Chairman of Indonesia’s Financial Services Authority (OJK). Mr. Mahendra Sirekarwelcomed Dr. Sami al-SuwailemExecutive Director General, Islamic Development Bank Institution (ISDBI)https://IsDBInstitute.org/), at the OJK headquarters in Jakarta, Indonesia, for discussions focused on the Islamic financial ecosystem.
The meeting, held on 24 October 2023, highlighted ISDBI’s Sukuk Development Program (SDB), which aims to enhance the role of Sukuk in supporting development in ISDB member countries. The program focuses on three main components, namely Sukuk Enhancement Fund (SEF), Sovereign Financial Institution (SFC), and Cash Waqf Linked Sukuk (CWLS).
SEF is a mechanism for risk reduction through mutual contributions among Sukuk issuers. Sukuk providers contribute to a pool from which affected members are partially compensated for the risks they bear. Therefore, the fund is not dependent on external guarantee or insurance; Area conservation is funded entirely by collective contributions from members.
A Sovereign Finance Corporation (SFC) is an entity dedicated to financing government activities using fixed income Islamic finance systems. The SFC acts as a financial intermediary between the government and the capital markets and as a reserve builder for the future financing of the government.
Cash Waqf Linked Sukuk (CWLS) is a cash waqf invested in sovereign sukuk, the proceeds of which are used to fund social projects. Umma Economic Empowerment by Waqf Manager.
During the meeting, Dr. Sami Al-Suwailem emphasized the need for Shariah-compliant instruments that positively contribute to sustainable development and job creation. Shariah compliance should enhance the instrument’s economic value rather than compromise it. Dr. Al-Suwailem reiterated the Islamic Development Bank’s commitment to support Islamic financing in member countries through joint projects.
Mr. Mahendra Chirekar welcomed the potential partnerships with ISDP in the field of innovation and economic development. He also welcomed the proposed SDP and noted that such innovative products are in line with the mandate of the recent Indonesia Omnibus Law, which mandated the OJK to establish a committee to develop innovative Islamic financial products.
Mr. Sirekar appreciated. He urged his team to explore areas of mutual interest beyond the proposed SDP to benefit from the knowledge and network the company could provide.
Distributed by APO Group on behalf of Islamic Development Banking Institution (ISDBI).
About Islamic Development Bank Institution:
Islamic Development Bank Corporation (https://IsDBInstitute.org/) is the knowledge beacon of the Islamic Development Bank Group. Guided by Islamic economic and financial principles, the IsDB Institute develops innovative knowledge-based solutions to support the sustainable economic progress of IsDB member countries and diverse Muslim communities around the world. ISDP enables economic development through pioneering research and original economic analysis, human capital development and knowledge creation, dissemination and management. The institute leads initiatives to implement Islamic financial ecosystems, ultimately helping member countries achieve their development objectives. More information is available on the IsDB Institute https://IsDBInstitute.org/.
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