The Indonesia Financial Services Authority reported that the Islamic banking sector continued to expand through March 2026, with assets rising 10.49 percent year on year to IDR 1,061.61 trillion. Financing grew 9.82 percent to IDR 716.40 trillion and third-party funds increased 11.14 percent to IDR 811.76 trillion. Intermediation strengthened, with the financing-to-deposit ratio reaching 87.65 percent, while gross and net non-performing financing remained at 2.28 percent and 0.87 percent. OJK linked the performance to implementation of its 2023 to 2027 roadmap for developing and strengthening Indonesia’s Islamic banking industry. The release also highlighted measures to deepen the sector’s structure and product offering. Three large Islamic banks now sit in Bank Groups Based on Core Capital 2 and 3, and OJK expects one new Islamic commercial bank to be formed in 2026 through a spin-off, adding to the group 2 segment. In the Islamic rural bank segment, mergers involving 21 BPR and BPR Syariah are targeted to produce nine stronger BPR Syariah. On products, OJK has issued nine Islamic banking product guidelines and Regulation No. 4 of 2026 on Islamic banking investment products. It also pointed to recommendations from the Sharia Finance Development Committee, including changes to the interest-based debt ratio used in the Sharia Securities List and a fatwa on bullion business activities. Implementation examples cited by OJK included Cash Waqf Linked Deposit at 9 Islamic commercial banks, 3 sharia business units, and 9 BPR Syariah with IDR 22.76 billion raised, and a Shariah Restricted Investment Account pilot at 1 Islamic commercial bank and 1 sharia business unit totaling IDR 1.35 trillion.
OJK2026-05-16
Indonesia Financial Services Authority reports 10.49 percent Islamic banking asset growth and outlines consolidation and new product rules
The Indonesia Financial Services Authority reported continued expansion of the Islamic banking sector through March 2026, with assets up 10.49 percent year on year to IDR 1,061.61 trillion, financing up 9.82 percent to IDR 716.40 trillion, and third-party funds up 11.14 percent to IDR 811.76 trillion. OJK highlighted sector-deepening measures, including consolidation and spin-offs in Islamic commercial and rural banks, issuance of nine Islamic product guidelines and Regulation No. 4 of 2026 on Islamic banking investment products, and implementation of new sharia-based instruments such as Cash Waqf Linked Deposits and Shariah Restricted Investment Accounts.