products that adhere to islamic rules. meanwhile, a bill to tax sharia transactions is being drafted, which we expect will be passed shortly. we hope that it will provide fairer tax treatment for sharia financial activities, thus making sharia products more competitive. concerning the current global financial crisis, indonesia ’ s sharia banking industry has remained relatively stable and insignificant affected. this fact is positively contribured by low exposure to international investment and foreign exchange transactions in indonesia ’ s sharia banks. it is approximately just 5 % of total assets and liabilities. annual growth in assets, deposits and sharia banking financing remains high, at 29. 5 %, 27. 1 % and 26. 08 % respectively in may 2009. stable sharia bank performance is also clearly evidenced by low industry - wide non - performing financing ( npf ) at just 6. 19 % in may 2009, despite a slight increase in march and april 2009. npf has remained relatively steady compared to npf in 2007 and 2008 at 6. 62 % and 5. 75 % respectively. with regards to capital, tier - 1 capital position also increased to rp2. 48 trillion, compared to its 2008 position of rp2. 19 trillion. however, we are aware that a lot of homework and groundwork still remains to be done. there are issues regarding the basic structure of sharia products, both for asset finance and fund raising or liability products. these products require further clarification and clearer guidance not only from the banks but also from the authorities. another set of challenges that lie ahead in terms of further nurturing sharia finance is how to effectively introduce and sell related products to this potentially huge market. sharia financing and indonesia ’ s economic outlook ladies and gentlemen, we believe that the potential of sharia financing in indonesia will continue to grow in the future. in a country with such a large muslim population the potential for sharia product expansion is great. currently, the number of sharia users is relatively still limited, namely 3. 3 million fund account holders and 525 thousand financing account holders. the outlook for sharia financing in indonesia is keep promising thanks to robust economic outlook. indonesia ’ s economy, in fact, has outperformed many other countries in the region and peer group. economic activities have been sustained by relatively strong domestic demand, capable of absorbing domestic production and preventing the market from falling deeper off the precipice of recession. in the first quarter, the economy recorded

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 :