<![CDATA[Islamic banking in Indonesia has existed for more than three decades; however, its market share of the national banking industry has remained stagnant at around 6–7%, a figure that is highly disproportionate considering that Indonesia is home to the largest Muslim population in the world. This study aims to identify and analyze the structural and non-structural factors that have contributed to the stagnation of Islamic banking market share in Indonesia through a library research approach. Data were collected and analyzed from various scientific literature sources, Financial Services Authority (OJK) reports, Islamic banking statistics, and relevant regulatory documents. The findings reveal two interrelated fundamental causes. First, structural constraints arise from the ownership structure of Islamic banks, which is predominantly controlled by conventional parent banks, resulting in conflicts of interest, limited capital support, and an unequal position within the banking ecosystem. Second, the low level of Islamic financial literacy among the public has led to weak consumer preference and even misconceptions that Islamic banks are no different from conventional banks. These two factors reinforce one another and create a cycle of stagnation that is difficult to overcome without comprehensive structural intervention. This study recommends ownership reform to enhance the independence of Islamic banks from their conventional parent institutions, the strengthening of massive and sustainable Islamic financial literacy programs, and the reinforcement of regulations and the broader Islamic economic ecosystem. Keywords: Islamic Banking Market Share, Structural Constraints, Islamic Financial Literacy, Bank Ownership, Islamic Banking Stagnation.]]>
