Indonesian Islamic Banks' Third-Party Funding Growing Faster than that of Conventional Banks: Finance Minister

Sri Mulyani Indrawati, Finance Minister of Indonesia, has remarked that third-party funding (DPK) in Islamic banking grew 16.54% in the second quarter of 2021 (2Q 2021), higher than the DPK funding in conventional banking.

Why it Matters?

This shows that there are real developments and dynamics that have supported the survival and improvement of Islamic banking amid the COVID-19 pandemic. Further, the Islamic banking sector’s assets grew 15.8% year-on-year during 2Q 2021. However, the market share of the Islamic banking sector stands at only 6.59%, much lower than that of conventional banking. But it is claimed that this indicates the prospects for the growth of Islamic banking to be very significant.

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