OJK Strengthens Banking In Facing Global Economic Dynamics

Illustration. (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) issued regulations to strengthen Indonesia's banking industry in the face of macroeconomic and financial dynamics and anticipate the global geopolitical situation. This regulation is the Financial Services Authority Regulation Number 5 of 2024 concerning the Stipulation of the Supervision and Handling Status of Commercial Banks Problems (POJK 5/2024) in order to strengthen supervision and handling of banking problems. "This provision is important in anticipating a volatile global geopolitical situation that can disrupt the national economy and bank business activities," said OJK Banking Supervision Chief Executive Dian Ediana Rae in Jakarta, quoted from Antara, Monday 22 April.

The POJK also regulates coordination between institutions, and strengthens institutional authority in the financial sector, especially banking.

The POJK is expected to further encourage banks to support the national economy and maintain public trust. Dian hopes that with this POJK, the possibility of bank problems can be avoided or detected and resolved more quickly. "POJK 5/2024 is also expected to be a strong foundation for the Indonesian banking industry to quickly adapt to the complexity of macroeconomic and financial dynamics," he said. The issuance of POJK 5/2024 is an alignment and updating of provisions with Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK).

The arrangement in POJK 5/2024 contains four main provisions topics, namely the updating of mechanisms and coordination between institutions in determining systemic banks, the determination of bank surveillance status and actions, plans for recovery plans, and the establishment of Intermediate Banks in the context of bank resolution by the Deposit Insurance Corporation (LPS). This provision applies to all commercial banks, both conventional and sharia as well as branch offices from overseas banks.