JAKARTA: Yield share of IDR-denominated sharia bank deposit rose to 8% in the end of October 2011, bucking the trend of the interest rate movement in conventional bank deposits.
Bank Indonesia’s data showed the yield share of sharia-bank deposit averaged 8.05% in October 2011. In fact, the yield for sharia-principal-based deposit has been on an upward trend since August 2011, which averaged 6.28%.
Meanwhile, yield share of sharia-based savings and demand deposit weakened to 2.85% and 1.45%, from 2.93% and 1.51% respectively in the previous month.
The higher yield share of sharia-based deposit runs counter with that in the conventional banks. The interest rates of conventional deposit slumped for those with 1 and 6-month tenors, and were stagnant for those with 12-month tenor.
The interest rates of deposit with 1-month tenor declined to 6.78% from 6.84% last month. Only 3-month deposit experienced an increase, to 7.21% from IDR7.19%.
The lower interest rate of conventional deposits was influenced by Bank Indonesia’s policy of cutting the benchmark of interest rate by 25 basis points to 6.5% on October 11, 2011.
Systematically, the yield share of sharia-banks deposits different from conventional banks', as it is calculated on basis of yield and bank’s revenue from the fund management of customers.
Bambang Widjanarko, Business Director of PT Bank Negara Indonesia Syariah, viewed the higher yield share in October was due to liquidity needs of sharia banks to distribute funds to high-margin financing facility.
Separately, Muhammadiyah, the country’s second biggest Muslim organization, and its charity businesses will only utilize services of sharia banks and will stop using services in the conventional banks.
“That has been the decision from the Central Board of Muhammadiyah. The fund transition from conventional banks to sharia banks will be realized by the end of December 2012 at the latest,” Yunahar Ilyas, Chairman of PP Muhammadiyah, said.
The Committee Fund of Muhammadiyah, which manages more than 10,000 charity, will be managed by seven sharia banks by then; BRI Syariah, BSM, BNI Syariah, Bank Syariah Bukopin, Bank Muamalat, as well as unit usaha syariah (UUS) Bank Danamon and UUS Bank Tabungan Negara.
The seven banks signed an agreement with Muhammadiyah in mid-December. Previously, Muhammadiyah had cooperated with 46 financial institutions, both in sharia and conventional.
Yunahar added that Muhammadiyah has a great cash flow potentials. At present, the organization controls 172 universities, 400 hospitals, and more than 10,000 schools consisting of early childhood education to senior high school.
“In terms of the cash-flow potential, we cannot reveal it as yet because we’re still calculating it. We have finished calculation on about 30% of the assets, with funding potential of IDR2 trillion,” Yunahar explained. (t01/ags)