Public still unaware of Syariah banks

Public still unaware of Syariah banks

The Jakarta Post, Jakarta

Despite the fact that Syariah-based banks here experienced a
remarkable 88.6 percent growth in assets in 2004, the public is
still years away from fully embracing the concept, a top banker
said on Saturday.

Speaking at a discussion held by the Bogor Agricultural
Institute on Saturday, Bank Rakyat Indonesia (BRI) president
director, Rudjito, cited an internal survey conducted in Aceh,
where Syariah-based laws are officially imposed, and where only
one of BRI's ten branches offer full Islamic banking services.

The survey revealed that although the majority of Acehnese
said that commercial banking models were against Islamic
teachings, only 11 percent of them claimed to have an adequate
understanding of Syariah banking.

He related an anecdote about a BRI employee who tried to pitch
a Syariah-based product to an Islamic preacher, only to be asked,
"How much is the interest?"

The concept of interest, as well as speculation, is strictly
forbidden under the Syariah banking concept. Therefore, Rudjito
went on, the public needs to be better informed on what Syariah
banking is.

"The number one, two and three priority is educating the
public on Syariah" said Rudjito, whose bank operates 17 Syariah
branches out of its 340 branches.

"Also, since it is open to everyone, don't focus on religion,"
he said.

With 17 Syariah branches, BRI has the largest presence --
outside of the three full-fledged Syariah banks -- among the 15
commercial banks with Syariah units.

The 15 banks offering Syariah services are a significant
increase from the eight banks in 2003.

In 2004, the business of Syariah banking experienced rapid
growth, with assets reaching Rp 14 trillion, representing about
1.14 percent of total banking assets in the country.

Over the past four years alone assets have grown 60 percent on
average. Bank Indonesia projects that by 2011, the asset share of
Syariah banks will reach between 5 percent to 9 percent of the
nation's total banking assets. (002)