REPUBLIKA.CO.ID, JAKARTA -- Head of OJK's Sharia Banking Department Deden Firman affirmed that sharia banking consolidation has the goal of strengthening an effective, healthy, efficient, competitive Islamic banking ecosystem, and providing support capacity for the national economy.

This, explained Deden, is in accordance with the mandate of Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK), which is set out in article 68 paragraph 2.

“In the P2SK Law, it is already mandated regarding the development and strengthening of the sharia financial industry, one of them through consolidation,” Deden said during a discussion with Forwada in Jakarta, Friday (24/8/2024).

As a follow-up to the Act, Deden said that OJK has published Financial Services Authority Regulation (POJK) No. 12 of 2023, which includes, among other things, a policy on consolidation.

Deden acknowledged that the structure of the national sharia banking industry is still not balanced. Therefore, a more developed structure is needed, one of which is by introducing larger sharia banks.

Such growth can be carried out organically or inorganically, so it is hoped that sharia banking or in general sharia economy can develop ideally, more strongly and efficiently.

“Its end can support the sharia economic ecosystem, which has still enormous potential,” he said.

OJK, which is one of the members of the National Committee for Sharia Economics and Finance (KNEKS), is required to have a road map (road map) of sharia finance as a support for the development of the sharia economy for the short, medium and long term. The consolidation of sharia banking through the spin off of its sharia business unit (UUS) and mergers are part of that roadmap.

The roadmap for the development and strengthening of Indonesia's sharia banking 2024-2027 includes Strengthening the Structure and Resilience of the Banking Industry; Accelerating the Digitalization of Sharia Banking; Strengthening the Characteristics of Sharia Banking; Increasing the Contribution of the Sharia Economy to the National Economy; and Strengthening the Regulation of Authorization and Supervision of Sharia Banking.

“Referring to these six pillars, in the future we expect a sharia bank capable of reaching assets of more than IDR 100 trillion. Thus, healthy competition between sharia banks that promotes efficiency will be created. That way, the national sharia finance industry will be stronger in the face of global competition,” Deden said.