OJK Boss Wimbih Santoso Outspoken, Sources Of Bank Funds Will Change In Financial Sector Law Reform

Illustration (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) said that one of the focuses of financial sector reform is how to strengthen the bank's funding structure.

Chairman of the OJK Board of Commissioners, Wimboh Santoso, said that the strategic step was taken to adjust the national banking conditions to the current business situation.

“The existing banks are actually commercial banks. So this commercial bank is a short-term source of funds, such as savings. But we see the latest situation where commercial banks have to be able to enter investment products, they are pulled into that arena where the risk is quite large," said Wimboh during a virtual discussion on Friday, February 11.

For information, currently the main source of banking liquidity in the country still relies on third party funds (DPK) consisting of savings, time deposits and demand deposits.

Furthermore, the Chairman of OJK explained that the current regulatory reference is considered to be quite outdated because it came from the formation three decades ago.

“Our banking law, which dates back to 1992, needs to be reformed. The spirit of this law is to purify the special products sold by banks and it is very clear what can be done," he said.

Therefore, Wimboh fully supports the major steps taken by the government and the DPR in carrying out financial sector reform through the Draft Law on Development and Strengthening of the Financial Sector (RUU P2SK).

Moreover, he continued, many business entities are now growing and developing by eroding the banking market share. Meanwhile, the bank itself has difficulty working on certain potential segments due to limited space due to the constitutional mandate.

“On the other hand, we see that many lives are currently developing and these digital products are needed by the community. For that, we want all in the financial sector to be able to deal with this situation," said Wimboh.