Indonesia’s capital market regulator is preparing a five-year road map for Islamic finance to expand the industry in Southeast Asia’s largest economy.
The plan will help boost the number of Islamic capital market products and expand the industry’s investor base, the Financial Services Authority (OJK) said in a statement.
The OJK added that it was seeking market input for the road map and would set up discussion groups with stakeholders, including the central bank, the Finance Ministry, the Indonesian Stock Exchange (IDX) and the country’s national sharia board.
It also said it was refining rules for the issuance of Islamic securities, which it expected to be completed this year. These would include details on the settlement of Islamic financial transactions, disclosure requirements for sukuk (Islamic bonds) and guidelines for sukuk trustees, Bloomberg reported.
Indonesia has 11 Islamic banks and 23 Islamic windows operated by conventional banks. Their combined Islamic banking assets grew 24 percent to Rp 242 trillion (US$20.8 billion) last year, giving the sector a 4.9 percent share of total banking assets, OJK data shows.
Last month, the OJK said it would implement risk management guidelines for Islamic insurance companies and that it was now a full member of the Malaysia-based Islamic Financial Services Board, a major standard-setting body of the industry.
The OJK took over the supervision of banks, brokerages and insurance firms from the central bank and Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) in January this year.