T

he House of Representatives has approved the 2016 budget proposed by the Financial Services Authority (OJK), including stipulations that it will no longer use state funds as fees collected from financial companies will be enough to support the agency'€™s activities.

During a hearing on Wednesday, House Commission XI approved the OJK'€™s Rp 3.93 trillion (US$281 million) budget proposal for 2016, a 9.8 percent increase from this year'€™s allocation of Rp 3.58 trillion.

The hearing session, attended by 31 lawmakers from 10 factions, was the conclusion of prolonged discussions of two committees, which have been reviewing the proposal'€™s revenues and expenses since June.

The chairman of House Commission XI overseeing banking and finance, Fadel Muhammad, said the commission had approved the budget with notification.

'€œThe OJK is expected to arrange a roadmap of its procurement plan of building ownership with existing funds and maintaining efficiency by prioritizing urgent needs,'€ Fadel said during the session.

The Commission XI also gave its approval for Bank Indonesia (BI) to continue paying remuneration for its staff who have been appointed to the OJK'€™s banking supervision department since the agency'€™s establishment in 2011.

The OJK also obtained the commission'€™s approval for its plan to establish a pension fund foundation and an employee welfare foundation.

As opposed to the 2015 budget, funds for next year will be completely generated from the OJK'€™s fee-collection scheme currently imposed on the financial industry.

Last year, the agency began collecting annual fees from financial companies that it supervised. The amount of the fees varies depending on the size of companies'€™ assets.

Funds collected one year will be used to fund the body'€™s operations in the following year. In 2015, only part of the OJK'€™s operations was financed by the fees, while the rest was financed by the state budget.

However, the approved Rp 3.93 trillion for next year was higher than the previous Rp 3.8 trillion proposed by the agency in June due to the agency'€™s recalculation of administration costs due to its need to recruit more staff next year.

OJK chairman Muliaman D. Hadad said that the need to recruit more staff next year was part of the agency'€™s backup plan if a significant number of BI staff decided to return to their previous institution by the end of the year.

The OJK has already completed its second survey of all BI staff working for the agency in order to ascertain whether they would choose to return or stay as the final decision will be taken before the end of this year.

'€œWe are taking measures to make them stay, such as by establishing a pension fund foundation and an employee welfare foundation. However, we are ready to recruit new staff if needed next year,'€ he said.

Gus Irawan Pasaribu, chairman of Commission XI'€™s committee for OJK revenue, said lawmakers in the commission expected that BI staff working for the agency would stay as they had competency in banking supervision, which was more compatible with OJK'€™s mandate.