Sharia Banks Seek Govt Support

TEMPO.CO, Jakarta – Indonesian Islamic banks are in need of government support to extend the industry's growth. Bank Permata sharia unit director Achmad Kusna Permana said sharia banks in Indonesia are having difficulties to develop, trapped in the industry's low assets value and market share of less than five percent.

The condition is quite unfortunate seeing how Indonesia's Muslims population is the biggest in the world. In contrast, Malaysia—with only 30 percent of Muslim population—already has a sharia banking market share of 23 percent.

Kusna said the government is still not pro-sharia as seen in the deposit tax of 20 percent—the same as conventional banks. He argued that sharia deposits apply the mudarabah principle a.k.a. profit sharing, which should have been imposed with the same tax as mutual funds of 10 to 15 percent.

As a result, sharia banks are forced to seek profit from interest rates, which has led to a portfolio decline of Rp5 trillion per month.

Assets value is small, Achmad said, because there are very few products available.

Nevertheless, he admitted that the government has started to make efforts to excel the industry. Finance Minister Bambang Brodjonegoro said that the government will include sharia financial industry in the national finances, formulating the best scheme for industry-government relations in terms of tax treatments.

According to the Indonesian Deposit Insurance Corporation, (LPS), the market share of sharia banks is currently 4.69%. In 2014, the industry noted performance declines stemming from a dwindling real sector as the banks' financing source.

TRI ARTINING PUTRI