Bank Indonesia preparing sharia compliant instruments

Bank Indonesia (BI) is preparing sharia compliant deposit certificates (NCD) to strengthen the liquidity of the banking industry in the country.

“The sharia securities are an alternative mode of raising funds instead of doing so from deposits, savings or giros which no longer record a growth as high as in the past,” assistant director of the sharia economic and financial department at Bank Indonesia, Rifki Ismal, said here on Friday (Oct. 21).

Sharia compliant NCD is a money market instrument designed by combining the advantages of deposits and bonds or sharia bonds.

Besides easily accessible like deposits, the sharia compliant NDC can also be sold in the money market in the same way as bonds, he noted.

To make this instrument a reality, Bank Indonesia, which has the authority to buy and sell financial products, will coordinate with the Financial Service Authority, he observed.

Bank Indonesia is still conducting various studies covering aspects such as edict (fatwa), factoring and limitation before issuing sharia compliant NCD in 2017.

“We discussed internally the BI Regulations with other relevant authorities. We continue to communicate with the OJK (the financial service authority),” he informed.

Sharia NCD can also be directed towards expanding credit along with the rising liquidity fund.

Source: Antara News