Central Bank Independence Threatened Because Of The BI Bill

Bank Indonesia Building. (Angga Nugraha / VOI)

JAKARTA - The Legislative Body (Baleg) of the DPR is proposing a revision of Law Number 23 of 1999 concerning Bank Indonesia (BI). This central bank institutional regulation has been amended twice. In this amendment, several articles were amended, added and deleted.

First, carried out through Law 3 of 2004, under the leadership of President Megawati Soekarnoputri. Second, through Law 6 of 2009 concerning Stipulation of Government Regulations in Lieu of Law (Perppu) Number 2 of 2008. This second legal basis was established in the era of President Susilo Bambang Yudhoyono (SBY).

Law Number 23 Year 1999 was born from Law Number 11 Year 1953 concerning the Establishment of the BI Basic Law which stipulated BI as the replacement for De Javasche Bank NV The regulation was born under the leadership of President Soekarno.

Subsequently, the government revised the regulation into Law Number 13 Year 1968. The principle difference in the rules that were born in the era of President Soeharto, namely that BI was prohibited from conducting commercial types of bank business.

The independence of BI is in danger of being lost. This is reflected in the provisions of Article 9 which were abolished and in this Bill also added an article regarding the authority of the monetary council in the second amendment to Law Number 23 Year 1999.

The provisions of Article 9 read:

"Other parties are prohibited from interfering in any form of interference in the implementation of BI's duties. BI is required to reject and / or ignore all forms of interference from any party in the framework of carrying out its duties".

"The provisions of Article 9 are deleted. Between Article 9 and Article 10 are inserted 3 (three) articles, namely Article 9A, Article 9B, and Article 9C," said the regulation, quoted by VOI, Wednesday, September 2.

Article 9A contains 5 paragraphs, namely:

(1) The Monetary Board assists the Government and BI in planning and stipulating monetary policy as referred to in Article 7.

(2) The Monetary Council shall lead, coordinate and direct monetary policy in line with the Government's general economic policies.

(3) The Monetary Council consists of 5 (five) members, namely the Minister of Finance and 1 (one) minister in charge of the economy; BI Governor and BI Senior Deputy Governor; as well as the Chairman of the Board of Commissioners of the Financial Services Authority.

(4) If deemed necessary, the Government may add several ministers as advisory members to the Monetary Board.

(5) The Secretariat of the Monetary Board is administered by BI.

Article 9B contains 3 paragraphs, namely:

(1) The Monetary Board is chaired by the Minister of Finance.

(2) The Monetary Council shall meet at least 2 (two) times a month or according to urgent needs.

(3) In discussions of a technical nature, members of the Monetary Board have the right to appoint expert advisors who can attend the Monetary Council sessions.

Then, Article 9C reads:

(1) Decisions of the Monetary Board are adopted by deliberation to reach consensus.

(2) If the Governor is unable to agree on the results of the deliberations by the Monetary Board, the Governor may submit his opinion to the Government.

(3) The rules and procedures for carrying out the work of the Monetary Board shall be determined by the Monetary Board.