BI to release regulations on gold pawn platform

BI to release regulations on gold pawn platform - – Bank Indonesia (BI) will release regulations as standard guideline for the transaction of gold pawn in Islamic Bank this week. In the previous week, BI requested Islamic banking to send proposal related to the provision of gold pawn transaction.

The Director of Directorate of Islamic Banking BI, Mulya Effendi Siregar, said, several proposals were from the industry related to the financing platform of pawn for each customer. The financing platform from the pawn transaction set by BI is about 250 million-500 million IDR.

Other provision is the financing tenor. According to Siregar, BI will set the tenor of gold pawn financing only for three months. “However, the Islamic Banking wants it for four months,” he said.

BI will also set the portion of gold pawn financing to no more than 20 percent from the total of Islamic banking financing portfolio. Meanwhile, financing to value (FTV) will not be more than 80 percent and the customer must obtain some gold to be pawned.

To fit the regulation, BI set one year for transition process. “The banks have one year transition and make the standard operation procedure (SOP) in a month,” the Head of Research, Development and Regulation of Islamic Banking BI, Tirta Segara, said.

According to Segara, the portion of financing in gold pawn in Islamic bank must be limited. “It must be limited because it is commercial financing sector,” he said. The limit will not be more than 10 percent of the total of Islamic banking financing portfolio.

BI had invited Islamic banking to discuss the regulation. The Director of Business of BRI Syariah, Ari Purwandono, said, a number of regulations would be set by BI, such as FTV limitation for 80 percent. “For budget platform, we still give proposal for increasing the percentage,” he said.

BRI Syariah proposed the financing of budget ceiling for each customer was 500 million IDR. Purwandono said the financing of gold pawn is not only in case of urgent need, but also for productive purpose.

The regulation set by BI is aimed at preventing gold pawn transaction for speculation and investment. If a bank breaches the regulation, BI will impose sanction based on the regulation No. 21/2008 on Islamic banking. The sanction is administrative to revocation of gold pawn license. Nur Aini/Satya Festiani ( republika.co.id )