BI’s Banking Supervisory Authority: The Explanation

The Coordinating Maritime Affairs and Investment Minister (Menko Marves), Luhut Binsar Pandjaitan, revealed that the government was currently preparing a Government Regulation in Lieu of a Law (Perppu) to reform the financial system. It was necessary since a crisis would disrupt the roles of three regulatory agencies.

He also briefly mentioned three banks facing troubles some time ago: PT Bank Bukopin Tbk, PT Bank Mayapada Tbk, and PT Bank Pembangunan Daerah Banten Tbk and explained the need to expand BI's role through the revision of the Bank Indonesia (BI) Law. "The government will not touch BI's independence. However, the law will include an additional authority," Luhut revealed in a public lecture at the Faculty of Business Economics, Universitas Indonesia, on Friday (9/18).

On banking supervision, Luhut insisted the need for financial reform to handle troubled banks quickly, especially those that fall under the category of banks under intensive supervision or special supervision. Currently, the instruments owned by BI, the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS) could not fully assist the banks since existing regulations did not allow them to do so. "They need more tools. We are currently looking for the right answer," Luhut argued.