OJK Records BPR With Core Capital Above IDR 6 Billion Reaches 1,190

Rupiah illustration (Photo: dock. Antara)

JAKARTA - The Financial Services Authority (OJK) stated that the number of People's Economy Banks (BPR) that have core capital above Rp6 billion has increased from the previous 1,076 to 1,190 BPR.

OJK Banking Supervision Chief Executive Dian Ediana Rae said that in the midst of the tough economic challenges to the financial services industry, the BPR industry can still grow throughout 2023.

"This growth is reflected in the increase in total assets, lending, and raising funds of 7.52 percent, 9.57 percent, and 8.63 percent, respectively," he explained in his statement Wednesday, February 28.

Dian said that his party continues to be committed to continuing to uphold the integrity of the financial system in order to nourish the banking industry, especially the BPR in accordance with the Financial Sector Development and Strengthening Law (P2SK).

The OJK continues to make various efforts to strengthen and consolidate the BPR. According to him, the number of BPRs throughout 2023 decreased by 33 BPRs, most of which were caused by the merger or merger with other BPRs, or in one ownership group in order to strengthen capital.

"Although in terms of reduced BPR quantities, the total number of offices is not much different considering that in the merger or merger, respective branch offices are generally branch offices from BPR that carry out mergers or mergers," he said.

According to Dian, the P2SK Law provides reinforcement to BPRs that were not owned by the previous BPR. Consequently, OJK needs to make adjustments in regulations and the supervision system for BPRs properly.

"This adjustment is not easy and OJK is in a very supportive position to make all BPRs a bank that can be relied on by the public, reliable, efficient and continues to increase its contribution to the economy," he said.

For this reason, in the near future the OJK will launch a Roadmap for BPR Development and Strengthening, as a series of several regulations that have been issued in 2023 and will continue with the issuance of other new regulations in 2024.

Dian conveyed that OJK is optimistic that BPR can face challenges that will develop in 2024, such as through the political year and the normalization of post-Covid-19 restructuring policies.

"OJK also ensures that all BPRs are in good health and meet the capital ratio and other BPR individual performance indicators," he said.

Dian said that for problematic BPRs, OJK encourages improvements in health levels through various supervisory measures according to the provisions. However, for BPRs who have integrity problems such as fraud or other basic governance violations, OJK will resolve it by closing the BPR if the condition continues to deteriorate and hand it over to LPS.

In addition, the OJK also punished the elements involved in fraud and other basic violations by handing over to law enforcement officials.

"This step by OJK is taken to uphold banking integrity by cleaning parasites from our banking system, so that public trust is maintained and does not interfere with the reputation of other BPRs that have been performing well and have contributed to the economy, especially in mobilizing MSMEs in the regions," he explained.

Dian hopes that in the future the BPR operating will be a healthy, strong BPR and able to carry out its intermediation function properly and continue to prioritize the protection aspect of customers.

The P2SK Law, which was issued in January 2023, only gave OJK a one-year deadline to complete bank restructuring, including BPR. If it exceeds the time limit, the unhealthy BPR must be handed over to LPS according to the mandate of the P2SK Law.

"The public does not need to worry about the funds because they are guaranteed by LPS, and the completion of payments by LPS so far has been running fast and effectively," he said.

Dian conveyed that the OJK hopes that with efforts to hand over the remnants of the BPR which have fundamental problems to LPS for resolution this year, the BPR industry will enter a new era of BPR which is healthier, more competitive, and contribute optimally to the national economy through BPR credit expansion to the MSME sector.