Ministry of Justice has officially registered amendments to the regulation governing the conversion procedures for microfinance organizations and banking operations. The updated document was drafted to align with legal requirements introduced as part of the country's push to establish Islamic banking.
Under the revised regulation, a microfinance organization may now be converted only into a microfinance bank that exclusively carries out Islamic banking operations, with a further pathway allowing that microfinance bank to subsequently become a full Islamic bank. The regulation also allows for the reverse process — converting an Islamic microfinance bank back into a standard microfinance organization, or converting an Islamic bank into an Islamic microfinance bank.
The document further states that conventional banks may reorganize themselves to operate exclusively as Islamic banks, provided they meet the legal requirements and procedures set out for obtaining Islamic bank status.
However, the regulation specifies that only a microfinance bank already operating exclusively under Islamic banking principles is eligible to make the transition to full Islamic bank status.
Under the new rules, registering a microfinance bank with the state and securing the necessary licenses will also require a formal opinion from the Inspectorate for Construction and Housing and Utilities Oversight, confirming that the bank's premises meet building codes for accessibility, including facilities for people with disabilities.
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