Islamic Banking Increasingly Competitive Despite 7 Per Cent Market Share

REPUBLIKA.CO.ID, JAKARTA – Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS), Anggito Abimanyu, stated that over time, Islamic banks have become increasingly competitive. According to him, Islamic banks now possess strong competitive capabilities compared to conventional banks. “I am quite confident that Islamic banks are now more competitive than conventional banks. I can prove this with research,” said Anggito while attending the 99 Indonesian Islamic Economists’ Forum 2026 at the Bank Mega Tower, Jakarta, on Tuesday (24/2/2026). He cited the development and growth of PT Bank Syariah Indonesia (BSI) as an example. He mentioned that this Islamic bank demonstrates that Islamic banks are capable of being competitive, both in terms of pricing and service. “Now, Islamic banks are competitive in terms of pricing and service. They weren’t before. Previously, BUS (Islamic Commercial Banks) were not competitive. In fact, BUS used to lose out to UUS (Islamic Business Units). UUS was more competitive because it was a subsidiary of a Conventional Commercial Bank (BUK),” he said. Anggito stated that the transformation of Islamic banks into more competitive entities is inseparable from the government’s initiatives to develop and strengthen Islamic banking in Indonesia. Although, so far, the market share of Islamic banking remains at around 7 per cent. “BSI exists because of a government initiative. BSN (Bank Syariah Nasional) also exists, as does the merger of BTN and Bank Viktoria Syariah, and that was also due to the government. BMI (Bank Muamalat Indonesia) also exists because of the government. So, indeed, if we want to expand Islamic finance, there must be a stronger role for the government,” he said.