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Prabowo inaugurates Indonesia’s first bullion bank
President Prabowo Subianto inaugurated Indonesia’s first-ever bullion bank in a ceremony on Wednesday at The Gade Tower in Central Jakarta.
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President Prabowo Subianto inaugurates the country’s first bullion banking service on Wednesday in a bid to capture more value from its vast gold reserves and accelerate growth. Indonesia is home to the world’s sixth-largest gold reserves but sees much of its mined gold stored overseas. (Courtesy of/Presidential Secretariat)
P
resident Prabowo Subianto inaugurated Indonesia’s first-ever bullion bank in a ceremony on Wednesday afternoon at The Gade Tower on Jl. Kramat Raya in Central Jakarta.
The inauguration was carried out after the Financial Services Authority (OJK) issued licenses to state-owned sharia lender Bank Syariah Indonesia (BSI) and state-owned pawnshop Perum Pegadaian to enter the bullion business.
Pegadaian received the license on Dec. 23, 2024, followed by BSI on Feb. 12 of this year, kompas.com reported on Wednesday.
The ceremony included the insertion of gold bars into a treasure box.
The new bullion bank service is part of Prabowo's efforts to strengthen the national gold industry. It also aligns with the downstream mission outlined in the administration’s Asta Cita (Eight Aspirations).
The idea of establishing a bullion bank had been discussed for years, dating back to Joko “Jokowi” Widodo’s presidency.
In 2022, Coordinating Economic Minister Airlangga Hartarto said such a bank urgently needed to be formed, a sentiment echoed by several other economic ministers.
Airlangga said that establishing a bullion bank was crucial to prevent the industry from storing domestically mined gold in international bullion banks in Singapore.
"Most of it is currently sent to Singapore and then re-imported to Indonesia, making nearly the entire jewelry industry incur costs only in the form of tolling fees," Airlangga said in February 2022, as quoted by kompas.com.
In 2024, State-Owned Enterprises Minister Erick Thohir said the bullion bank would expand the domestic gold production ecosystem.
Indonesia holds the world's sixth-largest gold reserves, estimated at around 2,600 tonnes.
The establishment of the bullion bank follows the government's official merger of state firms to create an ultra-micro financing holding, which includes state-owned lender Bank Rakyat Indonesia as the holding entity with state-owned microfinancing firm PT Permodalan Nasional Madani (PNM) and Pegadaian as the subsidiaries.
