Indonesia Islamic Banking Association

Indonesia Megabank Advances 20% Share Outlook: Islamic Finance

Indonesia’s proposed Shariah megabank would improve industry awareness, lower costs and help the bank compete to win plantation, mining and infrastructure business. Combining the Islamic units of the government-held lenders is the most feasible of three options being considered by the State-Owned Enterprises Ministry. The other two options being considered are setting up a new state-owned Islamic lender or converting an existing government-held bank into a Shariah-compliant operation. It is possible the government could proceed with more than one of the choices. The ministry is currently in discussions with Bank Indonesia and will present a finalized proposal to the State-Owned Enterprises Ministry by the end of May. Government approval is expected by the end of the year.

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