in ASEAN, creating the new image of inclusive and universal Islamic banking, mapping a more accurate market segment, developing more various products, improving services as well as adopting new communication strategy of Islamic banking by positioning it as a beyond banking position. ( Islamic banking is more than just a bank).

Hence, different concrete programs have and will be performed as the implementation stage of the Grand Strategy of Islamic Banking Market Development including but not limited to the following measures:

First, assigning a new vision of Islamic banking development on phase I in 2008 to build understanding in Islamic banking as Beyond Banking by reaching an asset target of Rp 50 trillion and industrial growth of 40%, phase II in 2009 with the objective of positioning Indonesian Islamic banking as the most attractive one in ASEAN. Phase III in 2010 will have the objective of attaining Indonesian Islamic banking as a leading Islamic Bank in ASEAN.

Second, new image program of Islamic banking that includes positioning, differentiation and branding aspects. The new positioning of Islamic bank as banking that provides mutual benefits to both parties, differentiation aspect with competitive advantages with various products and schemes, transparency, competent and ethical finance, updated and user friendly information technology as well as qualified investment expert of Islamic finance. Branding aspect will be represented by ”Islamic bank, more than just a bank “( beyond banking).

Third, new mapping program which is more accurate on Islamic banking market potential that generally directs Islamic bank services as universal service or bank accessible for all kinds of people and all segments in accordance with the strategy of each Islamic bank.

Fourth, product development program directed to various products variations supported by the unique value offered (mutual benefits) and strenghthened by a wide office network and the use of easily comprehended standards of product name (example : deposit – iB, financing – iB).

Fifth, program of service quality enhancement supported by competent human resources and the supply of information technology to meet customer ’s requirement and satisfaction. This competency is also expected to be able to communicate products and services of Islamic banking to customer correctly and clearly get always complying to sharia principles; and

Sixth, a wider and more efficient socialization and educational program for public interest through various direct or indirect (printing and electronic media, online/website) communication channels with the objective of contributing comprehension on the advantages of Islamic banking products and services that can be benefited by the public.

Documentation on Sharia Banking:
  1. Codification of Islamic Banking Products
  2. Grand Strategy of Islamic Banking Market Development
  3. Investment Guide
  4. UU No.21 2008 
Source : http://www.bi.go.id/en/perbankan/syariah/Contents/Default.aspx

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