THE DEVELOPMENT OF SUKUK ORIGINATION BUSINESS MODEL FOR XYZ BANK IN INDONESIA

• Main Author: PERDANA SATRYAWAN (NIM: 29108088); Pembimbing: Dr. Ir. Mohammad Hamsal, MSE, MQM, MBA, IMBANG
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/16033
• Institution: Institut Teknologi Bandung

The Bank is one of the strongest and biggest banks in the world with a wide-range of banking products <br /> <br /> <br /> and services offer, including Islamic financial products. Rapid development in Indonesian Islamic debt <br /> <br /> <br /> capital market has attracted the Bank to enter the Sukuk origination businesses in Indonesia. However, the Bank has not formulated a proper business model that can be used in Indonesia due to the several limitations from regulatory requirements and risk appetitive of the Bank in emerging market. <br /> <br /> <br /> Therefore, the Bank should find solutions on how to utilize the current business entities in Indonesia <br /> <br /> <br /> as the main vehicles to develop Sukuk origination business. <br /> <br /> <br /> In order to formulate the business solution by developing business model, the researcher uses <br /> <br /> <br /> qualitative research method through literature review, observation of business process, and depth interview with local management, regional Islamic Business Unit management and a member of National Syariah Board. <br /> <br /> <br /> The research conducted has resulted in the formulation of business strategy and business model that can be applied in order to achieve the objectives of the Bank to develop Sukuk origination business in Indonesia. Gap analysis performed reveals that there are two major issues that currently faced by the bank in entering the market. First, the bank has no reputation in debt capital market origination business in Indonesia due to the current business of the Bank has focus to another business. Second, there is a lack of resources locally to execute the business due to the absence of local platform. As a solution, the Bank should allocate a specific budget to prepare the local Islamic platform and to support the marketing activities with the objective to develop Bank's reputation and acquire the business. <br /> <br /> <br /> In addition, the product analysis notes that there is a taxation issue that becomes a major obstacle in <br /> <br /> <br /> developing Sukuk in Indonesia. There are two alternative solutions for the bank. First, the Bank can work closely with tax consultant to address all possible tax implication for each type of Sukuk structure. Second, the Bank may start the origination business by selecting Sukuk Ijarah as starting point since this structure has been proven for no taxation issue arise and also been recommended by a member of DSN.