Swan.my.id - Jakarta, Indonesia’s Financial Services Authority (OJK) says efforts to build a stronger group of large Islamic banks are underway, with a goal of having five banks approach the business scale of PT Bank Syariah Indonesia Tbk (BSI).
OJK expects the target could be achieved by 2027 at the latest. Dian Ediana Rae, the authority’s Chief Executive of Banking Supervision, said the process is moving forward and could reach its goal in 2026 or 2027.
“I want to see five banks that are at least close to BSI, and that is moving in that direction. God willing, perhaps in 2026 or 2027, it may have been achieved,” Dian said. He spoke after the launch of the Roadmap for the Development and Strengthening of Indonesia’s Banking Industry (RP3I) in Bali on Friday, October 2, 2026.
OJK’s target for large Islamic banks
The plan focuses on increasing the number of Islamic banks with a scale of business approaching BSI’s. OJK has set a target of five such banks, including BSI, and says work toward that goal is already in progress.
Dian did not describe the target as limited to one route. Instead, he said banks could emerge through several arrangements, including the full conversion of a conventional bank into an Islamic bank or the separation of Islamic banking operations through a spin-off.
These options provide different ways to establish or expand Islamic banking businesses, according to the routes Dian outlined. However, the authority also highlighted the need to address the scale of banks created through spin-offs.
Small spin-off banks may face consolidation
OJK said a spin-off that results in a small Islamic bank would be required to consolidate with another bank. Dian stated that the authority would require a merger in such cases, rather than leaving the new institution to operate at a small scale.
“If a spin-off results in a small bank, we will require it to merge with another bank,” Dian said. His remarks link the process of separating Islamic banking operations with OJK’s stated aim of building banks closer in scale to BSI.
The statement did not identify which banks might convert, complete a spin-off or merge. It also did not name potential merger partners. The approach described by OJK therefore sets out possible mechanisms and a target, while leaving individual transactions unspecified.
BSI remains the scale reference
BSI is currently Indonesia’s largest Islamic bank. Its assets rose 11.64% year on year to Rp456 trillion at the end of 2025, providing the scale reference Dian cited when describing the ambition for other banks.
OJK’s goal is not simply to increase the number of institutions created through spin-offs. Dian’s comments emphasize that their business scale also matters: if a spin-off produces a small bank, the authority says it will require consolidation through a merger.
The target timeline runs through 2027, although Dian said achievement could come in 2026. For now, OJK has described conversion, spin-offs and mergers as routes connected to its effort to develop five large Islamic banks, with BSI included in that group.
