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Jakarta Post

Will planned merger revive Indonesia’s sharia banking?

  • Arisyi Raz

    Birmingham, UK

Birmingham, UK   /   Mon, November 2 2020   /  01:00 am
Indonesia's sharia finance(OJK/Financial Service Authority)

Three state-owned sharia banks in Indonesia, PT Bank BRI Syariah Tbk, PT Bank BNI Syariah, and PT Bank Syariah Mandiri, recently signed a Conditional Merger Agreement to create a US$14.5 billion entity. The merger is expected to be completed by February 2021 and will account for just under half of Indonesia’s sharia banking industry and become the seventh-biggest bank in the country. The merger is in line with the vision of the country’s Financial Services Authority (OJK) to consolidate the country’s banking sector and to promote sharia banks. In the recent years, the OJK has been trying to reduce the number of banks in the country, such as the integration of HSBC’s Indonesian unit with Bank Ekonomi Raharja and the merger between SMBC and Bank Tabungan Pensiunan Nasional. The consolidation of the banking sector, including the merger of these sharia banks, is...