20080205 muamalat sqr report

8/9/2019 20080205 Muamalat Sqr Report

1/17

- 1 -

Bank Muamalat IndonesiaPresident Director: A. Raiwan AminSharia Committee Chairman: K.H. MA. Sahal Mahfudh February 5, 200

Sharia Quality Rating (SQR): AA

Rating Definition:AA (SQR): In IIRAs opinion, an entity/instrument rated AA (SQR)

conforms to very high level of standards of Sharia requirements inall aspects of Sharia quality analysis.

Background

PT Bank Muamalat Indonesia Tbk (BMI) is one of the three Sharia compliant banksregistered with Bank Indonesia. It offers an array of products and services to depositorsand creditors as well as financing products. It also has a Foreign Exchange Bank license.

Endorsed by the Indonesian Council of Ulemas and the Government of Indonesia, the

bank was established in 1991 and commenced operations on May 1, 1992. The banktook off with the support of the Indonesian Association of Moslem Intellectuals and agroup of Moslem entrepreneurs. The founding of BMI was associated with a widespreadsupport from the public, evidenced by an Rp 84 billion pledge for the purchase of thebanks shares on the date the Articles of Association were signed. These were followedby more pledges from communities in West Java, with the overall sum reaching a total ofRp 106 billion.

On October 27, 1994, two years from its founding, BMI received its license to operate asa Foreign Exchange Bank. This consolidated BMIs position as the first Shariacompliant bank in Indonesia with a growing array of products and services.

BMI has a total asset base of an RP 8.370 billion (US$ 837 million), which is

approximately one third of the total assets of Sharia compliant banks in Indonesia (US$2.84 billion). The total industry assets compared to total assets of commercial banksconstitutes a tiny percentage (US$ 2.84 billion / US$ 104.2 billion), but there is a hugegrowth potential given more than 222 million Muslims living in Indonesia.

By the end of 2006, the bank had 2200 employees and 209 outlets throughout thecountry, consisting of 51 branches, 8 sub branches, 89 cash offices, 43 gerai/outlets and 8Sharia service units. It had 8888 Automatic Teller Machines (ATMs) throughout thecountry, but the bank is also part of the bank ATM network, which makes the total

Analyst:

Ali Abdulaal

[email protected]

+97317211606


2/17

- 2 -

number of ATMs and Joint ATMs available for customers at around 16,000 throughout the country. Themajor Shareholders of the bank, as it stands today, are: The Islamic Development Bank (28.01%); BuobyanBank Kuwait (21.8%); Atwill Holdings Ltd. (15.32 %); IDF Foundation (2.98%); and BMF Holdings(2.98%).

In the late 90s, a financial crisis devastated most of the national economies in the Southeast Asia Region,including Indonesia. The national banking sector collapsed under the burden of corporate debt overhang,which also impacted BMI. In 1998, the banks Non-Performing

Financing ratio exceeded 60%. The bank endured a loss of Rp105 billion, which brought its equity to itslowest ever level of Rp39.3 billion, less than a third of the original paid capital. In an effort to strengthenits capital base, Bank Muamalat solicited for a potential investor, where it received a positive response bythe Islamic Development Bank (IDB) based in Saudi Arabia. In the General Annual Meeting ofShareholders of BMI, on June 21, 1999, IDB officially became one of the shareholders of BMI. Thus, theperiod between 1999 and 2002 represents a time of challenges as well as victory for the Bank. During thisperiod, BMI succeeded in reversing its financial fortunes from loss back into profitability.

In 2002, BMI embarked on a five-year business plan to further the operations and assets of the bank. Theplan emphasized many aspects; most importantly asset restructuring; an efficiency program; non-relianceon further additional capital from shareholders; adopting cost-efficiency measures; and developing amilestone in business achievements through the creation and pursuit of business opportunities in upcoming

years. With this business plan, BMI succeeded in the last three years (2004, 2005 and 2006) and was ableto significantly increase its total assets, third party funds, financing and after-tax net profit.

BMI offers a range of products and services to its customers, all of which are classified as either Productsfor the Creditor, also known as Sahibul Mal; or Products for the debtor, also known as Mudharib.Products for the Creditor offer a collection of deposit options for money owners, with different schemesand requirements customized to specific needs and size of deposit. This line includes Ummat Saving (theultimate saving option), Mudharaba Deposit and Haji Arafah Saving (saving for the purposes ofpilgrimage).On the other hand, Products for the debtor offer products in lieu of direct lending of money tothe client. This line of products includes Murabaha Credit, Istishna, Murabaha Financing, MusyarakaFinancing, and Rahn (Sharia Pawning).

The hierarchical structure of Bank Muamalat consists of a Board of Commissioners, a Sharia Supervisory

Board, a President Director and the subordinated business operation and managerial units. BMIsCommissioners are at least three members nominated from the date of the General Meeting of Shareholdersand expiring on the fifth closing Annual General Meeting of Shareholders as of the date of theirappointment, without prejudice to the rights of the General Meeting of Shareholders to dismiss themembers of the Board of Commissioners from time to time prior to the expiration of their term of office, ifthe members of the Board of Commissioners are deemed to have not conducted their duties as stipulated inthe Articles of Association and/or resolution of the General Meeting of Shareholders.

The main duties of the Board of Commissioners is to supervise the policy of the Board of Directors inmanaging the bank, provide advice, supervise the implementation of the tasks resolved in the GeneralMeeting of Shareholders, follow the development of the banks activities and, in the event deterioration isindicated, immediately report to the General Meeting of Shareholders, together with recommendations onthe remedies to be taken.

The current board consists of five members:

Drs. H. Abbas Adhar President CommissionerProf. Korkut Ozal MemberAulia Pohan MemberIskandar Zulkarnain MemberDr. Ahmed Abisourour Member


3/17

- 3 -

Similarly, all members of the Board of Directors are appointed by the General Meeting of Shareholders,with 6 members, one of whom is the President Director. The current board consists of:

A. Riawan Amin President DirectorIr. Arviyan Arifin DirectorIr. H. Andi Buchari Director

M. Hidayat DirectorDrs. U. Saefudin Noer DirectorIr. H. Herbudhi S. Tomo Director

All members of the two boards have high levels of education and possess a long experience in managerial,political, educational and institutional posts inside and outside Indonesia. A detailed profile is provided inAnnex 1 and Annex 2 respectively.

The Banks vision is To become the premier Sharia bank in Indonesia, dominant in the spiritual market,admired by the rational market. Its mission is To become a role model among Sharia financialInstitutions the world over, emphasizing on entrepreneurial spirit, managerial excellence and innovativeinvestment orientation to maximize value to shareholders.

Sharia Committee

BMI has a Sharia Supervisory Board (SSB) of four scholars. The SSB was appointed by the annualgeneral meeting of stockholders held on April 28, 2004. The Articles of Association of BMI require that theSSB is appointed by the General Assembly, and that the SSB will attend the annual meetings of the GeneralAssembly. These annual meetings will also be attended by the Board of Directors and the Board ofCommissioners.

The members of the SSB are, as of December 31, 2006, as follows:- Chairman : K.H. MA. Sahal Mahfudh- Member : K.H. Maruf Amin- Member : Prof. DR. H. Muardi Chatib

- Member : Prof. DR. H. Umar Shihab

The members of the SSB are very competent and all hold Sharia degrees. They have many and relevantyears of experience and have served (and continue to serve) in a number of Sharia Boards and advisorypositions. A detailed profile can be viewed in Annex 3.

The SSB provides guidance and supervision in the conduct of the banks business and in the developmentof products and services in compliance with Sharia principles. The SSB supervises the implementation ofSharia principles in all aspects. It advises and suggests to the Board of Directors and Commissioners onSharia in banking operations. It does not, however, interfere in the banks strategy or mission formation.

The requirements for the members of SSB are arranged and decided by the National Sharia Board ofIndonesia. The SSB has the function to supervise the business activities of the bank to remain in line with

Sharia principles. In conducting its function, the SSB is obligated to follow the National Sharia BoardFatwas.

The SSB may receive an honorarium and/or other benefits. The Chairman of SSB receives 30% of thesalary and/or other benefits received by the President Director. The other members of the SSB areremunerated 30% of the salary and/or other benefits received by the other members of the Board ofDirectors.

BMI follows a structured procedure for appointment of SSB. First, BMI proposes a request to theSecretary of the National Sharia Board of Indonesia for the appointment of a Sharia Supervisory Board.


4/17

- 4 -

The request is discussed in the meeting of Executive Board and National Sharia Board. Then a meetingwill be held between the Executive Board of the National Sharia Board and Indonesia Council of Ulama tomeasure the qualification and experience of members. The Chairmen of National Supervisory Board andthe Indonesia Council of Ulama decide on the appointments to the SSB.

Any amendment to the provisions in the article of association regarding SSB is stated in the minutes of the

meeting and/or minutes of General Extraordinary Shareholder Meeting.

During 2005 and 2006, four meetings for SSB were held in each year. BMI and the SSB agreed to holdSSB meetings at any time necessary, with a minimum of four meetings per year, and possibly every month.These meetings are usually held for up to four hours, depending on the material discussed. In general, thepoints of discussion of SSB meetings include:

a. The report on investment of end of the last month position and/or cumulative previous twomonths.

b. The request to provide opinion on Sharia principle bases on matters related to financing ofexisting products and/or products to be invented.

Invitations for the meetings are usually circulated along with attached agendas and information on the

subject of the meeting, well ahead of time. Accordingly, the minutes of the meetings are prepared in acomplete and detailed manner and signed by the Chairman and all members of SSB.

SSB of BMI does not specifically prepare annual Sharia reports. It is, however, obliged to make astatement each year end in the banks annual report. This statement will assert that the SSB has supervisedthe banks operations throughout the year and will state SSBs opinion regarding:

1. The provision of products and services (including collection and disbursement of funds)2. The guidelines on operations and products (including collection and disbursement of funds)3. The companys financial statement compilation and presentation.

The bank is also obliged by the requirements of Bank Indonesia to issue a bi-annual report regarding theapplication and execution of Sharia principles. This will be a comprehensive report that includes SSBs

opinion on the Sharia compatibility of the banks products, services and guidelines and will give anopinion on the banks overall Sharia performance. The format of the report will usually be as follows:

1. Compatibility of the banks products and services with Fatwas adopted by SSBa. Fund collectionb. Fund distributionc. Services

2. Products and services not covered by an SSB Fatwa and for which a Fatwa needs to be issued3. Guidelines of the banks operations

a. Operational guidelines of fund collectionb. Operational guidelines of fund distributionc. Operational guidelines of servicesd. Guidelines of the calculation of profit sharing distribution

4. Overall Sharia compliance opinion on the banks operational execution

These reports are submitted to Bank Indonesia, the National Sharia Board and the BMI Board of Directors.

The bank mitigates any risk of noncompliance by discussing all financed and funded products with SSBbefore their launching to ensure compliance with regulations and Sharia. This will usually ensure that thestructure of the banks products and documents will be Sharia compliant. In addition, the SSB will conducta bi-annual review of these products to ensure that these products have maintained their Sharia compliancethroughout the review period. However, this does not ensure correct application of the product on a dailybasis. This is the function of Internal Sharia Control, as will be discussed below.


5/17

- 5 -

Internal Sharia Control (ISC)

The ISC Department has been established ever since BMI started its operations. The Sharia ControlDepartment is independent and consists of two officials, namely Mr. Mohamad Hidayat and Mr. AgustiantoMA, and one assistant employee, namely Mr. Faisal Muchtar. These officials are also assisted by external

personnel, namely DR. Muhammad Anwar Ibarhim and an independent team from the National Sharia

Board that includes Mr. Ikhwan A. Basri and Mr. Gunawan Yasni. These external personnel carry outexamination on the financing documents and agreements of fund investment and financing of BMI.All ISC personnel possess a firm background in Islamic studies and Sharia banking, with an excellentreputation nationwide. They have all completed postgraduate studies majoring in Sharia banking. Adetailed profile of ISC personnel can be accessed in Annex 4.

Although there are no written rules or procedures that outline the Sharia control function, the authorities ofthe department and the means of communicating the Sharia control decisions within the institution, thereare recognized Sharia control practices applied at BMI. Sharia control is implemented by monitoringfinancing documents and agreements, inspecting the banks schemes and product application, liaising withand advising the banks operational units, preparing facilities for character building and conductingworkshops and coaching at all BMI branches.

The department produces a monthly report, sent to SSB, which examines all transactions executed by thebank during a one month period. It will state the party with whom the transaction was held, the branchwhere the transaction was handled, the Sharia scheme of the transaction (e.g. Murabaha) and will give itsopinion on whether these transactions were conducted according to Sharia requirements. Where there isdoubt on the Sharia compatibility of a transaction, the report will include a note specifying the source ofconcern.

ISC coordinates with all operational divisions in conducting its review and producing its report. Itparticular, the department attends the daily meetings of the Financing Settlement Group (FSG) where it willclosely monitor the banks financing and funding operations on a day by day basis and will give advice toFSG on Sharia requirements. These meetings are critical for both ISC and FSG because of the exchange ofinformation and the regular advice given to FSG.

In the case of a transaction error, a Resident Auditor in the branch office/unit will report the case to theInternal Audit Group (IAG). The group will then conduct investigations to the governing Fatwa stipulationand then report the case to the President Director, with a copy to SSB. Similarly, where the bank receivesincome believed to be Sharia noncompliant, the treasury will separate this income and the income will besubject to a special accounting treatment, where it will be transferred either to charity or Qardul Hassan(benevolent loans) accounts. As there is no coordination with ISC in the methods of discovery applied bythe resident auditor and the treasury department, some noncompliance events may be mistakenlyoverlooked. However, because all products and practices are discussed with SSB prior to their launching,as mentioned earlier, this probability becomes small even though not fully invalidated.

Accounting Regulations

BMIs bookkeeping and accounting are based on the Accounting standard of AAOIFI and the existingaccounting standard of Indonesia Sharia banking, namely the Standard Statement of Financial Accountingof the Indonesian Accountant Association (PSAK) No. 59. In PSAK the bookkeeping and accounting of allproducts issued by the Sharia banking has been arranged and with reference to Fatwas of National ShariaBoard.


6/17

- 6 -

Training and Human Resources

To help enrich the knowledge and enhance the skills of BMI staff, the management has established aninstitution called Muamalat Institute to specifically provide training in the form of short-term courses andlong-term programs such as The Muamalat Officer Development Program. BMI visions training

candidates for future leadership. The training subjects include Sharia Banking, service excellence,domestic operations, financial literacy, fundamentals of investment, asset and liability management, auditliteracy, power speech, performance management, problem solving decision making, human resourcesmanagement, training management, celestial management training and leadership. The duration of eachprogram extends between sixteen to twenty four sessions with one hour duration for each session.

The course outline will usually recommend who should attend the course, the course background, courseobjectives and course benefits. For example, the Islamic Banking Training course recommends bankers,students, lecturers and researchers to attend the course. The background spoke about the rapid growth ofSharia banking and Sharia denominated assets, and therefore the need for this course. The benefits are theknowledge of Sharia banking concepts and their applicability in the national and international scenes. Theduration of the course was offered to be between one and seven days, according to the requirements of theclient. Total participants in 2005 reached 1057 persons.

As another example, the Basic Financing course recommends account managers, investment managers,students and lecturers and accountants to attend the course. The background considered why financing isimportant. The objectives were to train officers/ students in both conventional and Islamic banking. Thebenefits were to have a better understanding of the field. Total participants in 2005 were 266 persons and in2006 were 68 persons.

BMI sends its employees to several external training institutes other than the Muamalat Institute, namelyIAS Associates, Lembaga Pelatihan dan Pengembangan Manajemen (LPPM)/Training and ManagementDevelopment Institution, Prasetya Mulya, DUNAMIS and Management Institute of Economics FacultyUniversity of Indonesia. On the other hand, internally executed programs will usually involve a BMIofficial and other experts and will involve members from SSB infrequently due to their busy schedule.

Zakat

BMI pays the obligated Zakat of 2.5% annually from the banks net income p.a. In addition, 2.5% isdeducted from each employees monthly income. The sum amount is paid annually by the bank.

In addition to the Zakat payment for the bank and its employees, BMI tries to assist its clients to calculateand distribute their own Zakat and provides help on distributing the Zakat to those entitled to receiving it.In doing so, BMI provides a Zakat calculation service through banking phones and through MuamalatATMs in all branches and terminals throughout the country. BMI channels the Zakat to Infaq andSadaqah institutions, namely Baitulmal Muamalat. Alternatively, the amounts may be directed directly tothose entitled and/or to Dompet Dhuafa, a reputable social institution in Indonesia.

The sum amount collected is presented in the BMI annual financial report, covered in the obligations entryas part of non-operational expenses.

Social Action

BMI takes the social aspects into account in financing and investment operations. In every financingfacility, information and warning is always given that the receiver should closely stick to the Shariaprinciples contained in the Fatwas of the National Supervisory Board and the Indonesian Council of Ulama.As an example, hotels filing for a financing facility face the pre-requisite that the hotel must have a ShariaSupervisory Board of its own. Alternatively, when a National Sharia Supervisory Board for hotels hasbeen established, the bank will accept the financing request amid approval from the board. Quite the sameprocedure is also applied for TV networks applying for a financing facility. After the category of existing


7/17

- 7 -

channels within the network is thoroughly examined, the bank will decide on the networks eligibility forfinancing. The programs presented on the channels will have to fully comply with the Sharia principlesand stay in line with educational purposes. They will have to pass the test of whether they provide anegative impact on children watching the channels. Only after passing the above requirements will the bankconsider providing the financing facility.

Modes of Financing

BMI had guidelines and policies for financing and investments since its inception. They are available inthe form of General Policy on Fund Investment and the Procedures of the Execution of BMI FundInvestment. These guidelines and policies are thorough but do not specifically address diversification offinancing from the perspective of Islamic theory. There are no provisions for the optimal level of equityparticipation and Mudharaba contracts, which is an important aspect from the point of view of Islamicmodes of financing.

There are many modes of financing available to clients, namely Mudharaba, Musyarakah, Murabahah,Ijarah, Qardh, and Kafalah/Wakalah. The amount of outstanding fund investment as of end of December of2004, 2005 and 2006 is as follows:

No. Types ofProduct

2004outstandingAmount (RP

mil)%

2005outstandingamount (RP

mil)

%2006

outstandingamount (RP

mil)

%

1. Murabahah 1.900.9 46.0 2.951.0 48.8 3.122.04 47.4

2. Mudharaba 1.606.7 38.0 2.156.1 35.6 2.289.21 34.8

3. Isthisna 212.6 5.0 205.3 3.4 184.48 2.8

4. Musyarakah 327.7 9.0 497.9 8.2 475.27 7.2

5. QardhIjarah MB

11.773.2

0.21.8

16.7226.2

0.33.7

34.44481.09

0.57.3

TotalOutstanding

4.177.8 100 6.053.3 100 6.586.53 100

Each year, the Board of Directors establishes a business plan approved by the Board of Commissioners andBank Indonesia. The business plan covers the banks plans and management policies related to fundcollection targets and fund channeling for one year.

The bank only indulges in financial transactions with non-Islamic financial institutions for the purposes offund placement or demand deposit in overseas correspondent banks.Currently, the bank has accounts with:

a) Chase Manhattan Bank (US$)b) Citibank N.A. (US$)c) Union Bank of California (US$)d) Indover Bank Amsterdam Netherlands (Euro)

e) MM. Warburg Co. (Euro)f) Tat Lee Bank Singapore (Sin. $).

In line with the banks accounting system, the income or demand deposit fee received fromconventional/foreign banks are acknowledged as the banks income, which is used for donation charitypurposes (Qardhul Hasan). The entire income of demand deposit services received at the saidconventional/foreign banks is Rp. 75.037 thousand for 2005 and Rp. 62.122 thousand for 2006, and theentire total sum was channeled to the account of the Indonesian Council of Ulama for socialwelfare/interests.


8/17

- 8 -

Approving customers is governed by both Fatwas of National Supervisory Board of The IndonesianCouncil of Ulama and Bank Indonesia regulations. Both regulations, which form the basis of transactionwith customers, are covered in the existing internal regulations of the bank.

Identity and Corporate Image

Being the first Sharia compliant bank in Indonesia provides BMI with a granted image of Islamic Identity.Both the mission and vision of the bank emphasize focus on Islamic identity and the Islamic way ofmanaging the institution. The contents of BMIs internal reports and regulations will usually includereferences to Quranic verses, Hadith and Islamic conduct. This can also be observed in its marketingactivities and the products the bank offers to its clients.

Other Considerations

BMI provides a prayer room in every branch with Azan calling everyone for prayers. Although the bankhas not yet built separate branches for ladies, nor are there gender separations at work, all work isconducted according to Islamic Ethics and the bank does not employ non-Muslims as part of its team. Thebank follows a strict code of conduct according to Islamic law and spirit. Non-Islamic behavior will not be

tolerated and may result in the employee(s) facing expulsion.

The bank sees itself as An Islamic Institution Doing Banking rather than A Bank Selling IslamicProducts and Services. For example, all members of the Board of Directors forgo using luxury cars (e.g.Mercedes Benz) and use ordinary cars in solidarity with their employees. On two occasions during theweek, everyone will be obliged to wearing a unified dress code, including all the directors, as a gesture ofequality stipulated by Islam. And as a symbol of their Islamic character, the entrance to the banks brancheswill have a stop sign with the words No Riba written on them.

For a thorough Sharia Quality analysis, you can rely on Islamic International Rating Agencys (IIRA) Sharia Quality Rating Service. For more

information call: +973 17 211 606 or visit our website: www.iirating.com

Copyright 2007All of the information contained herein is obtained by IIRA from sources believed to be accurate and reliable. IIRA does not audit or verify the truth oraccuracy of any such information. As a result, the information in this report is provided as is without any representation or warranty of any kind.IIRAs rating is an opinion and not a warranty of a rated entitys current or future ability to meet contractual obligations, nor it is a recommendation tobuy, sell or hold any security. A Sharia Quality Rating does not aim at giving a Sharia opinion on Islamic financial products or to comment on thedecisions of the Sharia committees of banks and financial institutions or to correct their Fatwas (opinion).

Reproduction or distribution of Sharia Quality Service without the explicit consent of IIRA is strictly prohibited.To reprint, translate, or quote IIRAs publications, contact: IIRA, Al-Zamil Tower, 7th Floor, Govt. Avenue, Manama, Kingdom of Bahrain; Tel: +973 17211 606 Fax: +973 17 211 605


9/17

- 9 -

List of Annexes

Annex 1 Board of Commissioners

Annex 2 Board of Directors

Annex 3 Sharia Supervisory Board

Annex 4 Internal Sharia Control


10/17

- 10 -

Annex 1: Board of Commissioners

No. Name Background and Major Achievements

1Drs. H. AbbasAdhar

Drs. Adhar was born in Sukabumi in 1935. He completedstudies at the International Banking School in Prague,Czechoslovakia, in 1965. He then attended studies inIndustrial Banking Technique held by UNIDO in Vienna,

Austria and completed studies in 1972. In 1976, he fulfilledthe Industrial Project Course held by EDI / World BankIBRD in Washington DC, USA. He is currently the ViceGeneral Chairman of Indonesian Wood Panel Association(AKPINDO), the President Commissioner of BankMuamalat and President Director of PT. Intan BaupranaFrance (IBF).

2 Prof. Korkut Ozal Prof. Ozal was born in Turkey in 1920. He holds an MScfrom the Faculty of Civil Engineering, Technical University(TU), Istanbul. He was a member of the Turkish Parliament

and, during his era in politics, he served as the Minister ofAgriculture and as well as the Minister of Turkey homeaffairs. In the mid 1980s he was appointed as the personaladvisor of Turkey Prime Minister. Between 1985 and 1996,he worked with the Islamic Development Bank (IDB) inJeddah, where he was Director of Islamic Research andTraining Institute of IDB and later, the Executive Director ofthe Turkish representative office of the IDB.

3 Aulia Pohan Aulia Pohan was born in 1945 and obtained his Bachelor ofCorporate Economics in 1969. In 1982, he held studies at

Boston University, USA in Economic Development Studies.In the late 1980s, he served as the Head of MonetaryDivision of Bank Indonesia. He was then appointed as theRepresentative Head of Economic and Statistical Affairs, andlater as the Head of Internal Research and Development atBank Indonesia. Between 1998 and 2005, he served as theDirector of Bank Indonesia and had spells as the Deputy ofthe Governor of Bank Indonesia.

4

5

IskandarZulkarnain

Dr.AhmedAbisourour

Iskandar Zulkarnain was born in Malang in 1961. In 1992, hecompleted an extension program at SI Faculty of Economics

at the University of Indonesia. In 2001, he completed S2Development and Management of Human Resources, also atthe University of Indonesia. He held different positionsthroughout his career, including Managing Director of PTInternusa Hasta Buana International Freight Forwarding,Vice Chairman of Economic Council of PP-Muhammadiyahand Vice Chairman of Badan Amil Zakat Nasional.

Dr. Ahmed Abisourour is a Moroccan national with a PhD inEconomics from the University of Connecticut, U.S.A. He


11/17

- 11 -

currently works with the Islamic Development Bank. Prior to joining the IDB, Dr. Abisourour worked as Chief FinancialMarket Economist at the Arab Monetary Fund in Abu Dhabi.Abisourour has 18 years of professional experience in anumber of monetary and financial institutions at the national,international and regional levels, with practical fieldexperience in more than 20 African and Middle Easterncountries. He participated in various consultations, use ofresources and technical assistance missions in connectionwith his work at the IMF and AMF. His professionalexperience is in the areas of capital markets development,macroeconomic and financial programming, exchange ratesystems and enhancement of the private sector.


12/17

- 12 -

Annex 2: Board of Directors


1. A. Riawan Amin

Riawan Amin obtained his MSc. in Interdisciplinary Studyfrom the University of Texas, USA in 1987 after completinghis BSc in Architectural Technology at the New YorkInstitute of Technology, USA in 1985. He also holds degreesin Social Politics and Architecture from the University of

Indonesia. Riawan Amin is well experienced with a varietyof managerial, development and instruction positions heldduring his career. He managed more than 500 humanresources in Islamic Banks and was head of ASTRA andDuta Officer Development Programs. He taught at severalinstitutions including Bank Duta and Industrial HygieneConsultants.

2 Ir. Arviyan Arifin Arviyan Arifin was born in Padang in 1964. He holds aBachelor Degree in Industrial Engineering from BadungInstitute of Technology. He is currently a Director and the

person responsible for the whole business, marketing andtreasury functions at BMI. He climbed the ranks of the bankfrom Assistant to Vice President Sub Division of Creditand Marketing, Head of Asset Restructuring Team and, since1999, as Director in the bank where he is currently servinghis second five-year spell at this level. Prior to Joining BMI,Arifin served as Head of Corporate Banking Department atBank Duta, Surabaya Branch, as well as Credit andMarketing Manager, Division of Corporate Banking, BankDuta, Jakarta. He is a member in the Indonesian Institute forCorporate Directorship, Ikatan Alumni ITB, PersatuanInsinyur Indonesia and Sarjana Teknik& ManajemenIndustri.

3 Ir. H. Andi Buchari Ir. H. Andi Buchari, MM. completed his Master ofManagement (MM) at Atmajaya University in 1996 wherehe was awarded with the Best Graduate certificate. He hadcompleted his Engineer (Ir) at the Bogor Institute ofAgriculture in 1999 where he was also awarded as the beststudent. He moved through the ranks of BMI to reach thelevel of Director. He had served as Alt. Branch Manager,Senior Account Manager for Corporate Banking, DivisionHead for Marketing, Division Head for Treasury andInvestment Banking, Division Head for Internal Audit,Division Head for Corporate Support and Regional Managerfor North Sumatera, West Sumatera and NAD. Buchariparticipated in numerous seminars and conferencesthroughout the Islamic World and gave lectures and speechesin different finance topics.

4 M. Hidayat M. Hidayat was born in 1964 and holds a Bachelor Degree in


13/17

- 13 -

Accounting from the Andalas University. He served in BankDuta from 1989 1993 as Account Manager, Head ofConsumer Banking and Marketing Collection Team Leader.He then joined BMI in 1994 where he currently serves as aBoard of Directors member. He Headed the followingdivisions within BMI: Financing Review & Treasury,Controlling Division, Operation and Head Office, Financing& Administration and Compliance & Corporate Supportwhere he was appointed director in 2007.

5 Ir. H. Herbudhi S.Tomo

Herbudhi Setio Tomo was born in 1966 and graduated fromBogor Agriculture University in 1991. He served as SeniorManager in Financing Work-Out Division at BMI since1999. Prior to this, he was Marketing Group Head (3) atBMI, Assistant Manger of Account Officer of CorporateBanking and Management Development Program Trainee.He is member at Ikatan Returnee Indonesia.

6 Drs. U. SaefudinNoer

Drs. Saefudin Noer has a Master Degree in CommunicationsManagement from the University of Indonesia (2006). Heworked as Head of Secretariat and Public Relations Division / Corporate Strategy and Assistant to President Director atBank Duta. He then served as Head of Corporate Strategy atBank Syariah Mandiri from 2000-2002. At BMI, he servedas Special Staff to President Director / Assistant Director forCorporate Relations and Corporate Support Group Head /Corporate Secretary. He is currently a member of the Boardof Directors at BMI.


14/17

- 14 -

Annex 3: Sharia Supervisory Board


1 Dr. KH. SahalMahfudh

Aged 69, Dr. Mahfudh is the current General Chairman ofthe Indonesian Council of Ulema (Majles Ulema Indonesia).He completed his high school at Mathaliul Falah IslamicSchool in Pati, Central Java. He belonged to the Santri

population of Java whose school of thought he studied bothin East Java (1953-1957) and in Holy Makkah (mid 1960s)under direct supervision of Shaikh Yasin Al Fadani. He alsostudied at Lemhanas and is one of its Alumni. He obtainedhis honorary doctoral degree (Doktor Honoris Causa) fromGovernment Islamic University (UIN), Jakarta in 2003.

He held various positions during his career, including:Secretary of Suriyah PWNU Central Java (1980-1982);Advisory Chairman of PWNU Central Java (1982-1985);Deputy to P#M chairman, Jakarta (1988-1990); General

chairman Majles Ulema Indonesia (current); and Plenarymember of National Education Advisory Board (BPPN). Heis also a member of various institutions Sharia Boards,including Bumiputera Insurance (Chairman), Bank HSBC(Chairman) and Bank Muamalat Indonesia (Chairman). He isalso Chairman of National Sharia Board (DSN) and directorof Mathaliul Falah Islamic school. He is the author of arange of books including: Nuance of Social Fiqh; Intifah Al-wadajain; Lanatul Asshab; Al-Bayan al-Mulamma; AlFaraid Al Ajbah Filrabi Badhi Alkalimat Al Ghariba andothers.

2 K.H. Maruf Amin K.H. Maruf Amin, aged 69, is currently the Vice Chairmanof the National Sharia Board (DPS).He graduated fromTebu Ireng Islamic Boarding School in Jombang in 1961. Hethen studied in a number of Islamic boarding schools inBanted between 1961 and 1963. In 1967, he graduated fromthe Faculty of Ushuluddin, University of Ibnu Chaldun.

He has a long organizational and occupational history thatincludes: Chairman of Anshor branch officeof Tanjung Priok(1964-1966); Lecturer of faculty of Tarbiyah University ofNahdlatul Ulama North Jakarta (1968-1971); Member ofProselytism coordinator (KODI) DKI Jakarta (1970-1972);Vice Chairman of NU of DKI Jakarta area (1968-1976);General Secretary of Syuriah PBNU (1989-1994); Plenarymember of Central Indonesian Council of Ulema (1990-now); Member of Commission VI of the House ofRepresentatives (1999-2001); Mustasyar DPP PKB (2000-now); Member of Health advisory board and syara ofMinistry of Health (2003-now) and various other


15/17

- 15 -

occupations.

3 Prof. Dr. H.Muardi Chatib

Aged 74, Prof. Chatib is a Civil Servant/ Lecturer/ Professorat the Faculty of Tarbiyah and Teaching Science, UINJakarta. He obtained his Islamic Junior High School atBukittinggi in 1953.He was certified as an official civilservant / teacher in 1957 after serving as a school teacher anda judge at a religious court in Bkkt.

He obtained his 3 year BA from Faculty of Tarbiya,ADIA/IAIN in 1963. In 1967, he was certified as Drs.Learning task service permanent lecturer at IAIN Facultyof Tarbiya in Jakarta, majoring in Religion science. He thencompleted a postgraduate certificate in 1975 as an SPS IAINLecturer after winning a scholarship by the faculty. In 1984,he completed his MA as an IAIN S2 degree, also afterwinning a scholarship. He obtained his DR. certificate withanother scholarship in 1989 as an IAIN postgraduate of S3.

His teaching experience includes many schools andeducational institutions. His positions included: The IslamicJunior High School (1950-1954); Teacher of Exact science atsome schools (1958-1960); Permanent lecturer, and thenProfessor of Faculty of Tarbiyah of IAIN (1987-2000);Lecturer of Religion of Muhammadiyah affairs ofAKPM/STIEAD (1989-2001); Religious lecturer atgovernment ABA (1969-1986); Emiritus Professor of FITGUIN Jakarta (2003-now) and many other occupations.

He also held various secretarial and organizational positions ,including: General Board of Commissioners of IndonesianIslamic Scouting (1958-1960); Secretary of MuhammadiyahTablig (1963-1965); Member of Tarjih PWM DKI Jaya(1971-1975); Member of Isbat Council (1992-2001);Chairman of central MUI / Dakwah (1999-2002) amongother occupations. He has been a member in MuamalatSharia Board since 1999.

4 Prof. Dr. H. UmarShihab

Born in 1939 in Rappang (Makassar), Prof. Shihab obtainedhis PhD degree in Islamic Law from the University ofHasanuddin. He has been a member of the ShariaSupervisory Board since 1999. His career started as alecturer at the IAIN (1963-present), member of the House ofRepresentatives (1987-1992), Dean of the Faculty ofUsuluddin (1981-1989), Dean of the Sharia Faculty (1987-1991), Rector of the Islamic University (1992-1996) andEducational Director of Ulama Cadre (1994-1996).

He has been active in Islamic movement since his youth,starting from Islamic Student Association (PII) (1960-1964);Chairman of the Makassar Branch of the Association ofIslamic University Students, HMI (1962-1998); Chairman ofthe South Sulawesi Chapter of the Indonesia Council ofUlemas (1987-1998); Deputy of the Indonesian Council ofMosques (1994-1999); and the Chairman of the Central


16/17

- 16 -

Board of the Indonesian Council of Ulemas since 1998.

Annex 4: Internal Sharia Control


1 Drs. Agustianto Dr. Agustianto was born in 1967. He obtained his PhD inIslamic Economics and Finance at Postgraduate Universityof Indonesia. Prior to that, he completed undergraduatestudies at the Syariah Faculty, The State of Islamic Institutein 1992 as well as postgraduate studies in 1998. He lectures

at Postgraduate University of Indonesia in several subjects inIslamic Economics, Business and Finance. He is also amember of The General Secretary of The IndonesianAssociation of Islamic Economists.

2 Dr. MuhammadAnwar Ibrahim

Dr. Ibrahim was born in Palembang in 1941. He holds aDoctor from Sharia and Laws Faculty at Al-AzharUniversity of Cairo. He also holds a Master degree from thesame faculty and a Bachelor Degree in Sharia from theSyariah Faculty IAIN Raden Fatah, Palembang. He heldseveral posts during his career including Dean of Syariah IIQFaculty from 1992 to 1994 and Deputy Head of University I

of the Koran Institute of Science in Jakarta from 1994 to1998. He is a Committee Member of Religious Matters ofMUI (Council of Moslem Religious Leaders of Indonesia)since 1997 and was appointed Vice Chairman in 2000. He isalso consultant at Muamalat Institute since 2000.

3 Mr. MohamadHidayat

Mr. Hidayat was born in Jakarta in 1968. He completed anundergraduate program at the Sharia Faculty of IAINJakarta in 1991. In 1994, he concluded Business Laweducation at The A Team in Jakarta, and in 1996, an IslamicBanking Course at BIRTH Malaysia. He obtained his MBAfrom IPWI Jakarta in 1999 and MH from IBLAM in 2003.

He is currently conducting his Doctorate Program in IslamicEconomics and Finance at Trisakti University. He heldseveral posts during his career, including membership inMUI National Sharia Council, General Chairman of AlWashiyyah Foundation and in the Founder Team of TakafulIndonesia. He also published a number of books in Fiqh andSharia Banking, including: Bank Syariah di Indonesia(Sharia Bank in Indonesia), Investments Social Fund, Multilevel Marketing Sharia and Fiqh Perdagangan Bebas(Free Trade Legal). He is currently a member of the NationalSharia Board Indonesian Council of Ulama, Lecturer atIAIN Jakarta, Board of Directors Advisor at Bank MuamalatIndonesia, among other positions in the fields of advisoryand education.

4 Mr. Ikhwan A.Basri

Mr. Basri obtained is MA degree in Islamic studies fromJamia Salafiyah at Faisalabad, Punjab, Pakistan. Prior tothis, he had completed his BSc in Islamic Economics fromthe International Institute of Islamic Economics at theInternational Islamic University in Islamabad, Pakistan. He isa member in several Sharia Monitoring Bodies in Indonesia,a member of National Sharia Council (DSN), Graduate


17/17

- 17 -

Lecturer on Islamic Economics at Universitas Indonesia and

a Sharia Consultant to Indonesian Banking DevelopmentInstitute. He has an array of publications in IslamicEconomics, Regulation and Banking.

5 Mr. GunawanYasni

Mr. Yasni holds an MBA (majoring in Finance) fromPrasetiya Mulya Graduate School of Management,Indonesia. He is also a Certified Islamic Financial Analyst bythe University of Indonesia and Muamalat Institute and aregistered accountant at the Ministry of Finance. Since theearly 1990s, Mr. Yasni worked in a number of supervisoryand consultancy positions, including membership in theSharia Supervisory Boards of BATASA Sharia Fund andSIMAS Sharia Insurance. He is currently a member in theSharia Supervisory Boards of Deutsche Bank ShariaCustodian & Investment, Astra Buana Sharia Insurance andSarana Pengembangan Usaha. He is also a member of theNational Sharia Board Indonesian Council of Ulama andthe National Sharia Board at the Ministry of Finance TaskForce.

20080205 muamalat sqr report

Documents