TEMPO.CO, Jakarta - Chief Executive of Banking Supervision at the Financial Services Authority (OJK), Dian Ediana Rae, explained that the sharia banking industry is still relatively small and lacks competitiveness due to its unideal market structure as it is dominated by only one large sharia commercial bank.

“It is not yet competitive in the national banking industry,” Dian said in a virtual press conference on Monday, November 27, 2023.

Therefore, the OJK is encouraging sharia banks to consolidate so that the industry can have two or three large-scale banks that are more competitive.

To support the security and competitiveness aspects of sharia banking, OJK issued a regulation or POJK Number 12 of 2023 in order to strengthen sharia business units through spin-offs. In addition, OJK prepared POJK on sharia governance and a circular regarding risk management for sharia commercial banks and sharia business units.

“This is to reflect the stronger characteristics of sharia banking,” Dian added.

He also noted that sharia banking needs to offer products that emphasize its uniqueness, providing an alternative for the community and contributing to social impact and community welfare.

“This is as recommended by the Islamic Financial Services Board (IFSB) and various academic literature. Such products are called Sharia-based Products,” he said.

On this basis, the OJK launched the 2023-2027 Roadmap for the Development and Strengthening of Indonesian Sharia Banking (RP3SI), which was designed with the collaboration of various institutions as well as the sharia finance and banking industry.

MOH. KHORY ALFARIZI

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