Is It True That OJK's Policy Has Been Able To Save The Banking Sector?

Illustration. (Angga Nugraha / VOI)

JAKARTA - The corona virus pandemic or COVID-19 has hit almost all business sectors in the country, one of which is in the banking sector. The Financial Services Authority (OJK), through its policy, is considered capable of supporting the business world and the financial sector amid the COVID-19 pandemic.

These policies are included in the Financial Services Authority Regulation (POJK) Number 11 / POJK.03 / 2020 concerning Economic Stimulus in the banking industry and POJK Number 14 / POJK.05 / 2020 concerning the Countercyclical Policy on the Impact of the Spread of Coronavirus Disease 2019 for Non-Bank Financial Services Institutions. .

PT Bank Danamon Tbk economist Wisnu Wardhana said the OJK policy was very helpful for the banking sector, especially regarding credit restructuring for customers affected by COVID-19.

"Both help maintain liquidity, both in the financial sector and debtors. So that the stability of Indonesia's financial system as a whole is also maintained," said Wisnu in a written statement quoted on Saturday, May 16.

Wisnu added that this relatively new policy has had a positive impact on the financial sector, although the percentage of debtors who use the facility is only around 5 percent of the target. However, he continued, it should be remembered that the age of this relaxation rule is still relatively new, so the 5 percent figure is considered quite effective.

Overall, he continued, the policies issued by the OJK coupled with fiscal and monetary policies were deemed able to calm the financial market.

"In particular, concerns about liquidity risk in banks," he said.

Core Indonesia Research Director Piter Abdullah also assessed that the focus of OJK's policies could complement the policies issued by the government and Bank Indonesia (BI).

"With this policy, OJK will help strengthen the resilience of the business world, as well as the financial sector in the face of the COVID-19 outbreak. During the COVID-19 outbreak, the business world and financial institutions, especially banks, are experiencing liquidity pressure," he explained.

Piter assessed that the relaxation of credit restructuring is able to help the business world, which in turn also strengthens banking. However, he admits that credit restructuring alone is not enough for some business actors. For this reason, other policies from the government and the central bank are needed that can strengthen the business world.

"Indeed, for several companies whose liquidity problems are so great, credit restructuring is not enough, it needs other assistance. But the policy direction is correct," explained Piter.

Currently, there are at least four main policies that have been issued by the OJK during the current pandemic. First, policies to reduce volatility in financial markets in order to maintain investor confidence and market stabilization, and provide breath for the real and informal sectors to survive the pandemic through relaxation of credit restructuring.

Second, relaxation for the financial services industry so that it does not need to create additional reserves for bad credit losses due to the impact of COVID-19. Third, adequate liquidity space to support bank liquidity needs.

Fourth, a more effective and faster resolution of supervision of the financial services industry through Cease and Desist Orders and other Supervisory actions / resolutions.