Sharia Committee to run Islamic financial architecture in Indonesia

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Jakarta—Sofyan Djalil, Minister of National Development Planning, said that the National Sharia Finance Committee (KNKS) is tasked with building the industry by implementing the Master Plan for Indonesian Islamic Financial Architecture. “The plan comprises of comprehensive strategies in developing the sharia finance industry,” Sofyan said in the ministry’s press release Tempo received on Thursday, April 7.
The comprehensive strategies, will include the formation of sharia investment banks owned by the government and privates, as well as the formation of takaful and retakaful firms owned by the state. Takaful can be defined as an Islamic insurance concept, which would make takaful companies and retakaful companies be interpreted as insurers and reinsurers that practice Islamic laws in their business concepts.
“It will also include the formation of the Islamic Financial System Safety Net,” he said. Sofyan said the government also includes the sharia capital market development plan, the increase of education on sharia economy and financial industry, and the “establishment of Jakarta as a Global Islamic Financial Centre.” The KNKS, Sofyan said, will be led by President Joko Widodo. The committee is expected to let the government plan a more proactive role in pushing for the growth of Indonesia’s sharia finance industry.
The government will work together with the Financial Services Authority (OJK) in preparing regulations that can accommodate the industry. “Rules that are considered unsuitable for or hindering the industry will be reviewed and deregulated. We might also provide incentives,” he said.—Agencies

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