SUMUT DISCUSSION CLUB III

by Bayu Angga Wijaya

SUMUT DISCUSSION CLUB III

OJK Needs to Encourage Strong Competitive Banking

In facing the ASEAN Economic Community (AEC), the Financial Services Authority (OJK) and Bank Indonesia (BI) need to encourage the formation of strong banks with strong competitiveness. This was conveyed in the Talk Show of the North Sumatra Discussion Club (SDC) held by Universitas Prima Indonesia (Unpri) and the RE Foundation with the theme "The Role of OJK and the Readiness of the North Sumatra Banking World in Facing the 2015 AEC", in the multipurpose room of the Royal Prima Hospital Medan, Thursday (8/27).

The SDC, moderated by Dr. RE Nainggolan, M.M., presented speakers from OJK Lukdir Gultom as Director of Supervision of Bank KR 5 Sumatera OJK, BI representative Budi Trisnanto, academics Prof. Polin Pospos, Kasim Siyo, Wahyu Ario Pratomo, representatives of banking, BPS, Pegadaian, Head of LPJK Murniati Pasaribu, Head of Inkindo Ricardo Manurung, and attended by Head of BPH Unpri DR Tommy Leonard, S.H., M.Kn., Rector Prof. Djacobus Tarigan, AAI., DAAK., Vice Rector I Seno Aji, S.Pd., M.Eng. Prac., and other deans, as well as invitees.

Academician from USU Wahyu Ario Pratomo said that in the MEA there will be challenges for OJK and banking in the country, both internal and external challenges. Internally, OJK is currently getting bigger, its duties and functions are also more complete. Initially, OJK was a merger between the banking supervision function of BI and the capital market-financial institution supervision function of Bapepam-LK. But now it has increased, regulating and supervising the banking industry, Non-Bank Financial Industry (IKNB) and Microfinance Institutions (LKM).

"The challenges that OJK supervises are very large and make this institution super. But can this run well? Of course, OJK must prepare reliable Human Resources (HR) so that it can carry out its functions properly," he said. In addition, OJK's operational costs will be even greater, which were initially borne by the government, in the future will be charged to the supervised financial industry. Of course, in this case the financial services industry does not want to lose and will charge these costs by increasing loan interest, and ultimately will be charged to the public.

The next challenge, the revocation of Government Regulation in Lieu of Law (Perppu) No. 4 of 2008 concerning the Financial System Safety Net (JPKS) has been agreed to be revoked. This will be very dangerous, when a financial crisis occurs that has a systemic impact, because no one is responsible.

"Moreover, currently the Rupiah has weakened to the level of 14,000 and is already worrying, of course the most affected are banks, because there are many obligations that must be met by banks in foreign currency (forex). This happened in 1998 when the economic crisis occurred which caused Bank Century to be bailed out," he said.

Wahyu said, if this is not anticipated immediately, it is feared that if there is a bank that fails to pay, this is dangerous. No one will be responsible. Who wants to be responsible, whether a particular bank wants to be saved or not. Although in the OJK Law there is a Financial System Stability Coordination Forum (FKSSK).

External challenges, in the MEA market, there will be a free flow of goods, services, investment and capital. Indonesian banks will compete with large banks from neighboring countries that can provide sources of banking financing with low interest rates such as from Singapore and Malaysia, while in Indonesia the loan financing is at high interest rates.

Therefore, OJK and BI need to encourage the formation of strong and competitive banking. In addition, supervision of banking and IKNB is important in maintaining the stability of the financial system. "The government must immediately design a blueprint for interbank consolidation. Especially to create banks with large assets in Indonesia," he said.

Meanwhile, Lukdir Gultom as Director of Bank Supervision KR 5 Sumatra OJK said, in carrying out its duties, OJK coordinates with Bank Indonesia in making supervisory regulations in the banking sector, including the obligation to fulfill minimum bank capital, integrated banking information systems, policies for receiving funds from abroad, receiving foreign exchange funds and foreign commercial loans, and so on.

Related to facing the MEA, OJK considers it important to support the integration of ASEAN banking in advancing a broader, more efficient and stable national banking business in the ASEAN region. So that OJK agreed to sign a heads of agreement in the framework of the journey towards the implementation of the Asean Banking Integration Framework (ABIF) in 2020.

According to him, ABIF for Indonesia is an opportunity and potential for Indonesian banking and business actors to expand to ASEAN market. In the future, there will be greater opportunities for Indonesian banking to gain market access and wider business activities in the ASEAN region, where QAB (Qualified ASEAN Bank) from Indonesia will receive the same treatment as local banks.