These 3 Things Make OJK 'horrible' In The Midst Of Maintained Claims In The Financial Services Sector

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The Financial Services Authority (OJK) claims that financial system stability is still maintained, as indicated by the improvement in the domestic intermediation function amidst the ongoing recovery of the national economy. This was conveyed by the Deputy Commissioner for Strategic Management of OJK Logistics Anto Prabowo in today's periodic report.

Although in general the national financial industry is quite good, Anto believes that several things must be watched out for in order to avoid a deeper shock.

"Global developments still need to be observed, especially the trend of increasing inflation due to the spread of the delta variant, tightening global monetary policy which is faster than the initial estimate, as well as the impact of tightening regulations in China," he said in writing, Thursday, September 30.

In his elaboration, Anto said that a number of real sector indicators in the country were observed to be starting to show indications of improvement as new cases of COVID-19 slowed down with the acceleration of the vaccination program.

In detail, until September 24, 2021, the JCI was recorded to have weakened by 0.1 percent month-to-date to the level of 6,145. Nevertheless, the flow of non-resident funds was still recorded as an inflow of IDR 5.4 trillion mtd.

In the banking sector, credit in August 2021 was recorded to grow by 1.16 percent year-on-year or 1.9 percent year-to-date.

Banks are also said to have contributed to the recovery of the national economy by continuing to lower the basic lending rate (SDBK) to a fairly competitive level, including the working capital loan interest rate, which has fallen below the 9.0 percent level to 8.92 percent.

Meanwhile, the insurance industry recorded a collection of insurance premiums in August 2021 of IDR 20.9 trillion, with details of life insurance of IDR 13.6 trillion, general insurance and reinsurance of IDR 7.3 trillion.

Then for Fintech peer-to-peer lending in August 2021, it recorded outstanding financing of Rp. 26.09 trillion or grew by 115.1 percent year-on-year.

In the capital market, as of September 28, 2021, the number of public offerings made by issuers has reached 134, with a total value of fund raising reaching Rp264.5 trillion. Of the total public offerings, 37 of them were made by new issuers.

In the current pipeline, there are 73 issuers that will conduct public offerings with a total indication of offerings of IDR 35.72 trillion.

Meanwhile, the risk profile of financial services institutions in August 2021 was still relatively well maintained with a gross NPL ratio of 3.35 percent (net NPL: 1.08 percent).

Furthermore, liquidity is at an adequate level with a note that the ratio of liquid assets/non-core deposits and liquid assets/DPK as of August 2021 was monitored at the level of 149.72 percent and 32.67 percent, respectively, above the threshold of 50 percent and 10 percent.

Then, the capital of financial services institutions to date is maintained at an adequate level. The banking capital adequacy ratio was recorded at 24.41 percent.

Risk-Based Capital in the life insurance and general insurance industries was recorded at 633.6 percent and 336.8 percent, respectively. This figure is considered far above the regulatory threshold of 120 percent.

"OJK will continue to support government policies to encourage the business sector that has an impact on national economic recovery. In addition, we will also strengthen coordination with stakeholders in order to maintain financial system stability, especially in anticipating the risk of tapering in advanced economies," concluded Anto.