The five-yearly political events – presidential and legislative elections – were held making the political temperature rise. However, the Chief Executive of OJK Banking Supervision, Dr. Dian Ediana Rae, SH, LL.M, believes that the fundamentals of the Indonesian economy are good. When many countries in other parts of the world are struggling, Indonesia is still strong. He is sure that whoever will lead after the presidential election will remain in the existing corridor.

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Based on data released by the Central Bureau of Statistics (BPS), throughout 2023 Indonesia's economic growth will be relatively stable. The first quarter economic growth was 5.06% and in the second quarter it increased to 5.17%. This figure decreased slightly in the third quarter to 4.94%.

What should be noted is that even though it has decreased, this figure is among the highest among the G20 countries. The first record for highest growth in the third quarter was held by India with a growth rate of 7.60%. In second and third positions are Turkey (5.90%) and Russia (5.60%). Then followed by Indonesia with 4.94% and China 4.90%.

“Our economic growth is among the highest. Meanwhile in countries other than that, growth is small, meaning growth for business is also limited. If that's the case, they will look for other, more promising investment places, that's the law of economics," said Dian Ediana Rae.

According to him, the heated situation ahead of the presidential and legislative elections is normal. “Elections are hot not only in Indonesia, in other countries too. Remember, this is not the only time we are holding an election. Our economic fundamentals are quite strong, so whoever wins the presidential election will not be able to escape the corridor, which means it must be based on the constitution and existing regulations in implementing the financial sector," he explained.

Even though political turmoil is increasing, Dian believes there is little chance of turbulence because the economic fundamentals are relatively good, especially when compared with other countries. "In my opinion, our country's infrastructure is strong enough to face the turmoil that will occur due to increased political activity in 2024. Hopefully the growth trend will continue," he said to Edy Suherli, Bambang Eros, and Irfan Medianto from VOI who visited him at the OJK office, Bank Indonesia Office Complex, Thamrin Street, Jakarta recently. Here is the full excerpt.

OJK's vision is to regulate, supervise and protect the financial industry in the country, in this regard, what have you and your staff done?

We have been working for a year and a half. What we have done is reform in improving the organization, human resources and carrying out our duties at OJK. There is a new law that is used as a reference; Law No. 4 of 2023 concerning Development and Strengthening of the Financial Sector (P2SK). Six months before the law was issued, we had carried out an overhaul so that the OJK's function was truly felt in the context of maintaining financial system stability and in other tasks such as consumer protection and public education. We made these changes simultaneously.

Specifically for your duties as Head of OJK Banking Supervision, what have you done?

The banking sector is the largest sector in our financial services. Indonesia's economy is often called a bank driven economy, meaning that our economy is driven more by the banking sector. Our banking sector needs serious attention. This task is not easy to handle such a large sector, almost 80% of the total existing financial services.

The steps that my team and I have taken are to review almost all laws and regulations related to the banking sector, in order to strengthen institutions and banking supervision processes. Including BPRs, previously People's Credit Banks have now become People's Economic Banks after the presence of Law No. 4 of 2023 concerning P2SK as well as Sharia Banks and Regional Development Banks. We have issued many regulations, and we have improved our monitoring processes to ensure that the implementation of our duties is effective.

Even though there is LPS (Deposit Insurance Agency), this means that if something happens to the bank, people don't need to worry. Those who have funds of up to 2 billion are covered by LPS. But that is not what is actually wanted, namely ensuring that the operating bank does not have problems. Our supervisors must truly understand the performance of the banks they supervise. When there are signs of risk, it can be quickly addressed.

Why do banks have to be monitored so closely when other business sectors are not?

Because the bank is an intermediation institution, the bank operates using public funds. As a regulator we reflect the protection of society in general. That is the philosophy why banks must be monitored so closely.

We have done many things, such as using new regulations and enhanced regulations. One example is that recently world banking was hit by disruptions such as in America and Europe. Thank God, Indonesia is safe and protected. There are disruptions due to the war between Ukraine and Russia, we could also be in a very good position. We do experience cyber attacks, but they are limited. In other countries the attacks are bigger. This means that we have carried out our duties well, which is reflected in the generally good banking performance and our financial system is also good.

So far, what obstacles have you experienced in realizing OJK's vision and mission?

There will definitely be obstacles, after the P2SK Law we were given the authority to develop and strengthen it. This law gives us a greater mandate to do everything deemed necessary in the context of how to maintain, develop and strengthen the financial system.

For example, the growth of sharia banks is still 7%, even including the conversion of BPDs into sharia banks. Likewise, our BPR is given the authority to consolidate and revitalize BPR. This is important, there are 1,600 BPRs throughout Indonesia. Through the P2SK Law, BPRs receive incentives, they can participate in the payment system, they can participate in listing on the capital market. Well, we can't just let BPRs just list on the capital market because we care about consumer protection. Good BPRs must be strengthened, problematic ones selected, and if necessary closed.

No selective logging for prosecution?

None, one of the principles in the context of regulation and supervision is that there must be no discrimination. Everyone is treated the same.

A Bank Indonesia survey revealed that growth in credit distribution to the public increased in Q3 2023, what are your predictions for Q1 2024?

Based on November data, our credit growth was 9.7%, if we compare it to before COVID-19, that position is already normal. My prediction is that in Q1 2024, credit growth will still be in a good position. If our economic growth is still in the 5% range it will be even more supportive. If our credit growth can be more aggressive at around 10% and above, this will help the economy.

The ratio of bad loans or non-performing loans (NPL) has increased, OJK recorded gross NPL and net NPL in the July 2023 period at 2.51% and 0.80% respectively. What is the NPL figure for Q4 2023?

In general, in every business there are bottlenecks. However, we have to look at the bank's overall ratio, is it still within tolerance limits or not? Our NPL is still far from the maximum limit (3%). This means that banks can still control the risks arising from bad credit. Banks have ways to deal with bad credit, including restructuring, rescheduling and so on.

When providing credit, each bank will apply the 5C principles, namely character, capacity, capital, collateral and condition of the debtor. When the credit analysis is in motion and the collateral is sufficient, I think there is nothing to worry about. So overall there are no issues regarding bad credit, everything is still normal.

OJK issued a regulation, a person can only borrow 3 loans, is this still valid? What is OJK doing to curb illegal lending?

We have done a lot in the regulatory context. Then there is also consumer protection, which also controls whether the advertisements are legal or illegal. In essence, the main purpose of the loan is to provide space for the public to more easily access loans. Indeed, there are excesses from the presence of this pinjol that we must control. If it's illegal, just clear it.

For legal loans, our approach is how their presence is beneficial to society and the loan industry can grow. What we don't want is that these loans set very high interest rates like the practices of loan sharks. If you charge, you have to be ethical, because this is what makes you stressed. So the interests of industry and society are both protected. The limit that a person can only borrow from 3 loans still applies. In the future, we hope that people will become more educated, they will have to measure their abilities. If you feel you can't pay it back, don't borrow it.

Pinjol is now head to head with pay later in marketing credit to the public, what are the rules so that there is healthy competition, is there any reference to this?

We actually encourage healthy competition. Banks are expected to take the lead on this matter. When banks enter the realm of pay later, they provide access to the public to obtain funds, the banks themselves can serve various community needs, not only for investment but also consumption needs. As long as the competition is healthy, the people who benefit are the people.

Is there still great interest from foreign investors to invest in the Indonesian banking sector?

Before investing their capital, they will usually pay attention to the economic conditions in a country. They will look at our macro conditions, look at our economic potential. Next to China and India, our economic growth is among the highest. Meanwhile in countries other than that, growth is small, meaning growth for business is also limited. If that's the case, they will look for other more promising investment places, that's the law of economics.

In Indonesia, which is open, it is not only the banking sector, it is also extensive in the non-banking sector, also in the real sector. And now that the world is connected, there are no longer any limits to investing, to any country you can. Even though many foreign investors are interested, the investment is still not as big as domestic banks. The amount of foreign investment is still below 20%.

In this political year, what is your estimate for our economic growth?

Elections are hot not only in Indonesia, in other countries too. Remember, this is not the only time we are holding an election. Our economic fundamentals are quite strong, so whoever wins the presidential election will not be able to escape from the corridor, meaning it must be based on the constitution and existing regulations in implementing the financial services sector. In my opinion, our country's infrastructure is strong enough to deal with the turmoil that has occurred due to increased political activity this year. Hopefully the growth trend will continue.

Dian Ediana Rae, Between Business and Hobby

There must be a balance between being busy at the office and other activities such as sports and hobbies. With that balance, said Dr. Dian Ediana Rae, SH, LL.M, who now holds the position of Chief Executive of OJK Banking Supervision, can all work together, complement and support each other.

One of the activities he always does is sports. “I regularly play ping pong every Tuesday and Friday for more than an hour. Outside of the day I jog or jog around the house or, if the weather doesn't cooperate, stay indoors on the treadmill. So exercise is very important to maintain muscle elasticity and fitness," said the man who was born on April 4 1960.

When it comes to eating, this is a bit crucial. "The problem is that one is a culinary connoisseur. Wherever I work outside the city or abroad. This culinary business is never overlooked. There is something missing if I don't enjoy the typical culinary delights of the areas I visit. Just because I'm a senior, I can't be careless. If you've stopped enough, don't forget yourself," he continued.

Because her two children are adults and independent, now Dian lives alone with his beloved wife at home. "Yes, that's life, before the children lived with us, now that they are adults they have their own lives, are independent and have families. Finally, we are back to the way we were when we first got married," he said.

What made Dian and his wife happy was that at the weekend their son visited with his family. “On weekends I play with my grandchildren. Other times we eat together or go out of town. Even though it doesn't take long, the important thing is quality time," said Dian.

Driving Car as Hobby

When his children and grandchildren couldn't visit, he and his wife went out together. “Usually we go to Bandung or other cities on the island of Java. It also channels my hobby of driving. On weekdays I go to the office with a driver, when I travel with my wife or children and grandchildren I drive myself," said Dian Ediana Rae, who enjoys traveling without a driver.

So weekends are holiday time for drivers who from Monday to Friday are tasked with taking Dian here and there on office business. The thing is, he prefers to drive himself while pursuing his hobby rather than being driven by a private driver.

Even though he is now over the age of six, he feels that he has never had any problems with driving, he can even drive long routes such as to the tip of Java. "Thank God, I don't have any problems driving, the important thing is that the vehicle is roadworthy. Moreover, now the roads are good," said Dian.

For Dian, traffic jams on the road are also not a big problem. “In fact, when I face traffic jams on busy roads, I can train my reflexes. When the roads are empty, driving 120km/hour to 140km/hour is normal for me," he said, who usually travels from Jakarta to Bandung in 2 hours when traffic is smooth.

Tips on Relieving Stress

Dian has an easy and cheap way to relieve stress from routine work. Apart from exercising, he has a hobby of gardening and keeping fish. "When I'm in the garden, I can spend hours at the weekend, and it doesn't even feel like it's already dusk. And that really allows me to release stress from the work at hand," said the man who has a garden in the Bandung area.

The problem is, Dian continued, when he was in the garden, she really didn't think about the work that was piling up in Jakarta. "When I'm in the garden I really enjoy it. After caring for the plants, continue feeding the fish. It really refreshes the mind. So when we returned to our activities in Jakarta on Monday, we were very fresh," he said.

So when you come home from Bandung, said Dian Ediana Rae, your mood and mind will be more relaxed. That's the balance between activities at the office and busyness with the family, exercising and gardening. "Hobbies don't need to be expensive, the important thing is that they match our passion," he said, ending the conversation.

"Elections are hot not only in Indonesia, in other countries too. Remember, we are not holding elections just this once. Our economic fundamentals are quite strong, so whoever wins the presidential election will not be able to escape from the corridor, meaning it must be based on the constitution and existing regulations in implementing the financial services sector. In my opinion, our country's infrastructure is strong enough to face the turmoil that will occur due to increased political activity in 2024,"