BRI to try Islamic principles

BRI to try Islamic principles

JAKARTA: State Bank Rakyat Indonesia (BRI) is planning to open profit-and-loss-sharing branches based on Islamic principles in several parts of the country early next year, a report said on Thursday.

"God willing, early in 2002 we will open two of these branches in Jakarta and Serang in Banten province as pilot projects," the bank's president director, Rudjito, announced.

BRI will also open six other profit-and-loss-sharing branches in Java next year, he added.

The bank is now making preparations for the opening of the branches, which involves providing education and training courses for its personnel, he said.

"The development of such banks in Indonesia has good prospects, as Muslims comprise the majority group in the country. They have been longing for banks to operate on a profit-and-loss- sharing basis," he said.

The profit-and-loss-sharing principle is the best solution to the country's sluggish banking industry during the current crisis because it does not suffer negative spread, he said.

"However, the public's poor knowledge of the activities of such banks and the lack of regulations on them still pose an obstacle to their development," he said.--Antara