OJK: Banking Consolidation Is In Accordance With The Economic Claims

Illustration. (Photo: Doc. Antara)

JAKARTA - Chief Executive of Banking Supervision of the Financial Services Authority (OJK) Dian Ediana Rae said the continuation of banking consolidation would be carried out in accordance with economic demands.

Previously, OJK had consolidated banks by requiring banks to meet a minimum core capital of IDR 3 trillion by the end of 2022.

"In essence, consolidation is carried out not only because of policy needs, but because of economic demands, for example we are predicted to become the third or fifth largest country in the world, of course our financial services industry, especially banks, must respond to appropriate," he said at the Annual Financial Services Industry Meeting in Jakarta, quoted from Antara, Monday 6 February.

The minimum core capital policy of IDR 3 trillion was previously taken taking into account the need for credit expansion which is expected to grow to 12 percent on an annual basis in 2024.

In the future, the consolidation of commercial banks is unlikely to be carried out again in the near future, but the OJK is targeting the consolidation of the People's Credit Bank (BPR) to reduce the amount of BPR from 1,600 to 1,000 in the next five years.

"With the ratification of the Financial Sector Development and Strengthening Act (UU P2SK), BPR will also be allowed to participate in the payment system and participate in the listing in the capital market, but the BPR must meet certain requirements such as capital and total assets," he said.

OJK hopes that banks can accelerate economic growth to be higher than the current economic growth, including through lending to Micro, Small and Medium Enterprises (MSMEs) and to industrial sectors that downstream natural resource commodities.

"We are also concerned about dealing with cyber crime by building a collaborative information system to deal with crimes against banks, including through early detection of activities that abuse power," he said.