Strengthening the Performance and Role of Islamic Bank Intermediation in Indonesia during the Covid Pandemic 19

This research aims to find credit restructuring then draw some steps banks syariah should do to strengthen its performance and its role as financial intermediary in COVID-19 condition. The descriptive-critical analysis is used in this paper. The analysis began by presenting data on credit restructuring, its forms used by national banks, and credit restructuring policy issued by OJK to anticipate negative impact of COVID-19 on banking syariah activities. Analysis continued to application of the policy to find credit restructuring on banks’ performance and its intermediary financial role. Based on the analysis, some steps are recommended to followed by banks syariah to strengthen its performance and intermediary financial role. This research found some credit restructuring. First, credit restructuring needs high capital and liquidity so that the banks which have low capital will be in trouble and will affect financial system nationally. Second, credit restructuring needs some sorting process, which will exclude unpotential debitur. Third, uncertainty of recovery process of debitur as impact of COVID-19. Forth, how long banks could use credit restructuring while maintaining its performance and intermediary financial role. Hence, credit restructuring would not be enough for banks syariah to play its role in supporting debitur, maintain its business, strengthen its performance and intermediary financial role, and positively play role for economic growth and society. This research suggests five concrete steps banks could use to strengthen its performance and financial intermediary role.