OJK Prepares Regulation on Sharia Banking Investment Products

The Financial Services Authority (“ OJK ”) is currently preparing Draft Regulation of OJK (Rancangan Peraturan OJK- “ RPOJK ”) on the Organization ofSharia Banking Investment Products. Dian Ediana Rae, Chief Executive of Banking Supervision at OJK, explained that the RPOJK will clarify the distinction between “deposits” and “investments” in the fundraising activities of sharia banking.

“In this RPOJK, it is stipulated that funds originating from investor customers shall be allocated to underlying assets that meet the customers’ Risk Acceptance Criteria (RAC),” Dian told Hukumonline.

Therefore, banks offering sharia banking investment products must ensure the segregation of the management and accounting of investment funds, separate from the Third Party Fund (Dana Pihak Ketiga/DPK) pooling fund, as well as segregation of underlying assets distinct from other productive assets of the bank. Banks must have adequate internal controls, including reliable information systems, to prepare financial information related to these investment products.

“This RPOJK is consistent with the POJK which regulates the organization of bank product, including obligations related to the application of good governance and risk management, as well as policies and procedures for the organization of Sharia banking investment products,” Dian explained.