Upload
rizky-m-faisal
View
230
Download
0
Embed Size (px)
Citation preview
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 1/25
Obstacles inthe Developing
Islamic Banking in Indonesia
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 2/25
OUTLINE
1. Overview of the Industry
2. Building Blocks of Islamic Banking Development
3. Evolution of Islamic Banking Product & Typical Product Development Life
Cycle
4. Obstacles in Product Development and Implementation
5. Lessons Learned & Ways Forward
6. Milestones the Future Islamic Banking in Indonesia in the era of OJK (FSA)
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 3/25
1. Overview of the Industry
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 4/25
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 5/25
U S D b n
U S D b n
U S D b n
U S D b n
U S D b n
75.0%65.0%55.0%45.0%
32.1% 35.0%25.0%
29.0%95.0%
85.0%
75.0%
65.0%
55.0%
40.0%
30.0%
19.6% 20.0%
10.0%
0.0%
15.0%
28.5%27.0%26.5%25.5%25.0%24.5%23.0%22.5%21.0%20.5%19.0%18.5%17.5%17.0%16.5%15.5%15.0%14.5%13.0%12.5%11.0%10.5%9.0%8.5%7.5%7.0%6.5%5.5%5.0%4.5%
2.6% 3.0%2.5%1.0%0.5%
95.0%85.0%75.0%65.0%55.0%45.0%35.0%25.0%
5.0%
125.0%
95.0%
95.0%
80.0%
70.0%
55.0%
45.0%
30.0%
16.9% 20.0%
5.0% 5.0%
115.0%105.0%
85.0%
13.0% 14.6%
500
400
300
200
100
-
2006 2007 2008 2009
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%45.0%
35.0%
25.0%
15.0%
5.0%
Total Banking Assets (USD bn) % Islamic Asset Market Share
1.7% 2.1%
300
250
200
150
100
50
-
2006 2007 2008 2009
1.5%
3.5%
9.5%11.5%13.5%
19.5%21.5%23.5%
27.5%29.5%30.0%28.0%26.0%24.0%22.0%20.0%18.0%16.0%14.0%12.0%10.0%8.0%6.0%4.0%
2.0%0.0%
Total Banking Assets (USD bn) % Islamic Asset Market Share
14.6% 16.1%
60
50
40
30
20
10
-
2006 2007 2008 2009
15.0%
100.0%
90.0%80.0%70.0%60.0%50.0%40.0%30.0%
16.9% 20.0%10.0%0.0%
Total Banking Assets (USD bn) % Islamic Asset Market Share
400
300
200
100
-
130.0%
120.0%110.0%100.0%90.0%80.0%70.0%60.0%50.0%40.0%
28.5% 30.0%20.0%10.0%0.0%
2008 2009
% Islamic Asset Market Share
400
300
200
100
-
100.0%
90.0%
85.0%75.0%
65.0%60.0%
50.0%
40.0%35.0%
25.0%
16.8% 15.0%10.0%
0.0%
2008 2009
% Islamic Asset Market Share
XX%
Market Share for Shariah Banking Keep Growing in Strategic Countries of Asia andMiddle East
Growth in Islamic
Source: Central Banks, McKinsey
UAE
TOTAL BANKING ASSETS (USD bn) AND ISLAMIC ASSET MARKET SHARE (%)
ASIAN MARKETS
MALAYSIA INDONESIA
SAUDI
BANGLADESH
OTHER MARKETS
In 2009, Asia had approximately
13% market share of Global
Islamic Assets. The growth rate
for Islamic Finance in Asia for-
10 Asian Islamic Banks feature in
Malaysia is the most advanced
market for Islamic finance.
Indonesia and Bangladesh are
also progressing quickly.
26%
15.0% 14.7%
2006 2007
Total Banking Assets (USD bn)
19%
30.1% 28.0%
2006 2007
Total Banking Assets (USD bn)
33%
1.6%
27%
13.6%
29%
12.1%
asset base, CAGR(2006-09)
Islamic Share (%)
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 6/25
IndiaHong Kong
SouthKorea
SingaporeIndonesia
Thailand
Brunei
Exchange launched
Shariah Compliant
Islamic Bank arecontinuing. Likely to be
set up in 2011
India
Bombay Stock
supervise Islamicbanking operations
New plan lists 17
strategies for adoption
Bangladesh
Bangladesh
June 2010, the central
bank moved to
introduce guideline and
monitoring system to
Carried out extensive tax
and legal reforms
First IDR sovereign
issuance in August 2008
Issued first USD Sukuk in
April 2009
New USD issue plannedin 2011
Malaysia
Indonesia
Regulator aggressively
promoting Islamic
Banking to masses
Good level of interest
from population
Brunei
First Sukuk launched in
2006
issue sovereign Sukuk
Wants to tap into growth
GCC China capitalflows
Wants to establish a
large and liquid
secondary market
MainlandChina
Countries and Their Offering
Hong Kong
Announce plans to
there has been someopposition to this in the
country
Japan - a Bill has been
submitted to parliament to
allow issuance and trading
of Islamic instruments
Japan
Japan & S. Korea
S. Korea - The regulator has
signaled intention to
promote Islamic finance
products in Korea. However
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 7/25
2. Building Block of Islamic Banking
Development
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 8/25
R e g ul a t i on &L e g a l
H um a nR e s o ur c e
C a pi t a l M a r k e t
P r o d u c t D e v
S h a r i a h
T a x
Building Blocks of Islamic Banking Development
Pre-requisites for Global Islamic BankingTrendsetter
Foundations
- Legislation: provide comprehensive and create
enabling environment for development of all
aspect supporting Islamic banking
- Grand Strategy of Islamic Banking Development:
provide strategy and direction for development of
all aspect supporting Islamic banking
development
Pillars- Regulation & legal: provide reference and clarity
for the market player
- Shariah: provide Shariah resolution that enable
development of innovative and competitive
product
- Human resources: ability to provide human
resources who are competent in both
banking/financial and Shariah aspects- Product development: ability to develop & launch
innovative and competitive products
- Tax: provide at least equal playing field for and
preferably incentive to boost certain sector of
Islamic Banking industry
- Capital Market: enable market players to raise
capital and manage liquidity
P
ILL
ARS
Global
Islamic Banking Trendsetter
Grand Strategy of Islamic Banking Development
Legislation
FOUNDATIONS
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 9/25
3. Islamic Banking Products: Evolution &
Development Life Cycle
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 10/25
P r o d u c t d e v e l o p m e n t b a s e d o n C u s t
o m e r N e e d s
Sharia Banking Was InitiallyCompliance Product
Retailbanking
Commercialbanking
Finance
PrincipalInvestment
Syndications
Structured
Treasuryhedginginstruments
Customerpull
1970s 1990s1980s
IslamicCapitalMarkets
Equity
2000s
SavingsAccount
Current
Account
WealthManagement
FundsTakaful
Structured
Products
Child Trust
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 11/25
i
Product Development Cycle for Generic Product
i
Month 1
1) Demand Identification by marketingi 2) Submission of Concept Paper to shariah
committee
Month 6
9)i Developing Marketing Collateral
10) Training for front and back end staff
Month 5
7) Development of Process Manual
8) Pre-execution end-to-end review
Months 7-10
11) Product launch
12) Post implementation review
Month 2
3) Submission of Business Case
4) Development of Risk Strategy
Months 3-4
5) Development of Legal Documents &
application
6) Development of IT specifications & UAT
ProductD evelopment
Process
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 12/25
takes place at
NSC/GSC Head, Legal, Compliance, Risk,
Process Flow for New Product Approval & Implementation
Product Roll Out
Review and approval
on the concept paperby Shariah Committee
& Shariah Department
IF
APPROVED Product developmentprocess by ProductDevelopment includingproduct program,marketing material,
customer documentation,operational proceduresetc.
Concept papersubmitted by ProductDevelopment
CONVENTIONAL
AMANAH
Same asConventional
Product
Approved /
Reviewed by
Business
Distribution
Legal Advisor
X
Audit
Risk
Compliance
Shariah
Operations
Finance
Marketing
Treasury
RMM / ALCO
Product developmentrequest submitted by
Business
IF
Product approval by APPROVEDShariah Committee,Shariah Dept and
Central Shariah Group*
Application
processing
Approvals by BoD, Business
Operations, Marketing and
review by relevant Internal Audit
Post implementation
review by ShariahCommittee and Shariah
Department
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 13/25
Product Development Cycle for Sukuk and Challenges
Preparationfor underlying
Assets / Projects
AppointLead Manager
Legal Counsel
& other adviser
Kick off
ObtainShariah Approval
and Ratings
Legal DocsOffering Memo
Submission to
Securities
Exchange
Deal Road Show
& Book Building
Settlement
& Closing
Need time for approval process
Lack of Underlying Assets /
Projects (For Corporate Sukuk)
Timelines of the bidding process
Coordination among adviser
Different Shariah Scholars opinion
Poor of Ratings result
Timelines legal docs processDifferent time calendar
Meet the right investor base
Various pricing request from investor
Proper Settlement process
Final deal execution
The whole process takes 8 12 weeks
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 14/25
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 15/25
Obstacles in Development and Implementation of Islamic
Banking Products
Product Implementation
From client perspective: Lack of clarity on tax treatment(e.g. VAT), especially for structured product anddifficulty to get clarification and/or resolution from theauthority
Require extra works to fulfil different treatment under
Indonesian accounting standard (PSAK) andInternational accounting standards (IFRS)
Less familiarity with Shariah product than of the
hence more difficult to convince andmarket shariah product
Sequence is important in Shariah principles but
sometimes the process cannot be fully automated whenit is involved third parties.
Product Development
Time spent to obtain Shariah committee approvalespecially for new Shariah structure
Lack of clarity and comprehensiveness on accounting
treatment for Shariah transaction creates uncertainty withregards to accounting treatment and accounting reportingon both bank and customer sides.
Incompatibility of Shariah principles with the prevailing
law
Unresolved issues for tax treatment on corporate Sukuk
issuances
Slow internal approval process due to unfamiliarity of
approver with Shariah concept, a typical case for shariahbusiness unit
Need to enhance the information system to cater the
need of the Shariah structure.
Lack of product structure guideline to guide productdevelopment team in developing product and to guideregulator in accessing product
Short of human resource with competence in both
product development and shariah aspect
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 16/25
5. Lessons Learned & Ways Forward
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 17/25
New USD issue planned in 2010
IndonesiaCarried out extensive tax and
legal reforms
Carried out first IDR sovereign
issuance in August 2008
Issued first USD Sukuk in April
2009
JapanBill submitted to parliament to
allow issuance and trading of Islamic instruments
JBIC considering quasi-sovereign
issuance
Hong KongAnnounce plans to issue
sovereign Sukuk
Wants to tap into growth GCC
China capital flows
KoreaThe regulator has signaled
intention to promote Islamicfinance products in Korea
A draft Sukuk Law has been
submitted to the National
Assembly for review
The Sukuk Law is expected to be
introduced in 2010
TurkeyTurkey is currently considering
legislation for corporates toSukuk issues
KazakhstanKazakhstan looking into passing
Islamic finance legislation to
enable Sukuk issuance
Benchmark Sukuk issuance
targeted for 2010
New USD issue planned in 2010
SingaporeBy introducing a new set of laws
MAS has leveled the playing field
between Islamic and conventional
finance MAS has issued SGD
denominated Sukuk in 2008
Wants to establish a large and
liquid secondary market
ThailandConsidering to issue sovereign
Sukuk in 2010 to tap into GCC
liquidity
MalaysiaTax performance to Sukuk over
bonds
Invested in largest secondary
markets and knowledge centres
Several sovereign issuances
UAEDIFX wants to emerge as the
global Sukuk centre
Extremely large issuances by
sovereign and quasi-sovereign
institutions
to allow for Sukuk issuance
Draft legislation prepared
EgyptSukuk legislation drafted and
scheduled to be drafted into law
before year end
BahrainCentral Bank makes a short term
issuance almost every month
Established one of the largest
secondary market for Sukuk
U.KSukuk legislation passed
Treasury considering rolling
programme of short-term Sukuk
bills to act as risk free benchmark
of market
FranceFrance is keen to push for the
development of Islamic finance in
France s looking into legislation
JordanMinistry examining options for
Sukuk issuance in 2010
Government Exercises to Create Enabling Environment for Sukuk Issuance
Governments around the world are creating enabling environments for corporates to issue
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 18/25
The country is planning to improve its
legal system to become an alternative
location to the UK for resolvinginternational Islamic finance disputes.
The central bank, Bank Negara Malaysia
aims to position Malaysian laws
as the law of choice for Islamicfinance.
Bank Negara Malaysia is set to
implement a new model, the
Governance Framework (SGF), due to
be operational in 2011. Source: Department of Statistics Malaysia, Ernst & Young, McKinsey
What Can We Learn from Islamic Banking Development in Malaysia?
Regulatory support has helped grow the Islamic banking market share (assets) from 7% (2000) to 20% (2009)
in Malaysia
1983 1994
Islamic Banking Act 1983 (IBA)
First Islamic bank (Bank Islam
Malaysia Bhd)
Islamic money market
established
1997
National Syariah Advisory
Council established
1995
Association of Islamic Banking
Institutions Malaysia (AIBIM)
2001
Central Bank formed two
consultative committees:
. to set best practice and
. To drive product innovation
Launch of industry-owned
research and training institute :
Islamic Banking and Finance
Institute Malaysia (IBFIM)
2002
First sovereign global
Islamic sukuk amounting
to USD 600m
2004
Tax neutrality policy for Islamic
banking and finance in the 2005
budget
2006
Malaysia International Islamic
Financial Centre (MIFC) set up
to promote Islamic financialproducts and services in
international currencies for theglobal market
2007
Allowing 100% foreign equity
ownership in Islamic financial
institutions established under
the MIFC
2011
New Shariah
Governance
Framework
established
Financial Services include a systematic addressing of barriers: legislation, liquidity, tax, incentives, licensing
More emphasis on ethical aspects of Islamic Finance
Consultative approach to developing Islamic financial sectorEstablishing Central Bank guidelines for Islamic banks and
Takaful operations
Promoting both Government and Corporate Sukuk Issuances
Incentives offered via tax concessions and granting of new
branch licenses to foreign competitors
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 19/25
F actor s B est Practices* Indonesia G ap & W ays Forward
L egislation Full set of legislation are in place to
regulate Islamic Banking, Takaful and
Islamic capital market
The legislation passed is only for
Islamic banking and partially on
Islamic capital market instrument
Legislation is the foundation for
development of Islamic banking, hence
comprehensive legislation shall be in
place to cover at least three aspects of Islamic finance namely Islamic
banking, Takaful and Islamic capital
market
G rand Strategy
of D evelopme nt
Grand strategy for development
Islamic finance is in place to set
direction for national and international
development of the industry and to
synergize and harmonize development
of Islamic finance industry pillars.Advance market like Malaysia and
UAE setting up Islamic financial center
as interface and coordinator to carry out
initiative in the development process
and to promote the industry nationally
and internationally
Grand strategy sets by central bank
is lack of detailed action plan and is
focusing on market awareness
towards Islamic banking. The
missing points are clear strategy
and comprehensive direction onhow each pillar should be
developed in order to provide
enabling environtment for
development of Shariah industry.
E.g. there are efforts on developing
pillars however is not
comprehensive and harmony with
the other pillars and the industry
need.
Prioritizing to fill in the missing points
e.g.
-‐ Regulation: More detail and directive
regulation issued by central bank
-‐ Tax: provide clarity and supportive
tax treatment towards shariahtransaction.
L egal &
R egulatory
Regulator carry out effort to harmonize
legal aspect and regulation to suit with
Shariah requirements and provide
comprehensive, clear and detail
guideline for Islamic finance industry to
operate e.g. to provide guideline on
product concept paper and product
sharia parameter to guide development
of Islamic banking product
Efforts to harmonize legal aspect
with Shariah requirements and to
develop comprehensive and clear
guideline are in place. Nevertheless,
the development pace should be
faster to keep in track with the fast
development on the industry side.
Gaps are presence especially on the
comprehensiveness and details of
guideline. Regulator and industry
should proactively work together to
quickly identify and resolve issues
related to legal and regulatory.
Lesson Learned & Ways Forward
*best practices from countries in GCC and Asia
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 20/25
F actor s B est Practices* Indonesia G ap & W ays Forward
Shariah National Shariah Council is
organized as part of regulatory body
(e.g. central bank or security
commission) to enable focus,smooth and harmonization on
process in issuing fatwa with the
development process in the industry
National Shariah Council and
regulators are separated bodies
and they set up working group to
facilitate the process of issuingfatwa.
DSN might not need to be part of the
regulatory body, however there should be
more effective mechanisme to facilitate the
process of issuing fatwa in which regulatorshould play more active role to initiate
fatwa issuance based on market
requirement and grand strategy of Islamic
banking
Product
D evelopme nt
Product development is able to
deliver innovative and marketable
product since other pillars are able
to provide supportive environment
for such development
Product development is limited to
basic product due to lack support
from the other pillars.
e.g. tax issue, accounting issue,
limited fatwa, limited regulatorguideline
Urgently to address issues on pillars related
to product development such as:
availability fatwa (e.g. tawarruq &
commodity murabahah), tax neutrality and
incentive (tax for ijarah/operational lease,lower witholding tax), more details
guideline on product development issued
by regulator (e.g. uptodate product
codification, product concept paper, and
product shariah parameter).
H uman
R esour ces
Regulator and industry
supports/sponsors development of
human resource by establishing
learning center focusing on Islamicfinance and bearing mission to
promote Islamic finance.
e.g. INCEIF
The learning center for Islamic
finance is available however there
is lack of support from regulator
and industry
Regulator and industry should hand in hand
to support and sponsor Islamic finance
learning center which are available in some
universities, e.g. LPPI, UI, IPB, Unpad,
Paramadina, Tazkia etc, to facilitate these
institution to develop human resource and
bearing mission to promote Islamic
finance.
Lesson Learned & Ways Forward
*best practices from countries in GCC and Asia
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 21/25
F actor s B est Practices* Indonesia G ap & W ays Forward
T ax Tax regulation and treatment are
adjusted to suit with and support
development of Islamic financeby providing equal playing field
with that of conventional. In
addition, some countries like
UAE and Malaysia that also have
aspiration to become the Islamic
financial hub globally provide tax
incentive to encourage
development of Islamic finance
industry.
Uncertainties on tax
regulation and treatment for
Islamic transaction are
presence. There are efforts to
resolve the tax issues,
however it has yet to cover all
tax aspects related to Islamic
finance
Tax office needs to issue a clear
guideline and regulation regarding
tax treatment for Islamic financial
transaction. In order to remove
uncertainty and provide equal
playing field with that of
conventional. In addition, incentive
from the government to boost
industry is needed.
C apital M ar k et Regulator set up comprehensive
regulation on Islamic capital
market that is not only cover
shariah instruments (e.g. sukuk,
Islamic REITS, stocks etc) but
also regulation on the operation of
the capital market.
The regulator has launched
several regulation on Islamic
Capital markets, covering
stock and debt instruments,
but especially for IDR
currency
Lack of socialization for the
regulation and required additional
regulation on, accounting standard,
tax treatment and issuer appetite to
have sharia exposure
Lesson Learned & Ways Forward
*best practices from countries in GCC and Asia
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 22/25
6. . Milestones the Future Islamic Bankingin Indonesia in the era of OJK (FSA)
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 23/25
Historical of FSAIn Other Part of The World
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 24/25
Who Are BOC (DK)?
7/31/2019 Presentasi Pengembangan Keuangan Syariah UPI Bandung
http://slidepdf.com/reader/full/presentasi-pengembangan-keuangan-syariah-upi-bandung 25/25
H.M. Iman Sastra Mihajat, Lc, PDIBF, MSc Fin, PhD.cHp: +62 853 66333340 / 0838 220 68882 / +60 17 2542253 (Malaysia)
Email: [email protected] / [email protected]