Sharia Banking Investment Products: POJK 4/2026

The Financial Services Authority (Otoritas Jasa Keuangan, OJK) has issued a regulation governing investment products offered by sharia banks. The full official title is Peraturan Otoritas Jasa Keuangan Nomor 4 Tahun 2026 tentang Penyelenggaraan Produk Investasi Perbankan Syariah (Financial Services Authority Regulation Number 4 of 2026 on the Conduct of Sharia Banking Investment Products). The regulation, consisting of 26 articles, applies to sharia commercial banks (Bank Umum Syariah, BUS), sharia business units of conventional banks (Unit Usaha Syariah, UUS), and sharia people's financing banks (Bank Perekonomian Rakyat Syariah, BPR Syariah).

Issue

The regulation defines a product category in which investment risk rests with the customer rather than the bank. Pasal 1 defines Investment (Investasi) as funds entrusted by an investor customer to a bank under a mudarabah contract, a partnership in which the capital provider supplies the funds, the manager runs the venture, and profits are shared according to an agreed ratio, or under another contract consistent with sharia principles, with the risk borne by the investor customer. A Sharia Banking Investment Product is the bank's activity of collecting such investment funds and channelling them to an underlying productive asset for the benefit of the investor customer.

Key Provisions

Pasal 9 sets the prudential treatment where the investor customer is itself a financial services institution: risk weights on the underlying asset follow the OJK rules applicable to that institution; the maximum investment limit is calculated with a look-through approach, proportional to the underlying assets of the product; asset quality is measured by the ratio of realised to projected investment return (RPI/PPI) under the annex; and any impairment reserve is borne by the investor customer. Pasal 10 attaches consumer-protection duties: banks must apply OJK's rules on consumer and public protection in the financial services sector, ensure the suitability of the investor customer for the product offered, and convey product information transparently, with the detailed suitability and disclosure requirements to be set by OJK. Pasal 11 provides tiered administrative sanctions. A first violation of the listed conduct provisions draws a written warning; continued violation exposes the bank to a prohibition on issuing new products, suspension of certain business activities, bans on expansion or on new lines of business, and a downgrade of the governance factor in the bank's soundness rating, while the bank's main parties may be barred under OJK's reassessment rules. In addition, BUS and UUS face fines between Rp2,000,000,000.00 (two billion rupiah) and Rp50,000,000,000.00 (fifty billion rupiah) for each violation, and BPR Syariah between Rp10,000,000.00 (ten million rupiah) and Rp100,000,000.00 (one hundred million rupiah). Pasal 4 applies the same sanction tiers to violations of Pasal 2 paragraph (4) and Pasal 3 paragraph (1).

Implications

Pasal 12 sets the transition arrangements: banks that already offer sharia investment products must bring them into conformity within 2 (two) years of entry into force and/or until the contract term ends, and licence applications pending at entry into force are processed under the new rules. The suitability duty in Pasal 10 places the task of matching product and customer on the bank even though investment risk is allocated to the customer, and the fine ranges in Pasal 11 are set separately for BUS and UUS on one hand and for BPR Syariah on the other.

Regulatory Context

POJK 4/2026 forms part of OJK's 2026 regulations for the financial sector, alongside its rules for underwriters and broker-dealers. Administrative fines as an enforcement instrument also operate outside the financial sector, for example under the environmental administrative fines provisions. Within the sharia banking segment, the regulation supplies the conduct basis for investment products whose returns and losses accrue to the investor customer.

Read the full regulation in the CRPG Law Database.

Methodology: This memo summarises the official regulation text and is not legal advice; report corrections to contact@crpg.info.

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