Regulatory AlertsOJK Regulation No. 4 of 2026 on the Implementation of Islamic Banking Investment Products
The Financial Services Authority (OJK) issued Regulation No. 4 of 2026 to establish a distinct regulatory framework for Islamic banking investment products, separating them from traditional deposits in alignment with the Financial Sector Development and Strengthening Act. The regulation mandates strict adherence to Sharia principles, including proportional profit-sharing and risk distribution, while requiring banks to implement robust governance, risk management, and consumer protection standards. Existing products must be adjusted to comply with these new requirements within two years, and non-compliance will result in administrative sanctions.
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