The Financial Services Authority (OJK) has given the green light to the Muhammadiyah Muslim organization to establish or acquire an Islamic bank in Indonesia, citing the authority’s objective of fostering the growth of a robust and competitive Islamic banking industry.
OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, said that the authority supports this initiative, provided that the shareholders have sufficient financial capacity to support the bank’s strong capital base and adhere to good governance practices.
Muhammadiyah is reportedly eyeing KB Syariah as a potential acquisition target. However, Dian noted that OJK has yet to receive an official application from Muhammadiyah for the acquisition.
“Corporate actions, such as acquisitions, are the prerogative of the controlling shareholders (PSP) and are based on business considerations agreed upon by the parties involved,” Dian said in a statement as quoted on Monday, July 15, 2024.
He emphasized that Muhammadiyah or any other potential shareholders must comply with OJK Regulation No. 16/POJK.03/2022, which governs the commitments, ownership criteria, and capital requirements for Islamic banks.
Speculation about the acquisition arose after Muhammadiyah withdrew its funds from PT Bank Syariah Indonesia (BSI) to support other Islamic banks that finance micro, small, and medium enterprises (MSMEs). This has fueled Muhammadiyah’s interest in establishing its own bank and potentially acquiring KB Bukopin Syariah.
KB Bukopin Syariah’s parent company, KB Bank, has acknowledged rumors but stated that they have not received any official information from Muhammadiyah. Vice President for Corporate Relations of KB Bank, Adi Pribadi, said that the company would disclose any official developments in accordance with regulations.
Muhammadiyah and KB Bukopin Syariah share a historical connection, as Abdul Mu’ti, a commissioner of KB Bukopin Syariah, also serves as Secretary-General of the Muhammadiyah Executive Board. Originally, KB Bukopin Syariah was established as Bank Persyarikatan Indonesia by Muhammadiyah.
