Pilgrim Funds Give Indonesia Banks Booster Shot: Islamic Finance

Indonesia’s plan to shift 11 trillion rupiah ($1.1 billion) of pilgrim’s savings into Shariah-compliant lenders is a booster-shot that will help narrow the gap with neighboring Malaysia.

Deposits set aside by those planning a Hajj visit to Mecca in Saudi Arabia will be shifted by the Ministry of Religious Affairs from non-Islamic banks within a year of announcing the policy, Anggito Abimanyu, director-general of Hajj and Umrah at the ministry, said in an interview yesterday. The funds are equivalent to 7.3 percent of the 150.8 trillion rupiah in savings at Islamic lenders, less than a sixth of Malaysia’s 310 billion ringgit ($102 billion), central bank data show.