Indonesia allows banks to share Shariah investment risks for deposit savings

Indonesia is allowing banks to share Shariah investment risks with deposit accountholders to obtain potentially higher returns on savings, according to OJK Regulation Number 4 of 2026 issued by Otoritas Jasa Keuangan (OJK), or the Financial Services Authority.

As such, the strict rule on banks in Indonesia to ensure no losses are incurred for retail offerings of Shariah banking investment products was lifted from the 29^th April 2026 – emulating similar leeway already allowed in other Islamic nations like Malaysia, the UAE and Saudi Arabia.

The OJK defined Shariah banking investment products as offerings which “consistently apply profit and risk sharing principles that reflect the characteristics of real investments by using contracts such as Mudarabah”.

No such products are offered yet to Indonesia’s retail customers – who have so far access only to revenue-sharing Shariah banking investment products, where the bank assumes all the risk, with none passed to the customer.

With the new ruling, banks can now also offer the profit-sharing model – where the customer takes on a defined investment risk. This means the bank must educate and ensure the customer is aware of the associated investment risks – including prior evaluations, which could be some sort of low-, medium- or high-risk profile categories – before allowing the transactions to proceed.

Though there is a two-year moratorium on implementation, a Shariah banking expert told IFN Investor this OJK ruling has no immediate impact on retail clientele.

Such products were approved only this year and offered solely to corporate and institutional clients so far. These products are available from CIMB Niaga Syariah, Maybank Syariah and Bank Muamalat Indonesia.

In its announcement, the OJK said the move is aimed at “strengthening the foundation of the Islamic banking industry by emphasizing the separation between third-party funding products (savings, deposits and current accounts) and investment products in Islamic banking”.