ACCELERATION OF THE GROWTH OF ISLAMIC BANKING IN INDONESIA

This paper aims to show the growth of Islamic banking industry in Indonesia. In this time, fast growth of Islamic banking industry progressively is office network side as consequence of improvement of requirement of society and enthusiasm of bank to provide service. In 2008 Bank of Indonesia estimated that Islamic banking industry will enjoy high growth compared to national banking in general. This prediction was based on the finishing Law of Islamic Securities (SBSN) and Law of Islamic Bank (UUPS) and completion of Tax Law.


development of Islamic Banking in Islamic countries in turn has influenced that in
Indonesia.
The existence of Islamic banking in Indonesia is tightly related to Indonesian banking system. Islamic banking which was firstly known in 1992 along with the issuance of the Law No. 7 year 1992. This law enabled the bank to operate its business with the profit sharing system. In the same year, the first Islamic banking namely Bank Muamalat Indonesia (BMI) was established.
Islamic banking system, like other aspects of Islamic way of life, is a component to create aims of social system and Islamic economy. 2 Basically, the term "Bank Syariah" is only used in Indonesia, while in other countries such a term is called "Islamic banking". Islamic Banking is banks which operate courses of business based on Islamic principles. It is a contract rule based on Islamic law between a bank party and other party in saving fund and other work payment which is in line with sharia. 3 Slowly but sure, Islamic banking has satisfied demands of society who wish for sharia based banking which prohibits usury, speculative and non productive activity and violation of principles of justice in transaction, and which obligates the distribution of payment and investment to the ethical and legal course of business.
This paper endeavors to capture the rate of growth and the development of Islamic banking industry in Indonesia.

B. The Law Enhancement of Islamic Banking
The development of Islamic banking in Indonesia cannot be detached from the government's supports which one of which is represented in banking policies which issued by the government. The Islamic banking phenomena in Indonesia began in 1992 when the BMI was established. It is not only the first Islamic banking but also the first economic institution which implements sharia system. Moreover, the BMI becomes a monumental symbol of the awakening of Islamic economic system in Indonesia.
However, the existence of Islamic banking has not been optimally noticed in the order of national banking industry. From the law perspective, the Islamic banking is only categorized as a bank with the profit sharing system and there are no detailed argumentations of sharia law and kinds of business which are permitted. It is clearly reflected in the Law No. 7 year 1992 that Islamic banking is understood as a bank with a profit sharing system which in turn must go behind the conventional banking rules. Since then, people's demands on the banking product which in line with Islamic law cannot be fully satisfied because there is still a limitation on product variants which are commonly similar to those in conventional banking which has been "Islamized". Because of the low support of the government, the development of Islamic banking is not so progressive although at that time in other developing countries, the development of Islamic banking is so progressive.   The  The growth of Islamic banking asset increases because of the dual banking system. The same condition is also experienced by Islamic banking in Malaysia.
When the Islamic Banking Act was introduced in 1983, the first Malaysian Islamic banking began to operate. However, up to 1993, there was no significant growth. By releasing the Introduction of Windows System, Malaysian Islamic banking has grown fast.
The fast growth has been triggered by some factors. They are the increasing number of branch offices and the Islamic banking work and the profit sharing offered which are more stable toward macroeconomic fluctuations. When interests of conventional banks go down, the profit sharing margin increases. It happens because the profit sharing system is based on accorded beneficial rate (nisbah).
However, if we look further at the composition of financing in Islamic banking, it shows that in July 2008, the musyarakah financing is 17.87%, the mudharabah financing is 18.53%, the murabahah financing is 58.84%, and another financing is 4.23%. 10 This composition shows that the domination of non-profit sharing financing, especially murabahah, is still high. Whereas, the profit sharing financing pattern, besides the essence of Islamic financing, is an appropriate pattern to improve real sectors because it maintains risk sharing between investors and labors. opens opportunity to offer sharia services for conventional banking branches and therefore supports Islamic banking penetration through increment of people's acceptability in receiving sharia services. Another strategy of penetration is the adjustment of communicative strategy, advertising activity and innovative product. If these strategies are optimized, the hoped growth acceleration will come true.
By the acceleration programme, it is projected that the volume asset of Islamic banking will reach Rp. 91.6 quitillion, the DPK will reach Rp. 71.3 quintillion, and the financing will reach Rp. 68.9 quintillion. 12 The hard work to realize the market the Islamic capital market, the Islamic obligation (sukuk) or the Islamic stock can be the monetary instruments which are dealt in the exchange. 14 The instrument of Islamic obligation (sukuk) can be used as an alternative of investment. It will be an engine to move the Islamic financial economy. Therefore, it will influence the growth of investment which in turn will affect the Islamic banking development. 15 By the issuance of the Law on SBSN, the growth of Islamic monetary market will be more liquid. It makes Islamic banking possible to put its fund larger in the form of sukuk or other Islamic capital markets. The issuance of SBSN and SBIS is the instrument of investment which is required to enhance the development of Islamic banking. The development of Islamic banking will also be followed by the development of other financial sectors which is represented by the good development of Islamic capital markets and Islamic insurances. By so doing, every Islamic monetary institution, especially Islamic banking, must be able to make a business strategy in order to positively contribute to the acceleration programme of the Bank of Indonesia and be ready to face the tight competition among actors of Islamic banking.

E. The Prospect of Developing Islamic Banking
Today's Islamic banking condition has had various potencies in its product kinds, the government's supports, and a huge market segment where the majority of Indonesian people are Moslems. Now, Islamic banking is not considered as only a complement to national banking. It is because the Islamic banking works and its significant contribution to Indonesian economy in the last fifteen years. 16 However, the fast growth of Islamic banking is still cynically viewed by some groups, even by some Moslems. It can be seen from Moslems' low trust and low participation in the investment and the capital roll of Islamic banking. Now, the number of Islamic banking costumers is still 5 million people. Whereas, the number of Moslems who potent to be consumers are more than 100 million people.
As the biggest Moslem populated country, Indonesia has the biggest potential market in developing monetary and Islamic banking industry. This tendency is shown by the high growth of the Industry, moreover, it is the highest compared to other nations that has the industry. However, the high growth is still considered small once it is compared to the huge market which is available. 17 The fast growth of this industry is not followed, however, by the widespread understanding of society on the importance of Islamic banking. The high potency of costumers with the low awareness of society on Islamic banking shows the little information accepted by society. Therefore, there should be a good communication between the institutions and society in order to inform Islamic principles and products which are offered. The main obstacle which can be identified to develop Islamic banking industry is the socialization of the concept, the mechanism, the urgency, and even the existence of the industry.
Human resources are the other obstacle. The supply of human resources who understand both Islamic law (fiqh) and finance is still limited in Indonesia. It seems that Islamic banking busied by the jargon "how to Islamize our banking system" and forgets the discourse of "how to Islamize the people involved in the banking industry". Islamic banking practitioners more focus on how to develop the concept and forget the human resource dynamic.
The human resource aspect will be more important when it is connected to the matter of the conversion of conventional banking to Islamic banking. The shift of the 17 Bank Indonesia, Kodifikasi Produk Perbankan Syariah, (Jakarta: Bank Indonesia , 2007) way of thinking is therefore required. The implementation of the new system which is principally different with the dominant system is the main problem.
Since there are some differences in operational implementation between Islamic banking and conventional banking, the banking rules should be appropriated to Islamic rules so Islamic banking can effectively and efficiently operate. The rules are some aspects which organize the required instrument in order to resolve liquidity, accounting standard and audited account. The rules are so required in making Islamic banking as an element of monetary system which plays its roles well. 18 By the implementation of the Law on Islamic banking, many rules of Bank of Indonesia related to Islamic banking should be revised. The issuance of the Law and the rules of Bank of Indonesia which supported by commitment of interest holders will enhance the fast, healthy and trusted Islamic banking.

F. Concluding Remarks
The development of Islamic banking in Indonesia represents people's necessity on an alternative banking system which provides healthy financial services and fulfills Islamic principles. Its development is either in its operational quality or in kinds of products and services which are offered.
The Bank of Indonesia's policies on the widening of networks of Islamic banking services, significantly affects the increment of Islamic banking works. The development and the growth of Islamic banking in Indonesia are quantitatively fast and satisfying. However, they are less in quality. Therefore, Islamic banking should improve its services. All elements should take into their consideration that Islamic banking will significantly contribute to the national economy.
The developing of Islamic banking should not be burdened only to Bank of Indonesia and the government but also to all elements of society who should be 18 Zainul Arifin, Dasar-Dasar Manajemen Bank Syariah, (Jakarta: Alvabet, 2005), p. 122