Bali – The Draft Bill for the Development and Strengthening of the Financial, which also regulates the spin-off of sharia business units for conventional commercial banks will be decided or ratified into law before 2022 ends. This was conveyed by Fathan Subchi, Deputy Chairman of Commission XI of the Republic of Indonesia of House of Representatives at the 2022 Islamic Finance Summit held by Infobank Media Group and the Islamic Economic Community (MES) in Bali, Thursday, September 22, 2022.
“Regarding the spin off, until today, the concept that we have submitted to the government is 50 percent of the parent bank’s assets and there is no time limit. We are waiting for the continuation of this bill from the government. The House of Representatives committed to complete the Development and Strengthening of the Financial in December 2022. God willing, in November after the recess, we will discuss it immediately. Before December 15, 2022, in the next recess we will complete the Development and Strengthening of the Financial,” said Fathan.
He also added that on Tuesday, September 20, in the House of Representatives Plenary Session, the Development and Strengthening of the Financial Bill was ratified as a House of Representatives initiative bill. Furthermore, this bill will be submitted to the government represented by the president.
“The government will study later. Reportedly, the president will send the finance minister to coordinate with the House of Representatives and other stakeholders such as Financial Services Authority, Bank Indonesia and Deposit Insurance Agency,” added Fathan.
The bank Sharia Business Unit spin-off has become a hot topic in the banking industry. As it’s known, based on the 2008 Sharia Banking Law, banks that have Sharia Business Unit are required to separate or spin off their Sharia Business Unit into separate Sharia banks no later than 2023. However, this is a challenge for a number of Sharia Business Unit bank owners because one of them is a capital constraint.
On the other hand, a number of people also think that Sharia Business Unit, which is forced to spin off in 2023, is feared that it will experience a setback due to the small scale of the economy once it becomes a separate bank. Because, by doing so, the new bank as a result of the spin off does not necessarily have great power both in terms of capital and infrastructure.
One of them, with the background of such conditions, in the draft of the Development and Strengthening of the Financial Bill, the point regarding the UUS spin-off has been changed from the Sharia Banking Law. In the draft of the Development and Strengthening of the Financial Bill, it is stated that a spin off can be carried out if the Sharia Business Unit assets have reached 50 percent of the parent bank, without any deadline or time limit. (*) Ari Nugroho
