T

he Financial Services Authority (OJK) is currently building a system that will integrate the licensing process for companies wishing to operate either in banking, capital markets or the financial sector. In so doing, the OJK hopes to increase efficiency in financial markets.

OJK director of banking licenses Ahmad Berlian said the new system, expected to be ready by the end of this year, would receive license-related documents from and to those three sectors through a '€œsingle window'€.

The OJK is currently discussing with industry players how to most effectively implement the new system.

'€œWe will build an integrated system and an IT-based single window that will serve activities related to permits in banking, capital markets and the financial sector,'€ Ahmad said at a press gathering in Bogor, West Java, on Saturday.

Ahmad said the legal basis for the '€œsingle window'€ system linked back to the agency'€™s mandate to create an integrated supervision process in the overall financial sector as stipulated in Article 5 of the law on the OJK.

Through the system, all proposals for acquisitions, expansions and new management in banking, capital markets and the financial sector can be submitted to the OJK'€™s licensing department.

According to Ahmad, the new system will help the OJK cut bureaucratic red tape in permits issuance, which often takes long time if a proposal needs cross-sector approval, either in banking, capital markets or financial departments.

In the past, when banking supervision was under the purview of Bank Indonesia (BI), a bank wishing to start a custody business in the capital market had to submit its proposal to the central bank first and then extend the process to the Capital Market and Financial Services Supervisory Agency (Bapepam-LK).

'€œNow, banking and capital market supervision is under one roof, so that investors, shareholders and bank executives who want to apply for a permit will only need to come to a unit under the OJK,'€ he said.

In addition to efficiency, Ahmad said the system would also help the OJK enhance its cross-sector supervision because it would accelerate the process of administrative analysis and data-checking for permit proposals and fit-and-proper tests for industry management.

Ahmad said the cross-sector data checking process was necessary to ensure that prospective management and shareholders of banks and financial firms exerted integrity and competency.

The OJK law mandates that the agency uphold consumer protection. Therefore, the integrity of banks and financial firms is something that the OJK must guarantee.

According to OJK'€™s data, fit-and-proper tests for management is one of the busiest functions of the the agency'€™s licensing department. 216 tests were held as of the third quarter of this year. Last year, the agency held 284 fit-and-proper tests.

The data-checking process will be further enhanced as the OJK also has a list of people who failed fit-and-proper tests as well as those who have been implicated in legal cases.

'€œFor example, we will have an integrated database on all executives, such as the board of directors and commissioners as well as shareholders across banks, capital markets and the financial sector. We can thus analyze these things in shorter time-frame,'€ Ahmad said.
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