Wednesday, 30 September 2020 | 12:48 WIB

Indonesia Vice President Comments on SOE Sharia Bank Merger Plan

Indonesia Vice President Comments on SOE Sharia Bank Merger Plan (antara)

JAKARTA, NETRALNEWS.COM - Indonesia Vice President Ma'ruf Amin says the merger of state-owned enterprises (SOE) Islamic banks or sharia banks would not only develop Indonesia's economy and sharia finance, but would also strengthen banking conditions nationally.

"This (merger) is to strengthen, it (merger) can also play a role for domestic and foreign interests. It is better than having too many banks, but with small potentials," the Vice President said in a dialogue on "Optimizing Economic Contribution and Sharia Banking in the New Normal Era" broadcast in Jakarta, Thursday.

Ma'ruf said one the reasons for merging state-owned sharia banks was due to no sharia banks in Indonesia that are in the top 20 category in the world. Ma'ruf Amin said that three to four state-owned Islamic banks would be merged.

"We don't have any sharia banks that are among the top 20 in the world. So, three or for state-owned sharia banks would be set for the merger," he said.

With the potential for sigificant sharia financial development, Indonesia must be able to utilize these resources so that later on, state-owned sharia banks can provide financing for large projects.

"Once the shareia banks are merged,  they can spread their wings further, and serve big projects or bigger economic activities so they can quickly boost the economy," Ma'ruf said.

Meanwhile, Indonesia SOE Minister Erick Thohir said the plan to merge a number of state-owned Islamic banks would be realized in February 2021. At present, the Ministry of SOEs is still reviewing the sharia banks owned by state-owned banks that are worthy of being merged.

The merger of these sharia banks will at least push up SOE sharia banks into the eight largest banks in terms of assets, so that their financing capacity is also expected to be even greater.