The Merger of Islamic Banks in Indonesia, for the People’s Interest or Certain Group?

Universitas Airlangga held a new sharia-inspired webinar for THE SHARIA program on Saturday, July 24, 2021. This webinar comes with the topic, WHAT’S BEHIND THE SHARIA BANK MERGER? NEGATIVE IMPACT OF SHARIA BANK MERGERS ON THE SHARIA MARKET. Present as speakers were Ichsanuddin Noorsy as Observer of Indonesian Economic Politics, Anis Byarwati as Member of Commission IX of the Indonesian House of Representative, Ersyam Fansuri as Practitioner of Islamic Economics, and Muhammad Nafik. H.R as UNAIR Lecturer and Host of THE SHARIA event.

            Anis believes that the penetration of the Islamic banking market in Indonesia is far behind compared to other countries. The merger of Islamic banks has not been able to overcome this problem. One of the factors is that the market share of Islamic banks before the merger was still stagnant at around 7% in recent years. The merger policy only enlarges assets but is still oriented towards commercial banks, not focusing on the people.

In addition, she believes that there is a need for policies from the government to convert conventional bank assets into Islamic bank assets. The merger process has an optimal impact on the corporation. However, the impact on the public and the wider economy, especially for SMEs, is yet to be seen.

Meanwhile, Nafik assessed that the merger of Islamic banks reduced the portion of funds for the public to a smaller size, whereas before the merger the portion was still 0.3 to 0.1 after the merger. The public is not very concerned about whether Islamic banks are merged or not, because what the public sees, in general, is only about the return on the bank.

Meanwhile, Leo stated that the merger of Islamic banks is considered something extraordinary because it can enlarge existing assets. The unification of existing Islamic banks can increase investors’ confidence in Bank Syariah Indonesia (BSI). Islamic bank mergers are still used by large corporations and small ones for SMEs. As long as BSI still prioritizes commercial banking, not investment banking, it will still benefit large corporations.