Greater Coverage for Guaranteed Banking Deposits

Summary

Several cases affecting the financial industry in Indonesia have recently triggered the Deposit Insurance Corporation (LPS) to expand the coverage of bank deposit guarantees to improve protection over public funds. Therefore, LPS will guarantee a depository account that collects public funds even if it exceeds the maximum guaranteed balance of Rp 2 billion per bank, which had been enacted since October 13, 2008.

Among depository accounts planned to be included in the LPS guarantee belong to pension funds, social funds, and religious funds such as zakat, donations, and alms. LPS Board of Commissioner Chairman Halim Alamsyah said on Wednesday (1/22) that the guarantee mechanism will resemble the guarantee of Hajj funds in an account owned by the Hajj Financial Management Agency (BPKH). Currently, LPS is still reviewing whether the banking deposit guarantee expansion requires a revision in the LPS Law or only through government regulations.

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