The Problem of Islamic Banking Development in

Indonesia

A. Introduction

Basically the goal of national development is to achieve a society that is fair

and prosperous as specified in paragraph four of the Preamble of the 1945
Constitution which states that the government of the Republic of Indonesia to protect
the whole Indonesian nation and the entire country of Indonesia, promote the general
welfare, the intellectual life of the nation, and participate in the establishment of
world order based on freedom, lasting peace and social justice. To achieve the goal of
a just and prosperous society of the various efforts undertaken by all parties, including
national banks.

Meanwhile, in mid-1997 economic and financial crisis has befallen our

country which, according to experts due to the combination of the impact of contagion
(contagion) external to the internal weakness of the economic structure, social and
political. A combination of external shocks and internal weakness has pushed the
crisis in the financial sector and the real sector which then override national banks.

Capitalist economic decline which apply the principle of free market and
socialist economy with state control in the economy centrally, is a starting point for
the development of Islamic economics. The principle in Islamic economics is fairness
or equality of rights and duties, elimination of all forms of oppression or the
corruption of the other party, and has a sociological dimension. The main pillars of
economy is the sharia Islamic banking.

B. Cause
 JAKARTA , KOMPAS.com - The development of Islamic banking business
still not growing rapidly in Indonesia . That's because there are still issues that hamper
the Islamic banking business .

Secretary General of the Association of Banks Syariah Indonesia ( Asbisindo )

Achmad K Permana explains to the present assets of Islamic banking industry still has
a market share below 4 percent compared to the overall national banks. " Actually,
there are three major issues in Islamic banking . It's that hinder the development of
Islamic finance to date, " said Achmad during the discussion "reveals the crisis of
human resources in Islamic Banking " D Consulate Resto in Jakarta , Monday (
08/13/2012 ).

First , the availability of products and standardization of Islamic banking

products . This is because during this time, many Islamic banks are not doing business
according to Islamic principles. Standardization is necessary by reason of the Islamic
banking industry has differences with conventional banks . Moreover , the products of
Islamic banks not only for Muslim customers , but also non-Muslim customers.

Secondly , the level of understanding ( awareness) Islamic bank products .

Until now , very few people who know about Islamic banking products and terms in
Islamic banking . " Only about 30 percent of the resources that are recruited to know
the terms of Islamic banking as well as his level of awareness , " he added.

In addition , the third issue of Islamic banking industry is the human resources
( HR) . The problem that occurs is the difficulty to find HR. Islamic banking
competent and qualified. " We actually take a lot of human resources for Islamic
banking and conventional banking human resource potential. Very few human
resources are taken or college graduates sharia , " he said .

According to Achmad tendency to take human resources from outside the

college sharia as human resources in Islamic banking is usually even easier given the
knowledge of Islamic banking .
In terms of career , Achmad also lure ease to compete as compared with
conventional banking career . " On average their motivation to work is looking for a
 career and income. In a career , HR is not inferior to the Islamic banking Islamic
banking , because of its minimal so it is easy to climb the career ladder . Unlike
conventional banking which is already saturated , " he explained.

Just for the record , Bank Indonesia projecting Islamic banking industry could
have a market share of 15 percent in the next 10 years ( or about 2022 ) if it could
experience a steady growth as in recent years.

Deputy Governor of Bank Indonesia ( BI ) Halim Alamsyah is currently a

member of the Financial Services Authority ( FSA ) said the Islamic banking industry
grew by an average 40.5 percent per year , in the past half-decade . The growth was
two times faster than with conventional banking so that its market share continued to
increase in recent years . However, the current market share ( by assets ) was
approximately 4 percent.

C. Conclusion

Actually there are three major issues in Islamic banking. First , the availability
of products and standardization of Islamic banking products. Secondly , the level of
understanding ( awareness) Islamic bank products. In addition , the third issue of
Islamic banking industry is the human resources ( HR) .

The challenges of development Islamic banking in Indonesia are Government

support building of Islamic banking. Regulation laws need to be passed to support
development of Islamic banking. Education need to provide more to public and
student on Islamic banking.