History of Islamic Banking in Indonesia

Islamic system had begun to develop in Indonesia and the world. This system is a system that can be believed to make economic justice. Started in 1980, the Islamic financial economic studies started in Indonesia. Dawam Rahardjo, A.M. Sefudi, and Amin Aziz are some of the names associated pioneer in the discourse and the issue of the Islamic Economy in Indonesia. MUI (Indonesian Ulema Council) as an Islamic organization in Indonesia held a seminar on Bank Interest and Usury at 18-20 August 1990.

This is the origin of the formation of Islamic system in Indonesia. Results from August 18 to 20 workshops were brought to the National Assembly (General Assembly) to V in Jakarta August 22 to 25, 1990. Bank Muamalat Indonesia is the first Islamic bank in Indonesia with an initial capital of 84 billion rupees. The establishment of Bank Muamalat Indonesia is inseparable from the support of the Indonesian Muslim Intellectuals Association support (ICMI). Bank was formed on 1 November 1991 (Muamalat Indonesia Bank). 
The crisis that hit South Asia Region in 1997 made ​​Indonesia affected. Crisis stretcher made ​​several Bank Indonesia liquidity problems. There are some banks that have in the acquisition and there are some banks that had to close his business because of the economic crisis in South East Asia Region. 
When the economic crisis of 1997, Bank Muamalat is one bank in Indonesia experienced financial ratios (NPF) reached more than 60%, and recorded a loss of Rp. 105 billion. Equity Bank Muamalat as low as less than a third of the initial deposit capital (Rp 39.3 billion). June 21, 1999 (IDB) has officially become one of the shareholders of Bank Muamalat Indonesia (Muamalat Indonesia Bank) 
To strengthen its existence, the government as policy makers spawned Act No. 7/1992 on banking introduce sharing system by adding a PP implementation. No.72/1992 on Bank Profit Sharing. The system used by the Central Bank as the highest national financial institutions are Dual Banking System. The crisis that hit Indonesia and Southeast Asia in general abolished the Act No. 7/1992 and replaced with the new rules, Act No. 10/1998 on Banking. Act No. 10/1998 that allows  conventional banks conventional to be Islamic Bank open units in Indonesia. 
Birth of Act No. 23/1999 on Bank Indonesia to clarify the duties and authority of Bank Indonesia as the responsibility for the regulation and supervision of the national banking system, including sharia. With the support of Act No. 23/1999 gave birth to the Bureau of Islamic Banking at the Bank in 2001 and then in 2004 upgraded to directorate National Banking. To reinforce the existence of Bank Indonesia in taking the responsibility for banking regulation, it gives birth to Act No. 3/2004 on the amendment of Act No. 23/1999. 
Through PBI. 4/1/PBI/2002 regulating the conversion of conventional banks into Islamic banks, conversion of conventional branches into Islamic branches, cash offices Islamic conversion into Islamic branches, sub-branches opening sharia branches opening in conventional and Islamic unit in conventional branch, sub-branches opening in the branches of conventional and Islamic sharia units opening in conventional branch. In 2007 the functions of Islamic banks eased only raise funds to be able to perform an advanced financing and can perform the functions of financing and financial services. The addition of PBI no 9/7/PBI/2007 banking added role of sharia in Indonesia. 
The highlight of the development of Islamic banking in Indonesia in 2008 with the publication of Act No. 21/2008 about Islamic Banking, Act generally has several objectives in terms of, ensure legal certainty for Islamic banking (stakeholders) and provide confidence for people to use Islamic products and services.