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The House of Representatives is currently finalizing its
sharia banking bill, which will provide a legal basis for the expansion
of Islamic banking in Indonesia.
Nursanita Nasution, a member of the special committee discussing the
bill, said Thursday that even though sharia banking services had been
available here for many years, they had never been provided with a firm
legal basis.
"Even though it might be considered a bit late in the day, legislation
on sharia banking still needs to be enacted," the Commission XI member
said.
"We expect that the deliberation process will be completed and that the
bill can be passed into law before the House goes on recess in the
middle of July," she added.
The bill was initiated by the House during a plenary session in
September 2005. The House then asked the government to assess it before
sending it to the commission stage.
Among the important changes envisaged by the bill is the establishment
of a sharia banking commission that will be responsible to handing down
rulings (fatwas) on sharia products and services.
This had been opposed by the National Sharia Council (DSN), which was
established by the Indonesian Ulema Council (MUI) to oversee the
activities of sharia banks. The MUI argued that the committee's work
would overlap with that of the council.
But the central bank as the regulator of the country's banking industry
urged the establishment of a sharia banking commission as MUI fatwas
had no basis in civil law.
"It has finally been agreed that the commission be established, with
members of the DSN sitting on the commission's supervisory board,"
Nursanita said.
Another significant change envisaged by the bill is that sharia banks
will be required to submit reports to the central bank on their
transactions.
The central bank will have the rights to evaluate all transactions
conducted by sharia banks.
Nursanita said that after the House completed its deliberation of the
sharia banking bill, it would then start deliberating the sharia bond
bill.
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