Get The Mandate To Be An Insurance Policy Guarantor, IDIC: New Challenges To Face

IDIC. (Photo: Doc. Antara)

JAKARTA - The Deposit Insurance Corporation (LSP) has a new challenge. The institution that guarantees public deposits in the banking system can be mandated to guarantee insurance policies.

Member of the LPS Board of Commissioners, Didik Madiyono, said that there is a possibility that the LPS function will be expanded to guarantee insurance policies.

"LPS will be given the trust or mandate to guarantee insurance policies, this is currently developing," said Didik in the webinar "Metamorphosis of the Role and Function of IDIC in Maintaining Financial Stability" quoted Antara, Friday, February 11.

The expansion of this function is one of the external challenges faced by IDIC for the 2022-2026 period.

Furthermore, IDIC must also adapt to banking digitalization, including how to guarantee banking transactions digitally.

IDICs also face challenges related to the implementation of bank resolutions due to the increasing complexity of bank resolutions with the digitalization trend, bank collaboration with non-bank institutions such as fintech, and bank consolidation plans.

In addition, other challenges related to bank resolutions are also due to the fact that most Rural Banks (BPR) do not yet have a core banking system.

"Currently LPS is also preparing legal standing or legal basis regarding funding options for banks through the Banking Restructuring Program," he added.

The economic condition which is still recovering from the impact of COVID-19 and the potential for geopolitical instability are also challenges for IDIC because both can affect the National Financial System Stability.

However, at this time, to strengthen the domestic financial system, the government is in the process of making the Omnibus Law for the financial sector in which IDIC is also in the process.