Scheduled to be presented this month to industry players, the roadmap aims to establish separate legal policies and infrastructure for the Islamic banking sector, which currently has to match up to more mature markets in Malaysia and the Middle East, Reuters reported.
Bank Indonesia deputy governor Halim Alamsyah said: "The Islamic economy can go hand in hand with the conventional side until a certain point.
"As it becomes bigger, this may be the right time to have a separate way forward.
"This is quite a deep review and I’m not surprised if the roadmap we have in the end is a full-fledged revision of what we have had."
Bank Indonesia is working with the country’s financial services authority, Otoritas Jasa Keuangan (OJK) to give regulatory support for Islamic banks to hold at least 15% of the market by 2023.
Three options are being considered, which include the merging of several existing Islamic banks, the conversion of an existing conventional bank into an Islamic one, and establishment of a new standalone Islamic bank.
OJK sharia banking executive director Edy Setiadi said the standalone entities would have an ideal size of around IDR200tn ($16.5bn).
In addition, the regulators are considering ways to channel more government-related transactions to Islamic banks, including new incentives to simplify the sale of Islamic products for the banks.
Setiadi said the regulators are also looking at laws that will give regulatory approval to more Islamic banking products, enabling a wider product range to help sharia-compliant banks get a bigger share of the market.
Despite having the world’s biggest Muslim population, Indonesia’s Islamic banks held 4.9% of total banking assets in the country in 2013.
According to Bank Indonesia data, there were 11 full-fledged Islamic banks and 23 Islamic windows in Indonesia with combined assets of IDR242tn last year.
