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May 2020

Asian News - Indonesia: Govt to set up National Shariah Finance Committee

Source: Asia Insurance Review | May 2016

The government will step up the planned establishment of the National Committee of Islamic Finance (Komite Nasional Keuangan Syariah or KNKS) to push for the growth of the Islamic finance industry, including takaful, said Mr Sofyan Djalil, Minister of National Development Planning. President Joko Widodo will lead the committee.
   Mr Sofyan said in a statement that the KNKS will implement the Master Plan for Indonesian Islamic Financial Architecture. “The plan comprises comprehensive strategies in developing the Shariah finance industry.”
   The comprehensive strategies will include the formation of takaful and retakaful firms owned by the state and Shariah investment banks owned by the government and the private sector. The plan includes the “establishment of Jakarta as a global Islamic financial centre”.
   KNKS will also consolidate various regulations in the Islamic finance field, promote risk management through regulatory frameworks and create a financial-sector Shariah safety net. It will promote education, product development, efficiency and consumer protection in Islamic finance.
   Mr Sofyan said that the government will work with the Financial Services Authority (OJK or Otoritas Jasa Keuangan) in preparing regulations that can accommodate the industry. He said that with KNKS, the government would have a role that is more proactive in promoting Islamic financial development as its current role in this arena is low compared to the private sector.
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