Regulation No. 7/46/PBI/2005 Concerning Funds Mobilization and Financing Agreements for Banks Conducting Business Based on Sharia Principles

Indonesia

(enacted in 2005)

Regulation No. 7/46/PBI/2005 Concerning Funds Mobilization and Financing Agreements for Banks Conducting Business Based on Sharia Principles, issued by Bank Indonesia, contains several provisions to protect consumers. Demand deposits must be guaranteed. Banks must establish the profit-sharing ratio at the time an account is opened, and may not reduce the customer share without approval by the customer, and such reduction may not apply retroactively. Many terms relating to bank transactions must be agreed upon between the customer and the bank. If disputes cannot be settled by mutual consultation, then settlement may be pursued through ADR or a Sharia arbitration body.

DISCLAIMER: The attached document is an unofficial translation of Regulation No. 7/46/PBI/2005. An official translation is unavailable.