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Jakarta Post

Unresolved problems in Islamic banking

  • Ardhienus


Jakarta   /   Tue, January 8, 2019   /  12:14 pm
Unresolved problems in Islamic banking A woman walks past Bank Indonesia (BI). The central bank has has launched regulation to provide a hedging facility for Islamic banks, to mitigate potential losses due to exchange rate fluctuations. (Kontan/Muradi)

According to data from the monthly bank report, credit growth in the banking industry in the third quarter of this year has reached double digits at 12.98 percent year-on-year. The achievement of credit performance in this period was better than in the same period last year, when it only grew at 7.93 percent. 

However, the impressive credit performance of the banking industry was apparently not followed by the Islamic banks. Islamic banks’ credit (financing) only grew by 3.64 percent, the lowest compared to those of other bank groups such as state-owned banks that grew by 15.29 percent, national private banks by 10.20 percent, foreign bank branch offices by 22.13 percent, joint venture banks by 20 percent and regional banks by 8.18 percent.

Besides being low, Islamic bank financing also seems to be falling. The relatively low growth in Islamic ban...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.