OJK: Spin-off of Sharia Banks the Best Way to Drive Islamic Finance

Jakarta, CNBC Indonesia - The Financial Services Authority (OJK) has stated that the obligation to spin off or separate the Sharia business units (UUS) of banks is the best way to accelerate the growth of Islamic finance.

Dian Ediana Rae, Executive Director of Banking Supervision at OJK, said the regulator has conducted extensive analyses, research, and consultations with Commission XI on the rule. He noted that the spin-off concept is final and well-considered.

“And it is the best and fastest path for us to accelerate the growth of Islamic finance shares, and Islamic finance in general,” Dian said after the press conference on the Financial Services Sector Assessment and OJK Policy Results of the February 2026 Financial Sector Review (RDKB) on Tuesday 3 March 2026.

He also spoke of the synergy between Regional Development Banks (BPD) and Shariah Banks (BPRS). He said that rather than merging, the BPR will be under the Shariah BPD and operate a model similar to conventional banking.

“So there will be a situation where the synergy between BPD and BPR occurs. For example, small-scale lending will be handled by the BPR, while larger loans will be handled by its BPD. That is the overall idea,” Dian added.

OJK requires UUS with assets comprising 50% or more of the parent’s total assets and/or assets of at least Rp50 trillion to undergo a spin-off. This obligation is set out in OJK Regulation (POJK) No.12/2023 concerning Shariah Business Units.

Previously, Anggito Abimanyu, Head of the Board of Commissioners of the Deposit Insurance Corporation (LPS), argued that forcing the spin-off of Shariah banking units should not be imposed. In his view, a forced spin-off could “shrink” the scale of Shariah banks if not accompanied by capital strengthening.

Anggito referred to a study he conducted, which suggested the spin-off policy might not necessarily make Shariah banks healthier or more competitive. A Shariah bank coerced into spin-off could end up smaller in scale and difficult to develop.

“That’s what I disagree with. My study shows the policy won’t make UUS healthy; it will shrink it unless they are merged into one,” he said at the 99th Indonesian Sharia Economy Economists’ Seminar 2026, themed “Anchoring the Islamic Economy as a New Pillar of National Economic Growth” at the Bank Mega Tower Auditorium, Jakarta, on Tuesday 24 February 2026.

On the other hand, Anggito stressed that fortifying the Islamic banking sector requires strong government involvement. He cautioned, however, that the policy should not focus solely on institutional separation but also consider capital readiness and business sustainability.

“I am thinking, for example, of BPD-BPD Shariah. If merged, the assets would exceed Rp100 trillion. The Shariah BPRs currently struggle to grow because their controlling shareholders do not want to inject capital. Moreover, obtaining approval from governors, regents, other shareholders, or the legislative council is very difficult. Therefore, the government’s role is essential,” he explained.

Nevertheless, as a member of the Financial System Stability Committee (KSSK), he does not currently have a plan to propose to other KSSK members, the Financial Services Authority (OJK) which regulates spin-offs of bank UUS.”