Strengthening Community Fund Protection, LPS Collaborates With MA

Photo: Doc. Antara

JAKARTA - The Deposit Insurance Corporation (LPS) and the Supreme Court (MA) have collaborated to strengthen the protection of public funds in banks and insurance companies in Indonesia in anticipating the implementation of the insurance policy guarantee program.

This collaboration was implemented by the two institutions through the signing of a memorandum of understanding which aims to further strengthen cooperation and institutional relations that have been running well so far, including to improve coordination in an effort to maintain financial system stability and provide legal certainty.

"This collaboration will open up space to exchange information, overcome various existing legal and regulatory challenges, and create more effective mechanisms in carrying out their respective duties and functions. Of course, the cooperation must run with respect to the independence values of each institution," said Chairman of the LPS Board of Commissioners Purbaya Yudhi Sadive in Jakarta, quoted from Antara, Friday, September 20.

The scope of the memorandum of understanding includes, among other things, strengthening and developing the law related to guarantees and protection of public funds placed in banks as well as insurance companies and sharia insurance companies.

The memorandum of understanding also includes increasing the capacity and competence of human resources as well as providing, exchanging, and utilizing data and information, as well as other areas of cooperation agreed by LPS and MA as long as it does not conflict with statutory provisions.

"Hopefully this memorandum of understanding will be the first step of various collaborative activities and productive initiatives, which will bring success and progress to the development of laws and financial systems in Indonesia," said Purbaya.

In accordance with the mandate of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UUP2SK), LPS is mandated to run the Insurance Policy Guarantee Program. LPS will start effectively carrying out the new mandate no later than 5 years after the P2SK Law is enacted.

Meanwhile, Chairman of the Supreme Court of the Republic of Indonesia Muhammad Syarifuddin said, with the implementation of the memorandum of understanding, his party would cooperate even more intensely with LPS.

"Later on, we will coordinate according to our respective duties and authorities, which have a slice between LPS and us that we need to arrange together. Now it is running, for example we are designing a draft Supreme Court Regulation which will later be discussed with the LPS, then the public is tested both by practitioners and academics, and will finally be brought back to the Supreme Court," he said.

Currently, LPS and the Supreme Court through the Joint Pokja Team are drafting a Supreme Court Regulation (Raperma), concerning Procedures for Completing Bank Disputes and Insurance Companies in the Process of Liquidation of Commercial Courts. The Raperm is a provision that complements the provisions in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector.

LPS sees an urgency to make further arrangements, especially regarding the authority to adjudicate disputes related to LPS by the judiciary under the Supreme Court of the Republic of Indonesia.

In addition, the joint Working Group is a form of concrete collaboration as a form of the commitment of the two institutions to contribute to the progress of the justice system and strengthening the LPS resolution function.