Halim Alamsyah, deputy governor of the central bank, Bank Indonesia, expressed confidence that shariah banking would comprise 15 to 20 per cent of the country's banking industry in 10 years, from 4.1 per cent currently.
The country's shariah finance assets as of 2011 totalled Rp214 trillion (about US$23.8 billion), comprising 69.5 per cent syariah banking assets and 18.7 per cent sukuk (Islamic bonds).
Indonesia has 11 shariah-based commercial banks, 24 syariah bank business units and 155 syariah-compliant rural banks (Bank Perkreditan Rakyat) with total assets of Rp152.3 trillion (about US$16.6 billion).
Halim said Bank Indonesia is very serious in its efforts to expand the shariah finance system, especially syariah banking, and is confident that it could contribute greatly to economic growth, financial system stability and social well-being.
Shariah banking has a connection with the real sector and its effects can be clearly seen in economic growth, besides reducing the impact of speculative risks in the finance sector as its products are transparent and more able to withstand a financial crisis, he said.
Shariah finance also ensures fairer profit and income for certain groups like fund owners, borrowers and banks, he added.
Halim said more efforts are needed to raise shariah finance's contribution to the global financial market from the present 0.6 per cent.