Indonesia's Financial Services Authority has issued Regulation No. 4 of 2026 on the administration of Islamic banking investment products, creating a dedicated framework that separates third-party fund products such as savings, time deposits and current accounts from investment products offered by Islamic banks. The regime defines Islamic banking investment products as funds entrusted by customers to an Islamic bank under sharia-compliant contracts where the investment risk is borne by the investor customer, and requires profit and risk sharing that reflects genuine investment characteristics, including through mudarabah or other contracts that do not conflict with sharia principles. The regulation sets rules on basic and additional product features, governance and risk management, internal policies and procedures, separation of management and accounting, prudential requirements, and consumer protection for investor customers. OJK links the measure to the 2023 Law on Development and Strengthening of the Financial Sector and says it strengthens provisions in OJK Regulation No. 26 of 2024 on investment and deposit products for Islamic banking. The framework has applied since 29 April 2026. Islamic banks that already had investment products before the regulation took effect must align them with the new requirements within two years of entry into force or by the end of the contract term, as applicable, while applications to obtain approval to offer Islamic banking investment products that were already in process will be handled under the new rules.

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