This study aims to determine the existence of Islamic banking health in Indonesia during 2014-2018 using the RGEC (Risk profile, Good Corporate Governance, Earning, Capital) method. Risk profile with NPF and FDR approach. GCG with 11 management elements. Income with ROA, ROE and BOPO approaches. Capital with CAR approach. The sample taken is 11 Islamic banks that have spin of (separately) from their parent, and successively submit financial reports, GCG reports and risk management reports annually to Bank Indonesia. Data collection was carried out by accessing Islamic bank data which were examined through the official websites of BI, OJK and each Islamic bank website. Data analysis used quantitative descriptive method. The results show that the average condition of Islamic banking during 2014-2018 shows a composite rating of 2 or in a healthy condition but has not reached composite 3. An important research implication for Islamic bank management is that Islamic banks must continue to increase capital and profits then manage risk and run good governance so that the health of the bank is maintained and able to compete with conventional banks.
The literature study of this article aims to analyze the challenges that must be considered by financial regulators, especially for Islamic financial institutions (Islamic banking). Literature study through content analysis by discussing the book Intermediate Islamic Finance by Nabil Maghrebi, Abbas Mirakhor, and Zamir Iqbal Wiley publisher in 2016 and 30 articles from emerald and direct science publisher which is the world's best journal publisher with a scopus index. The results of the content search found seven challenges in financial regulation, namely the calculation of profit and loss sharing (PLS) still referring to the interest system, the practice of implementing contracts overshadowed by conventional contracts, capital and minimum liquidity regulations still referring to general regulations, regulatory indicators in assessing efficiency still referring to in the general (conventional) model, weakness of regulations requiring Islamic financial institutions in and supervision, weakness of regulatory control in implementing good corporate governance, weaknes of sharia law courts dealing with violations of sharia law. Financial regulations have not fully sided with Islamic banking (sharia). Financial regulations must continue to be adjusted and rearranged so that Islamic banking can develop and develop in a healthy manner with conventional banking and be resilient in the face of crises. Key words : challenges, finance regulation, islamic banking
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