Bank Indonesia on Syariah Business Units

Bank Indonesia (BI) has issued Regulation No. 11/10/PBI/2009 to stipulate the minimum capital requirements for Syariah Business Units. Basically, the Regulation requires that Syariah Business Units maintain a minimum capital requirement on IDR 100 billion and all Syariah Business Units must be in compliance within two years of the enactment of this Regulation.

There are some concerns that the capital requirements contained in this Regulation are likely to prove difficult for small and medium level Syariah Business Units.

The Regulation also requires that General Syariah Banks that are established based on the spinning off a Syariah Business Unit of a General Bank must be done so with a minimum of IDR 500 billion in capital. The Regulation also requires that this be increased in phases over 10 years to a minimum of IDR 1 trillion.

The Regulation has been in force since 19 March 2009.