Indonesia Is Considered To Need Other Sharia Banks Apart From BSI

Illustration. (Photo: Doc. Antara)

JAKARTA - The map of the Islamic banking industry in Indonesia cannot only be controlled by one big player. Observers of the Islamic banking sector say there must be at least 3-4 large Islamic banks to protect consumers because there will be healthy competition.

Sharia Economic Observer from the University of Indonesia, Yusuf Wibisono, said that he appreciated the steps taken by the Financial Services Authority (OJK) to issue policies that require conventional banks and financial services institutions to separate Sharia Business Units (UUS). This policy, he continued, is a supplement to develop the banking and Islamic finance industries.

However, Yusuf hopes that OJK will oversee the spin-off so that a healthy sharia bank competition can be formed in Indonesia.

"Currently, the Islamic banking industry is very lame, where BSI is a very large player and the only one. Like BSI has 3-4 competitors who are commensurate to make the national banking industry healthier," explained Yusuf in Jakarta, Friday, August 11.

Yusuf continued, the case of the paralysis of PT Bank Syariah Indonesia Tbk's services that occurred recently due to hacking is a reminder to continue to oversee healthy competition in the sharia industry. According to him, OJK is expected not to allow BTN UUS to be acquired by BSI.

Yusuf hopes that OJK will approve Bank BTN's UUS for spin-offs and become a BUS and become a competitor to BSI.

"The case of the paralysis of BSI services which has caused consumers of national sharia banking to suffer enormous losses, especially the people of Aceh, must be a valuable lesson," said Yusuf.

Yusuf detailed that the inequality in the Islamic banking industry can be seen from BSI, which is the only perpetrator with assets exceeding IDR 305 trillion in 2022. On the other hand, its closest competitor, UUS CIMB Niaga, only has assets of IDR 63 trillion. Then, Bank Muamalat with IDR 61 trillion, and UUS BTN with IDR 45 trillion.

Previously, OJK Banking Supervision Chief Executive Dian Ediana Rae said that OJK wanted large Islamic banks in the same class as BSI. According to him, OJK does not want only BSI to be the only Islamic bank in Indonesia because it is not healthy.

With this goal, Dian revealed that OJK is ready to grant permission regarding Bank BTN's plan to acquire a bank in smoothing BTN's spin off UUS corporate action. The goal is that the spin-off results can carry out acquisitions or mergers so that they have a significant impact in various aspects, including institutional structures, capital, to total assets.

"As I once said, OJK really wants Islamic banks in the same class as BSI. Hopefully there can be two or three banks that will be acquired or merged in the future that size (BSI). This is also in accordance with the mandate of the P2SK Law if the spin-off can be requested as well as consolidation," explained Dian.