A seminar was held Monday at the Sultan Hotel by the Islamic Corporation for the Development of the Private Sector (ICD) in collaboration with Financial Services Authority (OJK), with the theme "The Transformation of the Islamic Finance Industry in Indonesia". The event was attended by a number of delegates from Shariah and non-Shariah financial and takaful companies. The event was officiated by Firdaus Djaelani, Board of Commissioner of Otoritas Jasa Keuangan/Executive Head of Non-Bank Financial Institution Supervisory and Nida Raza, Director of Advisory Services, on behalf of Khaled Mohamad Al-Aboodi, Chief Executive Officer and General Manager of ICD. Established in 1999, ICD is the private arm of the Islamic Development Bank (IsDB) and aims to promote the private sector by providing Islamic financing capabilities in all member countries and providing access to financing and investment opportunities to private sector projects which are specifically geared to creating employment opportunities. One of its many roles include the provision of advisory services on the setting up of Islamic windows as well as bank and non-bank conversions through its various advisory programs. ICD is backed by support from the IDB as the parent company, and possesses strong and stable credit ratings (rated AA and Aa3 but Fitch and Moody's, respectively). As a member of ICD and as a country with a Muslim-majority population, Indonesia views Islamic finance as a means to stimulate growth in key economic sectors as well as a gateway for the country to build stronger ties in trade and investment with Middle Eastern countries. President Joko Widodo's has repeatedly called for the revival of growth in Indonesia's Islamic finance industry, which is currently being hindered by fragmented regulations, a lack of progress in scrapping double taxation on sukuk in addition to a delay in creating an Islamic megabank. Positively, the growing number of bank and non-bank financial institutions which already have or have expressed interest in implementing Shariah units as part of their business models is proof that Islamic finance is gaining traction in the country. Through this seminar, ICD and OJK aimed to impart the know-how related to the implementation of Shariah standards and the conversion non-bank financial institutions which already have Shariah units to become full-fledged Shariah-compliant non-bank financial institutions. The conversion is supported by OJK Regulation on Insurance covering Shariah conversion and spin-off into a full-fledged Islamic NBFI, and Indonesia Road Map Non-Bank Financial Institution 2015-2019. "Moving forward, ICD and OJK will continue to work closely to heighten awareness and understanding of the Shariah system for bank and non-bank financial institutions, and iron out issues which may arise. To date, ICD has extensive experience in providing financial advisory and sound technical solutions to bank and non-bank financial institutions who are interested in converting to Shariah-compliant outfits. We believe that our support in addition to the clarity in government regulations will further develop the Islamic finance industry in Indonesia and subsequently attract investors from the Middle East," said Mohamad Khaled Al-Aboodi. Firdaus Djaelani, Board of Commissioner of Otoritas Jasa Keuangan/Executive Head of Non-Bank Financial Institution Supervisory stated that, "One of our responsibilities is to develop the Islamic finance industry in Indonesia, as it is still far from its potential. This seminar is a platform for us to give detailed explanations on the support and role of OJK and ICD to non-bank financial institutions to further develop its Shariah business. We hope this seminar has provided valuable insight to delegates and spark interest in the country's private sector to consider transitioning into Shariah-compliant outfits." ICD has provided financial advisory and sound technical services. Past and current projects involve the conversion of banks and non-bank financial institutions to become full-fledged Islamic institutions and/or the establishment of Islamic windows. These include the conversion of Trust Bank in Suriname, the establishment of Afriland First Bank‘s Islamic window in Cameroon, to name a few. — SG
