Indonesian gov't urged to seriously develop Islamic banking

Indonesian Islamic banking required real steps of the government to make it par with those in other countries, head of the Islamic banking association Riawan Amin said on Aug 13th, 2009

Indonesian Islamic banking required real steps of the government to make it par with those in other countries, head of the Islamic banking association Riawan Amin said on Aug 13th, 2009. Riawan said that Indonesian Islamic banking needs a quick real supports from the government through its policies in settling various problems that linger the banking system in developing itself. Comparing with what have already been applied by the government in the neighboring country Malaysia, Riawan said that as of now, the Indonesian government is yet to make actual moves to settle the problems. "The Malaysian government has provided tax incentives, but our government is yet to take any policy on the double tax issue that persists in national Islamic banking system," he said. According to the director of the largest Islamic bank in the country, the double tax has been the most problem complained by Islamic bank customers and investors who want to put their investments in Indonesian Islamic bank's portfolios. Due to the minimum assistance from the government, the Islamic banks in Indonesia failed to comply with the target that their assets accounted for 5 percent from total asset of banks operating in the country by 2008. According to the data issued by the Indonesian central bank, the asset of national Islamic banks stood at 47.18 trillion rupiah(about 47 billion U.S. dollars) by the end of 2008, or lower than the asset of conventional banks that reached 1,632,587 trillion rupiah (some 164.2 billion dollars) in the same period. Link: http://www.cibafi.org/NewsCenter/English/Details.aspx?Id=4594&Cat=0