LPS Separates Management of Islamic and Conventional Banking Funds

JAKARTA — The Deposit Insurance Corporation (LPS) has officially separated accounting records, financial reports, and fund management between conventional and Islamic banking systems. The policy is designed to strengthen transparency whilst providing assurance to customers regarding the purity of deposit guarantee funds.

Nur Budiantoro, Director of the LPS Group Communication and Institutional Relations division, explained that the separation covers all aspects, ranging from premium sources, fund management, to the use of funds for guarantee claim payments.

“This year, LPS accounting has been separated between conventional and Islamic banking. This is an LPS effort to provide trust and certainty to Islamic banking customers,” said Budiantoro during a Financial Literacy Workshop organised by the Jakarta Economics Journalists Club (KJEJ) in Cempaka Putih, Jakarta, on Saturday (14 March 2026).

LPS is responsible for guaranteeing customer deposits across all banks in Indonesia, with a maximum limit of IDR 2 billion per customer per bank. In the event of bank failure, LPS will disburse claims to eligible customers.

Through this separation policy, premiums paid by conventional banks will be allocated to the conventional portfolio. Conversely, premiums from Islamic banks are managed under Islamic principles and placed in instruments that comply with Shariah law.

“If there are guarantee claims for Islamic banks or Islamic rural banks (BPRS), customers are entitled to demand that the funds received are purely Islamic and not mixed with conventional banking funds. Therefore, claim payments to Islamic banking customers are now guaranteed to come exclusively from Islamic bank premiums,” Budiantoro stated firmly.