Bank Indonesia (BI) may not regulate and supervise bank when the Finance Service Authority (OJK) is established. The central bank will focus only on the payment system and monetary policy activities.
The scheme was on the final draft of OJK bill which will be proposed to the House of Representatives next month for Law deliberation.
The 34 pages draft bill mentions that regulation and OJK supervision is divided into bank, capital market and non bank finance industry. Formerly, it was the task of BI and Bapepam-LK.
OJK will later take over bank regulation function such as bank establishment procedure, permit issuance, branch office opening and party with the rights to acquire bank stocks both individually or legal entity.
BI will no longer regulate the appointment of a bank commissioners, directors, boards and expatriates.
The central bank will no longer conduct check and stipulate the information provision by bank, set up credit and financing guidelines up to a bank confidentiality.
Despite the fact that OJK will have been authorized to rule and supervise commercial banks both conventional and sharia, the draft does not mention that people credit banks are included in the authority here.
Besides, the central bank still serves as the lender of the last resort for banks with liquidity constraint despite the absence of routine supervision.
With the absence of bank data access, it may be hard for BI to transmit monetary policy. The policy of the central bank might not be in harmony with the banking condition.
In Chapter IV Article 37 OJK is stipulated to coordinate with BI, Finance Ministry, nd LPS through the finance sector stability forum in a bid to support the tasks and authority of each intuitions.
The coordination with BI is necessary to back up monetary policy including open market operation minimum reserves, payment system, and liquidity facility.
To ensure and maintain finance system stability, in joint supervision BI might execute onsite and offsite supervision to banks.
OJK is led by the commissioners boards with nine members consisting of one chairman, three independent members, one ex officio from BI, one ex officio of Finance Ministry, and each chief executive of three supervisory sectors.
In this case, Finance Minister has the largest authority to propose commissioners boards from independent commissioners and ex officio. BI is only ex officio of BI governor boards. Commissioner from chief executive is taken internally.
OJK has stronger roles than the current finance institution supervision. BI and Bapepam-LK are the authorities for conduction investigation and queries. To carry out the tasks, OJK could hire police and attorney office investigators in a certain period.
The draft bill aloe mentions OJK will be effectively implemented in three years after the deliberation of the law. Each supervisory staffers form BI and Bapepam-LK will fill the posts here at OJK. Infrastructure of both intuitions will become one in OJK.
The 34 pages draft bill mentions that regulation and OJK supervision is divided into bank, capital market and non bank finance industry. Formerly, it was the task of BI and Bapepam-LK.
OJK will later take over bank regulation function such as bank establishment procedure, permit issuance, branch office opening and party with the rights to acquire bank stocks both individually or legal entity.
BI will no longer regulate the appointment of a bank commissioners, directors, boards and expatriates.
The central bank will no longer conduct check and stipulate the information provision by bank, set up credit and financing guidelines up to a bank confidentiality.
Despite the fact that OJK will have been authorized to rule and supervise commercial banks both conventional and sharia, the draft does not mention that people credit banks are included in the authority here.
Besides, the central bank still serves as the lender of the last resort for banks with liquidity constraint despite the absence of routine supervision.
With the absence of bank data access, it may be hard for BI to transmit monetary policy. The policy of the central bank might not be in harmony with the banking condition.
In Chapter IV Article 37 OJK is stipulated to coordinate with BI, Finance Ministry, nd LPS through the finance sector stability forum in a bid to support the tasks and authority of each intuitions.
The coordination with BI is necessary to back up monetary policy including open market operation minimum reserves, payment system, and liquidity facility.
To ensure and maintain finance system stability, in joint supervision BI might execute onsite and offsite supervision to banks.
OJK is led by the commissioners boards with nine members consisting of one chairman, three independent members, one ex officio from BI, one ex officio of Finance Ministry, and each chief executive of three supervisory sectors.
In this case, Finance Minister has the largest authority to propose commissioners boards from independent commissioners and ex officio. BI is only ex officio of BI governor boards. Commissioner from chief executive is taken internally.
OJK has stronger roles than the current finance institution supervision. BI and Bapepam-LK are the authorities for conduction investigation and queries. To carry out the tasks, OJK could hire police and attorney office investigators in a certain period.
The draft bill aloe mentions OJK will be effectively implemented in three years after the deliberation of the law. Each supervisory staffers form BI and Bapepam-LK will fill the posts here at OJK. Infrastructure of both intuitions will become one in OJK.
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