Indicators for Soundness Level of Assessing Sharia Banks

As a follow up to Financial Services Authority (“OJK”) Regulation No. 8/POJK.03/2014 on Health Level Assessments for Sharia Commercial Banks and Sharia Business Units (“Regulation"),[1] the OJK has issued Circular Letter No. 10/SEOJK.03/2014 (“Circular Letter”). The Circular Letter further elaborates on the 4 indicators that must be used by Sharia banks and Sharia business units (collectively “Banks”) when carrying out a self-assessment of their soundness level, namely: a) risk profile; b) good corporate governance; c) earnings; and d) capital.[2]