This study aims to evaluate the role of regulation in shaping the history and development of Islamic banking within the dual banking system in Indonesia. The focus is on mapping regulatory policies, institutional responses, and the dynamics that influence the positioning and growth of Islamic banking institutions over time. The method employed is a Systematic Literature Review (SLR), involving the identification and analysis of 30 scholarly articles from various accredited national journals. The selected literature was examined based on themes of regulation, institutional history, and its impact within the context of a dual banking system, using narrative synthesis and thematic analysis. The findings indicate that regulations such as Law No. 21 of 2008 have provided a significant legal foundation for Islamic banking. However, challenges remain, particularly in harmonizing conventional and Islamic policies, improving the competence of human resources, and preparing for financial digitalization. The review also notes that most studies tend to emphasize operational aspects rather than exploring regulatory dimensions from a historical and systemic perspective. The implications suggest the need for more inclusive and adaptive regulatory frameworks that align with the specific characteristics of Islamic banking. Furthermore, collaboration between regulators, academics, and industry stakeholders is essential to strengthen the position of Islamic banks within a sustainable and equitable national financial system.
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