iarjbmIARJBMIARJBM2708-514710.47310/iarjbm.2020.v01i02.012The Role of Islamic Banking Industry in Indonesia's Economic GrowthCutDeviRiantiRajaMasbarSurianiMaster Student in Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia;Professor, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia;Associate Professor, Faculty of Economics and Business, Universitas Syiah Kuala, IndonesiaThis study investigates the role of Islamic banks in the Indonesian economy over the period from 2009 to 2019. Based on the error correction model, the study documented that Islamic banking institutions have significantly contributed towards the promotion of the Indonesian economy in the long-run, but their contribution in the short-run is found to be insignificant. The study suggests that to promote national economic growth further; the government should design supportive policies to encourage Islamic banks to provide more investment financing distribution to the real sector. Islamic banks are expected to cooperate with the monetary authorities to improve their performances so that they can compete with conventional banks and consequently drive the entire sector of the econom.