Indonesia's government is hoping new Islamic finance laws will entice foreign investment in the growing sector and secure a share of the $US700 billion global Islamic finance market.
Asian countries like Malaysia, Singapore and Hong Kong have been leading the way in the fast-growing sector, but despite being home to ten percent of the world's muslim population, Indonesia has so far held back.
Dr Muhammad Syafii Antonio, from the Central Bank of Indonesia, has told Radio Australia's Connect Asia program they are working hard to change the image of Islamic banking in both government and civil society.
"The issue of Islamic bond is a strategic instrument for the national economy," he said.
"We have to see the Islamic instrument not from narrow base religious approach, but from a wider approach how to accelerate the growth and development of Indonesia."
At the moment Islamic investment only makes up around 2.3 percent of Indonesia's national bond market.
The Indonesian government is hoping that new laws will attract investment from the Middle East, and Dr Antonio says with the new changes in legislation, investment could increase to 5 percent within the next two years.
And he says whilst they are still strides away from the volume of Islamic investment seen in neighbouring Malaysia, Indonesia still has the largest number of Islamic financial institutions in the world.
"We do have three fully fledged Islamic banks, and about 25 Islamic divisions of conventional banks, and we have around 106, or 110 Islamic rural banks," he said.
"So in terms of players, Indonesia is bigger, and in terms of market Indonesia is promising, so Indonesia is too big to be ignored."
(Radio Australia)
Asian countries like Malaysia, Singapore and Hong Kong have been leading the way in the fast-growing sector, but despite being home to ten percent of the world's muslim population, Indonesia has so far held back.
Dr Muhammad Syafii Antonio, from the Central Bank of Indonesia, has told Radio Australia's Connect Asia program they are working hard to change the image of Islamic banking in both government and civil society.
"The issue of Islamic bond is a strategic instrument for the national economy," he said.
"We have to see the Islamic instrument not from narrow base religious approach, but from a wider approach how to accelerate the growth and development of Indonesia."
At the moment Islamic investment only makes up around 2.3 percent of Indonesia's national bond market.
The Indonesian government is hoping that new laws will attract investment from the Middle East, and Dr Antonio says with the new changes in legislation, investment could increase to 5 percent within the next two years.
And he says whilst they are still strides away from the volume of Islamic investment seen in neighbouring Malaysia, Indonesia still has the largest number of Islamic financial institutions in the world.
"We do have three fully fledged Islamic banks, and about 25 Islamic divisions of conventional banks, and we have around 106, or 110 Islamic rural banks," he said.
"So in terms of players, Indonesia is bigger, and in terms of market Indonesia is promising, so Indonesia is too big to be ignored."
(Radio Australia)
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