The steady growth of sharia-compliant assets suggests banks believe in the future of the sector, but the dismantling of the largest cross-border Islamic window raises questions about whether global banking groups can make a success of the business.

Indonesia's banks suffered heavy setbacks during the 1998 Asian financial crisis, but in the 20 years since, the country's recovery has seen its banking sector outperform the rest of the Association of South-east Asian Nations region.

With an emphasis on customer-centric services and products, Indonesia’s microfinance sector is proving to be extremely lucrative, not only for the banks involved, but also for the country’s large population and growing economy.

An increasing number of financial institutions from international banks to local specialist players are developing sharia-compliant structured products, offering investors limited downside risk and high returns. But as the uptake for such products increases, so does the pressure of ensuring that they are 100% sharia-friendly.

Indonesia’s finance minister Agus Martowardojo was The Banker’s Finance Minister of the Year 2012, global and Asia-Pacific. He explains the economic polices behind the country's impressive growth.

Policy reforms in Indonesia's banking sector have transformed shareholding structures and foreign investors have scooped up local banks. But further change is needed to enable the country to cope with an anticipated economic explosion, say local bankers. Writer Michelle Price