Banking Payout Dividend Key To Shareholder Balance And Financial Stabilization

JAKARTA Chief Executive of Banking Supervision of the Financial Services Authority (OJK), Dian Ediana Rae said that banking dividend payout is an important key, in order to realize the balance between shareholders and the company's financial resilience.

Dian explained that banking payout dividends are now regulated in OJK Regulation No. 17/2023 concerning the Implementation of Governance for Commercial Banks (POJK Governance).

"We have just issued OJK Regulation No. 17 which is related to governance is one of the core issues and will have a broad impact on everything. Of course, this is not related to the governency problem alone, but it is wider than that," he said in The Finance Executive Forum, Tuesday, November 14, 2023.

Dian conveyed that the important points in POJK number 17 are like digital resilience requirements where financial institutions are now required to assess and improve their digital capabilities before determining dividend payments.

In addition, there is also sustainable financial integration, flexible dividend payments and strategic resource allocations.

Dian explained that POJK rule number 17 aims to achieve a balance between shareholder interests and strengthening the financial sector. This regulation does not provide strict but encouraging boundaries by considering the bank's IT system, digitalization efforts, and overall financial resilience.

"One of the most important aspects of strengthening banking now is how to build an IT (tech information) system," he said.

Dian said that in developing a safe IT system, a fairly large cost is needed. Therefore, dividend payouts will be required and prioritize IT costs first.

"This is very costy. Therefore, the dividend out will be required whether all banks already have a fairly good program due to the implementation of the IT system and general digitization," he explained.

Dian conveyed that taking into account digital resilience, sustainable practice, and a wider economic landscape, banks can determine directions that not only benefit shareholders but also contribute to the stability and growth of the financial sector as a whole.