Govt mulling merger of state-owned Islamic banks to unify power, VP says

thejakartapost.com Dipublikasikan 07.15, 07/08 • The Jakarta Post
A Bank Syariah Mandiri employee stacks bills in Malang, East Java, on May 18. Bank Syariah Mandiri is among the state-owned Islamic banks that are in talks over a merger.
A Bank Syariah Mandiri employee stacks bills in Malang, East Java, on May 18. Bank Syariah Mandiri is among the state-owned Islamic banks that are in talks over a merger.

Vice President Ma'ruf Amin has said the government is mulling merging several state-owned Islamic banks – banks that offer services that are sharia-compliant – to unify their power and boost their global rating.

The state-owned Islamic banks in talks to be merged are PT Bank BRI Syariah, a subsidiary of Bank BRI, PT Bank Syariah Mandiri, a subsidiary of Bank Mandiri, and PT Bank BNI Syariah, a subsidiary of Bank BNI.

The Vice President, who previously chaired the Indonesian Ulema Council (MUI), expressed hope the merger would also boost the national economy and speed up the economic recovery amid the COVID-19 pandemic.

"[The banks] have been in talks to strengthen [Islamic banks] because we don't have a large Islamic bank that ranks in the top 20 internationally," Ma'ruf said Thursday during a discussion hosted by news publication Media Indonesia.

"We are also doing this so that we don't have too many banks with small potentials," he continued, expressing hope that a sizeable Islamic bank could also support the country's domestic and foreign interest.

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In early July, State-Owned Enterprise Minister Erick Thohir detailed plans to merge the Islamic banks by February next year to provide more options to customers seeking sharia-compliant funding. 

However, the Financial Services Authority (OJK) deputy commissioner for banking, Teguh Supangkat, said in late July that the minister had not discussed the merger in-depth with the agency.

The Vice President also said the government would improve the country's halal industry and other Islamic financial services to support the goal of making Indonesia the center of the global Islamic economy.

He noted that while Indonesia had become a reference for halal product certification, homemade halal products still trailed behind the global competition. Additionally, he said that maximizing Islamic social fund services, such as for zakatand waqf, could also uplift the national economy.

However, Ma'ruf said the country was a leader in global sukuk (sharia-compliant bonds), claiming that the country's sukuk surpassed those offered by the United Arab Emirates and Malaysia.

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