BSI Expected to Strengthen Halal Industry Ecosystem

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President Joko Widodo inaugurated PT Bank Syariah Indonesia Tbk (BSI) at the State Palace, Jakarta, Monday (01/02/2021).

JAKARTA, KOMPAS – President Joko “Jokowi” Widodo inaugurated on Monday the operation of Bank Syariah Indonesia (BSI), which was established from the merger of three state-owned sharia banks. The President asked the new bank to be inclusive while business players hoped the bank would be able to strengthen the country’s halal industry ecosystem.

BSI was the result of the merger of Bank BRI Syariah (Persero), Bank Syariah Mandiri (Persero) and Bank BNI Syariah (Persero). The newly inaugurated bank booked total assets of Rp 240 trillion (US$17.10 billion) as of the end of December 2020, becoming the country’s seventh-largest bank based on assets.

It is quite natural if Indonesia becomes one of the leading countries in the development of the Islamic economy.

In his remarks at the bank’s inauguration ceremony at the State Palace, Jakarta, the President said that the opening of BSI was a historic day for Indonesia\'s economic development. Indonesia has long been known as the world\'s most populous Muslim country and this status has become one of Indonesia\'s global identities.

"It is quite natural if Indonesia becomes one of the leading countries in the development of the Islamic economy. One of them is through the operation of BSI, " he said.

Also read: An Opportunity to Make Islamic Financial Products More Accessible

The President hoped that BSI would make a major contribution to the development of the sharia economy, which was expected to further improve the welfare of the people . So, BSI must be open and inclusive and everyone who wanted to do transaction or invest in the sharia bank should be welcomed, he said.

KOMPAS/TOTOK WIJAYANTO

Bank Syariah Indonesia tellers serve customers at the Hasanudin Branch Office, Blok M, Jakarta, Monday (1/2/2021). The bank, which is a merger of PT Bank BRI Syariah Tbk, PT Bank BNI Syariah, and PT Bank Syariah Mandiri, officially operates on Monday (1/2/2021).

BSI is also obliged to maximize the use of an online system so that it can reach people who have until now not been unable to access bank services. The new bank is also expected to attract millennials. "BSI\'s Islamic financial products and services must be competitive and meet the various needs of consumers in various segments,” President said.

Meanwhile, the chairman of the Association of Indonesian Food and Beverage Entrepreneurs, Adhi S. Lukman, said that to be able to support the growth of the domestic halal industry, BSI\'s financial services must be able to compete with conventional banks. Almost all food and beverage products produced in the country are halal products.

Also read: The Potential of Sharia Economy

"Therefore, BSI must provide a more attractive and profitable alternative financing for the food and beverage industry," he said on Monday.

According to Adhi, the portion of sharia financing in the national food and beverage industry is still quite small. In addition, in choosing a source of financing, industry players also consider several things, such as ease of access and affordable interest rates.

Also read: Vice President Pushes for Sharia Economics

"We hope that BSI will become an alternative funding for the halal industry and can provide comparative advantage in competing with conventional banks," he said.

KOMPAS/TOTOK WIJAYANTO

A customer is looking for information about Bank Syariah Indonesia at the Hasanudin Branch Office, Blok M, Jakarta, Monday (1/2/2021).

Based on data from the Financial Services Authority (OJK), Islamic financial services accounted for only 9.68 percent in the country’s financial market as of June 2020. In fact, over the past year, the growth in sharia financing reached 9.5 percent or far above the growth in national loan disbursement, which fell by 2.41 percent.

Also read: Ranking in Islamic Economy Rises, Indonesia Needs Consistency

BSI’s president director Hery Gunardi said BSI would focus its financial services on micro, small and medium enterprises (MSMEs), retail, consumer, and wholesale segments with innovative products, including global businesses, such as global sukuk. "Apart from carrying out its intermediation function and handling tax payment, BSI also has a concept that can help promote people’s economic equality through zakat, donations, alms and waqf," he said.

Ease of access

Islamic economics researcher at the Institute for Development of Economics and Finance (Indef), Fauziah Rizki Yuniarti, reminded that people\'s preference for sharia-based or conventional services was not entirely based on religious beliefs. She said that the ease of access to financial services and the advancement of the technology in providing the services was among the major factors .

“I hope the bank can also inherit the specialties of each of the merged banks ," she said.

This article was translated by Hendarsyah Tarmizi