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Bullion bank to launch in first half of next year, Airlangga says
The Financial Services Authority (OJK) and the government plan to gradually build a complete gold investment ecosystem, including a national gold council and hallmarking to ensure product authenticity.
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Coordinating Economic Minister Airlangga Hartarto speaks to The Jakarta Post about the Indonesian economy in his Jakarta office on Sept. 30, 2024. (Office of Coordinating Economic Minister/-)
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ndonesia is set to establish its first bullion bank early next year, Coordinating Economic Minister Airlangga Hartarto said on Tuesday.
He added that the institution’s creation follows the enactment of Law No. 4/2023 on financial sector development and strengthening (P2SK).
Airlangga previously suggested that state-owned lenders like Bank Syariah Indonesia (BSI) and Bank Rakyat Indonesia (BRI), through its pawnshop subsidiary Pegadaian, could form the country’s first bullion bank.
“In the past, we only stored gold reserves in vaults and recorded their tonnage, not their value. Banks in countries like Singapore, however, include the value of gold in their financial statements,” Airlangga noted on Monday, as quoted by Bisnis.
A bullion bank operates similarly to a conventional bank but focuses on gold rather than cash. It collects gold deposits from individuals and then lends or trades the metal with other parties.
In October, the Financial Services Authority (OJK) issued Regulation No. 17/2024, outlining the requirements for establishing a bullion bank, including minimum core capital of Rp 14 trillion (US$880 million). Regional banks and microfinance institutions are excluded from offering bullion services.
Maman Firmansyah, director of multifinance and venture capital monitoring at the OJK, revealed that the government was drafting a presidential regulation to complement the OJK’s regulation on bullion banks.
