T

he board of commissioners of the Financial Service Authority (OJK) is now in place following an inauguration ceremony held on Friday, setting in motion the transfer of authority for monitoring and regulating the banking and financial sector.

The OJK commissioners who were inaugurated were Muliaman Darmansyah Hadad as head commissioner, Nurhaida, Firdaus Djaelani, Nelson Tampubolon, Rahmat Waluyanto, Ilya Avianti, Kusumaningtuti Soetiono, Halim Alamsyah and Anny Ratnawati.

Muliaman was previously one of the deputy governors of Bank Indonesia (BI).

Muliaman’s appointment to lead the OJK was made last month after the House of Representatives completed its fit and proper test for the commissioner posts.

The House also appointed six other commissioners. Two of nine commissioners — Halim and Anny — were directly appointed by their respective institutions, Bank Indonesia and the finance ministry, to become ex-officio representatives on the OJK commissioner board.

Finance Minister Agus Martowardojo, who was in charge of leading the OJK candidate selection committee, said that the first agenda for the newly inaugurated commissioners was an internal meeting to determine their respective posts.

The commissioner posts in the OJK consist of the head commissioner, directly given to Muliaman, the deputy head commissioner, the banking monitoring executive head, the stock market monitoring executive head, the insurance and other non-bank financial institution monitoring executive head, the audit board head and the consumer education and protection head.

The establishment of the OJK, a financial monitoring super body, is mandated by Law No. 21/2011 on the OJK.

The law, which was passed by the House of Representatives on Nov. 22, rules that the OJK will hold all monitoring authorities on financial services, previously held by the finance ministry’s Indonesian Capital Market and Financial Institutions Supervisory Agency (Bapepam LK) and BI.

The law also stipulates that the transition of all authorities from the finance ministry and Bapepam LK on monitoring the stock market, insurance, and other financial services to the OJK must be completed by Dec. 31, 2012.

As for BI’s monitoring authority, according to the law, the banking sector must shift reliance to the OJK by Dec. 31, 2013. BI will only focus on monetary policies after that date.

Indonesian Democratic Party of Struggle (PDI-P) legislator Arif Budimanta said that he hoped Muliaman would prove to be capable in his new role as head of the OJK.

“Internal consolidation will be the first task for the OJK commissioners, but after that, they will have to shift their focus to a larger task, which is on how to properly monitor the finance sector to mitigate the impacts of a global crisis on Indonesia,” Arif said.

“In addition, the OJK commissioners must also be able to prevent fraudulent practices in the financial sector. We do not want to have another scandal such as the Bank Century saga, in which the owners provided high risk financial products that are not supposed to be offered by banks,” he added.

Indonesian Public Insurance Association (AAUI) chairman Kornelius Simanjuntak said that stakeholders and players, including the insurance industry, had high expectations of the OJK commissioners.

“We hope the concept of putting all financial sector monitoring authorities under one roof will provide a positive impact on the future of the country’s financial industry,” Kornelius said.