REPUBLIKA.CO.ID, JAKARTA -- The Government and the Financial Services Authority (OJK) will focus on amending and abolishing regulations, which hinder the development of the sharia economy.

"We will discuss the deregulation with OJK. We will assess the rules that are not appropriate," National Development Planning Minister Sofyan Djalil stated here on Wednesday.

Djalil remarked that a National Islamic Finance Committee (KNKS) will function as a coordination forum between the government, OJK, and Bank of Indonesia.

However, its formation is still awaiting the issuance of a presidential decree.

Djalil remarked that development of the sharia economy in Indonesia was driven by the private sector.

Through the KNKS, the government could develop the sharia economy in the country.

One of the proposals is the deregulation of deposit interest tax of sharia.

The minister stated that the deregulation was intended to synergize the rules of the government, central bank, and OJK to solve the problem of overlapping regulations.

In addition, the KNKS could offer incentives to the banking industry as part of the efforts to develop its sharia business.

"Islamic banking is still constrained due to the lack of capital," the minister stated.

The economic potential of sharia had yet to be optimally explored.

The minister cited the example of the Islamic banking that had only managed to obtain a market share of five percent of the total Indonesian banking market.

"Islamic banking has yet to reach its full potential as the industry is constrained by the shortage of capital," the minister pointed out.

The KNKS is also concerned about the increase of sukuk (sharia-compliant debt paper).

"Sukuk will be an important part of financing that will be absorbed by the government," the minister added.

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