JAKARTA, (Reuters) – Indonesia’s fourth-largest lender, PT Bank Negara Indonesia Tbk, aims to sell $50 million of Islamic bonds in Malaysia this year, the president director said on Friday.
Indonesia, the world’s most populous Muslim nation, has lagged behind neighbors Malaysia and Singapore in developing an Islamic market.
“We are now at the pre-marketing stage, the tenor may range between 5 to 10 years…We will issue it when the market and the price is good,” president director Gatot Suwondo told reporters, adding the bank has appointed HSBC and CIMB as underwriters.
He did not elaborate on the currency to be used in the issuance.
Islamic bonds do not pay interest, which is banned as usury under Islamic law and structured as profit sharing or rental agreements underpinned by physical assets.
The government plans to issue its first retail sukuk bond next month to help develop the Islamic market, which had lagged behind other countries due partly to a weak regulatory framework.