The Indonesian Financial Services Authority issued new regulations to consolidate and streamline Sharia business units within conventional commercial banks.* The new regulations came into force on 12 July 2023. The new regulations cover all aspects of Sharia business units, including establishing units, licencing, capital, management, business development, and circumstances in which a bank can request the revocation of their Sharia business unit licence.

With the standardisation and regulation of Sharia business units, the Financial Services Authority intends to foster consumer confidence in Sharia finance and stimulate competition across Indonesia’s Sharia financial sector.

*Financial Services Authority Regulation of the Republic of Indonesia No. 12 of 2023 concerning Sharia Business Unit.