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View all search resultsOJK pushes banks to align business plan with govt’s priority agenda
While the revision is seen as a potentially effective measure to bolster inclusive funding, experts warn that it may distort Indonesia’s banking industry focus from commercial lending to national development.
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Oversight body: The Financial Services Authority (OJK) is facing mounting calls for it to require financial institutions to report implementation of their respect for human rights. (Kontan/Baihaki)
T
he Financial Services Authority (OJK) is revising its regulation on bank business plans (RBB), including a provision for banks to align credit disbursements with the government’s priority agenda.
While the revision is seen as a potentially effective measure to bolster inclusive funding, experts warn that it may distort Indonesia’s banking industry focus from commercial lending to national development.
According to the draft regulation released on the authority’s website, banks are required to issue loans to support the government’s agenda, such as the housing and energy self-sufficiency programs.
The draft also emphasizes lending push for the micro, small and medium enterprises (MSME) sector, which has recorded contraction over the past few months.
If implemented, it will amend OJK Regulation (POJK) No. 5/2016 on RBB that generally allows banks to create plans based on their own strategies while considering both internal and external factors.
The OJK is currently led by Friderica Widyasari Dewi, who assumed the role permanently in March following a leadership shake-up sparked by the stock market plunge in January. The downturn, triggered by a warning from global index provider MSCI, prompted previous chairperson, seasoned bureaucrat Mahendra Siregar, and other OJK commissioners to step down.
Friderica has been openly supportive of the administration’s agenda, repeatedly stressing her commitment to expand financing for the government’s priority programs.
