Sharia banking grows by 40% in 2005<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Despite the current economic downturn amid rising inflation, the
\ncentral bank remains optimistic that growth of sharia banking
\nwill remain robust.<\/p>\n
"Currently, growth has exceed the 2005 target of 40 percent,"
\nBank Indonesia's sharia banking director Harisman said on the
\nsidelines of the 6th International Conference on Islamic
\nEconomics and Finance on Tuesday.<\/p>\n
He added that the banking sub-sector would experience
\nsignificant growth although it would not grow as rapidly as
\nprevious years.<\/p>\n
Globally, syaria banking is growing by roughly 20 percent per
\nyear.<\/p>\n
Sharia banking has been enjoying rapid growth since the
\nIndonesian Ulema Council issued an edict in 2003 stating that
\nbank interest could be considered an illegal profit, or riba.<\/p>\n
According to the central bank's report, sharia banking grew by
\n88.6 percent last year, with total assets of Rp 14 trillion and
\ntotal financing of Rp 10.9 trillion.<\/p>\n
It contributed 1.1 percent to national banking assets.<\/p>\n
This year, the volume of sharia banking assets is expected to
\nreach Rp 24 trillion, or some 1.8 percent of the national banking
\nsector. Currently, total assets in sharia banks has reached Rp
\n18.5 trillion with total financing of Rp 14.75 trillion and
\nthird-party funds of Rp 13.36 trillion.<\/p>\n
Harisman explained the development of sharia banking faced the
\nchallenges of disadvantageous macroeconomic conditions -- a
\nweakening rupiah as well as rising interest rates.<\/p>\n
BI expects the sector to grow faster next year and has
\nprovided several incentives like lowering the required capital
\nfor setting up a new Syaria bank from Rp 3 trillion to Rp 1
\ntrillion.<\/p>\n
As of 2004, the number of sharia bank offices grew to 443
\nunits from 337 in 2003.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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