IslamicFinance.de

Indonesia's Islamic banks say new rules acknowledging the lower risk of profit-sharing loans will help revive industry growth from the slowest pace on record. The Financial Services Authority (FSA) is introducing reserves ratios that will vary depending on banks’ risk profiles and setting more flexible guidelines for assessing the quality of syariah-compliant assets. While the rules will mean higher ratios for some lenders, the overall impact is positive as loans that use profit-sharing structures will be deemed less risky. Lenders have until 2016 to comply with the new capital-adequacy ratios that will range from eight to 14 per cent.