JAKARTA: Bank Indonesia reportedly limits maximum gold pawning transaction at IDR100 million for each customer, preventing the special financing scheme in sharia banks from becoming a speculating action.
Bank Negara Indonesia Syariah has recognized the limitation since late December 2011, said Director Imam T. Saptono.
“We do not stop serving gold pawning, although the central bank allows the maximum transaction at IDR100 million a customer,” he told Bisnis on Tuesday.
He said that the regulation would not apply retroactively, meaning that the current transaction of gold pawning above IDR100 million will continue until its due date.
“Bank Indonesia releases the policy to increase prudence and to stick on Islamic principle that gold pawning is available for those who needs cash, not for investment or speculation,” he explained.
According to him, this kind of financing is prone to misuse, because gold has fluctuating price and customers can make it as investment. Moreover, gold price posted a significant jump in January-August 2011.
“However, in August until end of the year, gold price declined. So, customers actually need to understand the big risk of making gold pawning as investment.”
Imam suggested people to choose murabahah scheme in gold investment. Murabahah is a transaction under Islamic principle, similar to simple sale and purchase. Using this scheme, customers can avoid the risk of plunging gold price, which may happen at gold pawning.
Gold price was fluctuating last year, when it was traded as high as US$1,917 per ounce on August 23. However, it touched US$1,560 per ounce at closing of 2011.
Gold price increased not more than 10% during last year, after offering a return of 30% in 2010. This year, gold is predicted to reach a new record following tension in Middle East.
Data from Bank Indonesia shows that gold pawning in sharia banking reached IDR7.5 trillion at mid of 2011. The figure jumped from IDR4.7 trillion at end of 201 and IDR1.8 trillion at end of 2009.
Responding the central bank’s policy, Ahmad Gazali, a financial advisor at Safir Senduk and Associates, suggested customers to extend pawning period to avoid loss because gold price will seem to rise.
Seeing the pattern in 2011 that did not match the past 10 years, the increase in gold price is unpredictable. Achmad suggested customers to sell gold after estimated value drops and the contract is no longer extendable. (T04/NOM)
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