withdrawal through domestic banks. bank indonesia is also reviewing some regulations to enrich forex market instruments in order to revitalize hedging transactions. to curb regional inflation, we will optimize the functions of bank indonesia regional offices ( kbi ) as facilitator and catalyst for the acceleration of development in the region, particularly in eastern indonesia where growth is still having immense disparity. kbi will be encouraged to carry out its functions effectively by strengthening coordination and cooperation as well as synergizing with local government. in the future, task force for regional inflation control team ( tpid ) should be sustained by strategic consumer goods information systems primarily encompassing information on national production and stock. to achieve this target, strong commitment and support from a wide variety of parties, including from relevant ministries such as ministry of agriculture, ministry of commerce, as well as local government is significantly needed. distinguished guests, ladies and gentlemen, on the banking sector front, policy will be directed to maintain a proper balance between improving competitiveness and strengthening banks ’ resilience, as well as encouraging banks ’ intermediation function including broadening access to low cost banking services for the rural community. in order to improve banks ’ competitiveness, kebijakan suku bunga dasar kredit ( sbdk ) will be carried on to ensure a well - functioning market mechanism so as policy targets could be achieved. from banking supervision perspective, we will continue to enhance enforcement of policy by requiring banks to include an appropriate level of targets on efficiency improvement and credit rates lowering in their business plan. bank indonesia is also looking into the practice of interest rate setting for third party above the level set by the indonesia deposit insurance, as well as limiting the conduct of prize or gift offering to banks ’ customers. policy to strengthen banks ’ resilience will be conducted through improving banks ’ capital structure. it is hoped that such policy can reinforce bank in anticipating potential risk specifically amidst global economic uncertainty. i see that policies on consumer protection and governance also need special attention. following several act of banking frauds during the course of 2011, policy in these two aspects needs to be reviewed. for that reason, in 2012 we will continue to refine several aspects related to customers and potential customers protection. bis central bankers ’ speeches furthermore, to improve banks ’ governance, several regulations on financial report transparency would be reviewed particularly in relation to published financial report and regulation pertaining to appointment of public accountant by banks. we also will examine

their primary function, namely to collect funds from their owners and distribute it to borrowers. to be more precise, the main function of banks is to facilitate and finance activities associated with the supply of goods and services to the people ; more specifically “ real ” activities. therefore, financing activities through sharia banking are closely linked to real sector development. moreover, speculation and gambling, the main culprits behind the on - going crisis, are not tolerated. thus, by design, the islamic financial system can instill greater stability in an economy. and, if implemented correctly, the islamic financial system can provide an optimal risk management system. sharia financial system performance ladies and gentlemen, the potential role of sharia financial institutions in the economy has been discussed on numerous occasions. according to the banker magazine in 2007, sharia - compliant assets worldwide have grown by almost 30 % per annum in recent years. such growth outstrips most other business segments in financial services. in 2008, sharia financial assets worldwide reached $ 643 billion and are expected to exceed $ 1 trillion by 2010. in fact, there are currently more than 400 financial institutions offering sharia compliant products globally, including sukuk, which has created significant demand in the market over the last five years. countries like united arab emirates, saudi arabia and malaysia are competing to become centers of islamic finance. in such a competitive environment, indonesia also has a great opportunity to advance itself as the center of islamic finance. as the most populace muslim country on the planet, with a population of more than 237 million, indonesia is undoubtedly a promising market. since the establishment of its first islamic bank in 1992, the sharia industry in indonesia has exhibited relatively robust growth. sharia banking is in its infancy since the establishment of the first islamic bank in 1992, however, has demonstrated strong and steady growth. business volume has grown expansively, exceeding the growth rate of the banking industry as a whole. currently in indonesia there are three full islamic banks ( fibs ), 19 islamic banking units at conventional banks ( ibus ), and 92 islamic rural banks. as a whole, the industry is supported by 531 islamic bank offices currently operating throughout indonesia ( 288 fibs, 121 ibus and 92 rural banks ). the sharia banking industry has amassed total assets amounting to rp50 trillion ( usd 4. 2 billion ), or 2. 1 % of all bank assets in indonesia. this share has increased steadily from previous years :