Malaysia to buy stake in Bank Muamalat

JAKARTA (JP): Malaysian Deputy Prime Minister Anwar Ibrahim promised President B.J. Habibie yesterday that Malaysia would purchase a 49 percent stake, worth US$15 million, in Indonesia's only Islamic bank, Bank Muamalat Indonesia.

The chairman of the Indonesian Ulemas Council (MUI), Hasan Basri, said the agreement was reached during a telephone conversation between the two leaders yesterday morning.

"The deal will be settled in three days," Hasan said after meeting with Habibie and the bank's president, Zainul Arifin, at Bina Graha presidential office yesterday.

Bank Muamalat, an interest-free bank, was established in 1991 by 57 social and business institutions, and 180 individuals including former president Soeharto, Habibie, Soeharto's relatives Probosutedjo and Sudwikatmono, Ginandjar Kartasasmita, and tycoon Mohammad "Bob" Hasan.

It started operating in May 1992, with an initial paid-up capital of Rp 73.05 billion (US$5.2 million).

According to Zainul, Soeharto's family and Amal Bakti Muslim Pancasila, which Soeharto chairs, controls 8.1 percent of total shares.

The bank bases its operation on profit and loss-sharing contracts and does not pay interest.

"The President has agreed to the sale of the shares because Indonesia wants to learn from the experience of Malaysia in developing banks based on Islamic laws," Hasan noted.

Hasan also acknowledged that fresh money was needed to fulfill the government's requirement for banks to have a minimum capital of Rp 250 billion ($17 million) by the end of the year.

However, Hasan added that the bank was also seeking government approval to be exempt from the minimum requirement, saying the bank was not a commercial bank.

Malaysia was selected as new partner because the country's Syariah Bank has won international recognition for its success in implementing a purely Islamic bank, said Zainul.

Zainul said the current economic crisis also had a significant effect on the Islamic bank as most of its customers were small and medium-scale entrepreneurs.

"When the real sector is weak, the profit is also small and can no longer be divided," Zainul remarked. (prb)