Jakarta: President Joko Widodo (Jokowi) has officially launched Bank Syariah Indonesia (BSI), the largest sharia bank in Indonesia.
"Today is a historic day for the development of Indonesian sharia economy," said President Jokowi here on Monday.
According to the President, as the most populous Muslim majority nation in the world, Indonesia should have a competitive Islamic banking industry.
"We need to work hard to become the global and regional center of sharia economy," he stated.
The three Islamic units of state-owned bank that have agreed to merge and become Bank Syariah Indonesia are PT Bank Rakyat Indonesia (Persero) Tbk's PT Bank BRIsyariah Tbk, PT Bank Mandiri (Persero) Tbk's PT Bank Syariah Mandiri and PT Bank Negara Indonesia (Persero) Tbk's PT Bank BNI Syariah.
The three-way merger created the seventh-largest bank in the country by assets.
According to Fitch Ratings, the performance of Indonesia's Islamic banks has generally been weaker than their conventional peers, dragged down by higher funding costs, inefficient operations, weaker underwriting standards, and frequently poor knowledge of available products and services among prospective customers.
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