As reported, Indonesia’s Islamic banking sector has been growing 40.2 % per year over the last five years, leaving behind growth in conventional of 16.7 % yearly at the same period.
Halim Alamsyah, who is Deputy Governor of Bank Indonesia, which is the country’s central bank, formally started the second worldwide seminar on Islamic finance, on 7-8 May 2012, in Bandung. The seminar was themed “Can Islamic Finance Focus on Productive Economic Activities to Promote Growth and Financial Stability”. HE Dr. Ahmed Mohammed Ali who is the President of the Islamic Development Bank (IDB) Group, was the keynote speaker of the seminar.
The Deputy Governor forecast that Shari’ah-compliant banking could answer for 15-20 % of Indonesia’s banking industry within 10 years, from just over 4 % presently. He said: “We are assured Syariah (Shari’ah) finance will encourage economic development to a higher level and improve the stability of the financial system” at the opening of the Seminar in Bandung.
Indonesia’s Islamic finance resources were worth IDR 214 trillion ($23.2 billion), of which around 69.5 % are banking assets. Indonesia has 11 Shari’ah-compliant commercial banks, 24 Shari’ah bank trade units and 155 Shari’ah-compliant exurban banks (Bank Perkreditan Rakyat) with total resources of IDR 152.3 trillion (about US$16.5 billion).
Halim said: ”Bank Indonesia is ‘very serious’ in its activities to spread out Islamic finance, particularly banking, is assured that it could largely support economic growth, financial system strength and social well-being.” Issues discussed at the Seminar in Bandung included; raising the role of authorities in actualizing the respectability of Islamic finance towards sustainable economic development; rectifying present banking trades and designing an raised banking pattern with optimal support for the actual sector; widening financial services to larger parts of society for more balanced and sustainable economic growth; improving business values by means of Islamic finance (the chosen values and chances); and challenges and opportunities in improving Shari’ah compliant products to support fertile economic activity. Speakers and participants came from more than 11 countries covering Turkey, UAE, Saudi Arabia, Bangladesh, Hong Kong, Bahrain, Thailand, Japan, Iran, Brunei, Malaysia, Singapore and Indonesia.
The attendants include Dr. Lokman Gündüz who is a Board Member of the Central Bank of Turkey, Head of BIS Asia Pacific, Dr. Eli Remolona; Head of OREI, Asian Development Bank, Prof. Dr. Iwan Jaya Aziz; the Governor of West Java, Dr. (HC) Ahmad Heryawan; the Director General of the Indonesian Debt Management Office, Mr. Rahmat Waluyanto; CEO of the International Islamic Financial Market (IIFM), Mr. Ijlal Alvi; Dr. Milani Zivadjil from the International Monetary Fund; and finally Prof. Dr. Iraj Toutounchian from Iran, who is an expert on Islamic Economics and Finance.