OJK's Bold Step Towards More Authentic Sharia Banking

The issuance of Financial Services Authority Regulation No. 4 of 2026 on the Implementation of Sharia Banking Investment Products marks a significant correction in the legal architecture of sharia banking in Indonesia. This regulation takes effect from 29 April 2026 and firmly positions deposit products and investment products as two distinct regimes, differing in contract characteristics, risk profiles, and management governance. Amid efforts to strengthen industry competitiveness, this step should be viewed not merely as an administrative adjustment but as a conceptual repositioning: sharia banks are being encouraged to be built on their own legal logic, rather than continuously shaped through the lens of conventional banking. From a positive law perspective, the direction of this policy stands on a clear foundation: POJK 4/2026 is a direct follow-up to Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector. The OJK itself emphasises that this regulation strengthens the previous regulatory framework concerning investment and deposit products in sharia banking, although in the public regulatory channel, POJK 26/2024 appears with the title Expansion of Banking Business Activities. Therefore, what is far more important than debating the title of the regulation is to capture the substance of its legal message: from today, sharia investment products are firmly placed differently from deposit products, both in terms of contracts, risks, and legal treatment. Thus, the norms established are not standalone but part of a broader and integrated regulatory design to organise the institutional character and products of sharia banks so that they operate more consistently with their true identity. In substance, the OJK defines sharia banking investment products as funds entrusted by customers to sharia banks based on contracts in accordance with sharia principles, with risks that are principally borne by the investor customer. These products must apply profit-sharing and risk-sharing principles that reflect the true nature of investments, with contracts such as mudarabah or other contracts aligned with sharia principles. In more grounded terms: if it is an investment, it should no longer be packaged like savings; if risks are indeed present, they should not be disguised as if everything is guaranteed safe. This is where the relevance of legal theory becomes important. From the perspective of legal certainty, this regulation clarifies the classification of norms and legal objects so that the legal relationship between the bank and the customer is no longer ambiguous. From the perspective of justice, the separation prevents the misallocation of risks, namely when customers are positioned as if they are investors but treated like depositors, or vice versa. Meanwhile, from the perspective of utility, clearer regulation will strengthen market confidence because rights, obligations, return expectations, and risk burdens are placed proportionally according to the contract. Within the sharia framework, this step is more than just terminological improvement. The basic principles of muamalah require clarity in contracts, clarity in risks, and clarity of rights to outcomes. Principles such as al-ghunmu bi al-ghurmi affirm that profit is linked to willingness to bear risk, while al-kharaj bi al-dhaman emphasises that the right to outcomes cannot be separated from responsibility for potential losses.