Press Release: The Financial Services Sector Stability Remained Resilient Amidst Global Economic Uncertainty

Mar 4 2024


SP 23/GKPB/OJK/III/2024​​




Jakarta, 4 March 2024. The Indonesian Financial Services Authority’s (OJK) Board of Commissioners’ monthly meeting on 28 February 2024 assessed​ that the stability of the national financial services sector remained maintained, supported by strong capital, adequate liquidity, and a positive risk profile.

In general, OJK assessed that present global economic performance was improving with stable pressure, although future global geopolitical developments still needed to be closely monitored.

In the United States, sticky inflation amidst solid economic growth led to increased estimates of no landing (in line with pre-pandemic). Such developments have triggered the market to estimate that the Fed Funds Rate (FFR) cut would have been further delayed, accompanied by a reduction in basis points.

Meanwhile, in Europe, the German and British economies contracted and began to enter a recession. Inflation started to fall closer to the central bank's target, prompting the Bank of England (BoE) and European Central Bank (ECB) to become less hawkish and ramp up opportunities for faster interest rate cuts.

In China, economic development trends exhibited below historic averages. Increasing pressure on financial markets was also observed. Going forward, uncertainty over China's economic recovery was predicted to remain high amidst the rising potential for a trade war.

Global geopolitical risks were observed to be increasing due to continuing conflict in the Middle East and the development of the war in Ukraine. The instability risk also had an impact on rising shipping costs and additional times from Asia to Europe, which potentially triggered an increase in future commodity prices.

In the domestic economy, GDP growth in Q4-23 was at 5.04 percent yoy (Q3-2023: 4.94 percent yoy), driven by increased consumption expenditure by non-profit institutions serving households (LNPRT) and government investment spending related to the development of the Nusantara Capital City. On an annual basis, economic growth was recorded growth by 5.05 percent yoy in 2023. The latest indicators also demonstrated that future economic performance would be positive, i.e., expansionary PMI in the manufacturing sector, a trade balance surplus, and a maintained inflation rate.

In order to support the Nusantara Capital City development (IKN), primarily in the development of the financial services ecosystem, OJK was committed to building a new office through a signing plan with the IKN Authority that was attended by the President of the Republic of Indonesia on 29 February 2024. On the same occasion, a series of groundbreakings for the development of financial services sector services in the Central Government Core Area (KIPP) were also carried out by Bank Mandiri, BRI, BNI, and BPD East Kalimantan and North Kalimantan (Bank Kaltimtara), as well as BPJS Kesehatan (Indonesia’s national social security agency for health insurance).

Developments in the Capital Market and Carbon Exchange (PMDK) 

The Indonesian stock market (JCI) as of 29 February 2024 was up by 0.60 percent ytd to 7,316.11 and posted a net buy of IDR18.44 trillion ytd. In February 2024, several sectors in the JCI were strengthened, including the infrastructure and the primary consumer goods sector. In terms of growth, the stock market capitalization as of 29 February 2024 was recorded at IDR11,687 trillion, or a slight increase of 0.11 percent on a YTD basis. In terms of transaction liquidity, the average stock market transaction value up to 29 February 2024, was recorded at IDR10.66 trillion ytd.

In the bond market, the Indonesian Composite Bond Index (ICBI) as of 29 February  2024 strengthened by 0.98 percent ytd to 378.28. On a year-to-date basis, SBN yields increased by an average of 3.20 bps across all tenors, with non-residents posting a net sell of IDR4.93 trillion ytd. In the corporate bond market, non-resident investors posted a net sell of IDR1.60 trillion ytd. 

In the mutual fund industry, the Asset Under Management (AUM) as of 29 February 2024 reached IDR824.40 trillion (down 0.04 percent ytd), with the Net Asset Value (NAV) of mutual funds recorded at IDR495.79 trillion, or moderated by 1.13 percent, a net redemption of IDR16.72 trillion.

The public’s enthusiasm for raising funds in the capital market was also positive, i.e., Public Offerings of IDR20.65 trillion with 12 new issuers recorded as of 29 February 2024. There were 84 Public Offerings in the pipeline with an estimated indicative value of IDR56.83 trillion, including 60 IPOs by new issuers.

In the fundraising through Securities Crowdfunding (SCF), as an alternative funding for SMEs, since the implementation of the SCF provisions until 29 February 2024, there were 16 licensed operators have received their licenses from OJK, with 512 debtors, 170,647 investors, and a total amount of IDR1.08 trillion raised funds.

Since the launch of the Indonesian Carbon Exchange on 26 September 2023 to 29 February 2024, there have been 50 licensed users with a total volume of 501,910 tCO2e and an accumulated value of IDR31.36 billion, i.e., 31.39 percent in the Regular Market, 9.69 percent in the Negotiation Market and 58.92 percent in the Auction Market. In the future, the potential for the Carbon Exchange is expected to continuously increase, considering that there were 3,453 licensed users registered in the National Registry System for Climate Change Control (SRN PPI) and the high potential of carbon units offered.

In regard to the enforcement of laws in the Capital Market sector:

1.In February 2024, OJK imposed: 

a. Administrative Sanctions in the form of Monetary Fines of IDR4,020,000,000.00 and/or Written Orders on 1 Investment Manager and 4 other parties who caused violations.

b. Administrative Sanctions in the form of Monetary Fines of IDR4,650,000,000.00 on 6 (six) Individuals and 1 (one) Suspension of the License of an Individual Securities Broker Representative related to violations of Article 91 and Article 92 of the Capital Market Law (UUPM) and 1 (one) Securities Company related to violations of number 7 letter c of Regulation Number V.D.3 that had been revoked and declared invalid and amended in Article 9 letter c POJK Number 50/POJK.04/2020 regarding not recording communications in a communication network that was connected to the Securities Dealer's communication systems related to the customer's orders and/or instruction.

2. In 2024, OJK imposed Administrative Sanctions in relation to examination cases in the Capital Market on 21 parties, consisting of Administrative Sanctions in the form of Monetary Fines of IDR11,970,000,000.00, 10 Written Orders, 1 Suspension of a License, and 1 Revocation of a License, and Administrative Sanctions due to late submission in the form of Monetary Fines of IDR14,663,480,000.00 on 164 financial businesses in the Capital Market, 25 Written Warnings on late submission of reports, and 2 Imposition of Administrative Sanctions in the form of written warnings of non-reports (Non Case).

3. Regarding information about the Jakarta State Administrative Court (PTUN) Decision with the case number 437/G/2023/PTUN.JKT and 438/G.2023/PTUN.JKT on 30 February 2023 that repealed the Administrative Sanctions in the form of Monetary Fines and Written Orders to PT Kresna Asset Management and Mr. Michael Steven, OJK was respectful to the PTUN decision. Further, OJK would take legal action to appeal in accordance with applicable regulations.

Developments in the Banking Sector (PBKN)

In line with improving global economic performance and stable pressures, the Indonesia banking industry’s performance as of January 2024 remained competitive and resilient, supported by relatively high levels of profitability (ROA) of 2.71 percent (December 2023: 2.74 percent) and NIM of 4.54 percent (December 2023: 4.81 percent). Banking capital (CAR) was relatively high at 27.54 percent (December 2023: 27.65 percent), providing a solid cushion for risk mitigation amidst global uncertainties.

As of January 2024, banking intermediation performance remained strong, recording double-digit credit growth of 11.83 percent (yoy) or IDR7,058 trillion. On a mtm basis, credit growth contracted by 0.46 percent, a decrease of IDR32.69 trillion, as a seasonal occurrence.

The growth was mainly contributed by Working Capital Loans at 12.26 percent yoy, while by bank ownership, State-Owned Banks were the largest contributors to credit growth, i.e., 14.44 percent yoy.

Third Party Funds (DPK) contracted on a monthly basis but grew positively on an annual basis. In January 2024, DPK recorded a contraction of 0.50 percent mtm yet increased by 5.80 percent yoy (December 2023: 3.73 percent yoy) or to IDR8,415 trillion, with demand deposits being the largest contributor to the growth, i.e., 8.17 percent yoy.

Banking industry liquidity in January 2024 was adequate, with liquidity ratios that were well above the level required for supervision. The ratios of Liquid Assets/Non-Core Deposits (AL/NCD) and Liquid Assets/Third Party Funds (LA/DPK) slightly decreased to 123.42 percent (December 2023: 127.07 percent) and 27.79 percent (December 2024: 28.73 percent), respectively, remained well above the regulatory thresholds of 50 percent and 10 percent.

Meanwhile, the credit quality was maintained with a net NPL banking ratio of 0.79 percent (December 2023: 0.71 percent) and a gross NPL of 2.35 percent (December 2023: 2.19 percent). As the national economy expanded, the amount of Covid-19 restructuring credit continued its downward trend to IDR251.21 trillion (December 2023: IDR265.78 trillion) or a decrease of IDR14.57 trillion, with the number of debtors reduced to 977.000 (December 2023: 1.04 million debtors).

In regard to the enforcement of laws and consumer protection in the banking sector, in February 2024, OJK revoked the business licenses of PT BPR Usaha Madani Karya Mulia, PT BPR Bank Pasar Bhakti, Perumda BPR Bank Purworejo, and BPR EDCCASH.

Developments in the Insurance, Guarantee and Pension Fund (PPDP) Sector

In the PPDP sector, the assets of the commercial insurance industry in January 2024 reached IDR903.07 trillion, or up 3.87 percent. In terms of its performance, premium income reached IDR36.25 trillion, or 18.63 percent yoy (December 2023: 3.02 percent yoy).

The growth of accumulated premiums in life insurance expanded by 8.24 percent yoy as of January 2024, with a total value of IDR17.34 trillion, and general insurance and reinsurance premiums grew by IDR18.91 trillion, or 30.09 percent yoy.

In general, capital in the insurance industry remained solid, as the life insurance and general insurance industries recorded Risk-Based Capital (RBC) above the threshold of 447.68 percent and 344.32 percent, respectively (December 2023: 457.98 percent and 363.10 percent), well above their thresholds of 120 percent.

In terms of social insurance, the total assets of BPJS Kesehatan (Indonesia’s national social security agency for health) as of January 2024 reached IDR106.20 trillion, or decreased compared to IDR114.43 trillion in January 2023 (down 7.19 percent yoy). Within the same period, the total assets of BPJS Ketenagakerjaan (Indonesia’s national social security agency for employment) reached IDR738.05 trillion, or 13.08 percent yoy. The assets of BPJS Ketenagakerjaan consist of assets related to the insurance program amounting to IDR108.74 trillion (up 11.92 percent) and assets related to the pension program amounting to IDR629.31 trillion (increased 13.28 percent).

In the pension fund industry, the assets of the voluntary pension fund as of January 2024 grew 6.75 percent yoy, with an asset value of IDR370.28 trillion (December 2023: IDR368.70 trillion) compared to IDR346.86 trillion in January 2023. As for guarantee companies, the asset value increased to IDR 46.65 trillion (December 2023: IDR 46.41 trillion), or 18.91% percent yoy, from IDR 39.23 trillion in January 2023.

In 2024, the grouping of data and information in the PPDP sector, OJK will adopt a new approach to provide a comprehensive snapshot of the development of the insurance sector and national pension funds, which combines commercial insurance, social insurance, and mandatory insurance.

The background of this grouping was driven by the assets component of social insurance and mandatory insurance, which consist of the program’s assets related to insurance, among others, the employment injury security program, death security, or unemployment benefit, as well as several programs related to pensions, e.g., old-age security and pension security.

In January 2024, the total assets of programs related to insurance were IDR1,122.43 trillion, or an increase of 3.47 percent yoy, while the total assets of programs related to pensions were IDR1,413.62 trillion, or an increase of 10.22 percent yoy.

In regard to the enforcement of laws and protection of consumers in the PPDP sector, in February 2024, OJK imposed 44 administrative sanctions on financial services institutions in the PPDP sector, consisting of 41 written warning and 3 monetary fines.

In developing the PPDP sector, OJK continued encouraging resolution at Financial Services Institutions experiencing problems through the special supervision of 7 insurance companies, hoping that the companies could improve their financial conditions for the benefit of policyholders. OJK also carried out special supervision over several problematic pension funds.

Regarding the handling of PT Asuransi Jiwa Kresna (Kresna Life - In Liquidation):

  1. In regard to consumer protection, OJK has carried out its supervisory function over PT Asuransi Jiwa Kresna (Kresna Life-In Liquidation) in accordance with applicable regulations, both as a company that still had a business license and when the company was in the process of liquidation.

  2. The supervisory actions carried out by OJK until the revocation of the business license were carried out in accordance with statutory provisions. The imposition of sanctions was carried out in stages according to the occurring violations while still providing opportunities for shareholders to improve the company's soundness. However, considering that by the specified time limit, there had been no improvement measures in the form of additional capital by the Controlling Shareholder, no strategic investors, and no notarized subordinated loan conversion agreements, the OJK revoked the business license in an effort to protect consumers from worsening conditions.

  3. OJK continued supervising the liquidation process of PT Asuransi Jiwa Kresna (Kresna Life) for policyholders who were registered to participate in the liquidation process.

  4. Regarding information about the Jakarta State Administrative Court (PTUN) Decision with case number 475/G/2023/PTUN.JKT on 22 February 2024 that repealed the Administrative Sanctions in the form of revocation of Kresna Life's business license, OJK was respectful to the PTUN decision. Further, OJK would take legal action to appeal in accordance with applicable regulations.

  5. ​​In carrying out its duties including following up on the aforesaid legal process, OJK would prioritize the protection of the policyholders' interests, in general.

Developments in Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Institutions (PVML) Sector

In the PVML sector, the growth of financing receivables remained high, although slowed down to 13.07 percent yoy in January 2024 (December 2023: 13.23 percent yoy), or IDR475.58 trillion, supported by working capital and multipurpose financing that grew by 15.29 percent yoy and 14.04 percent yoy, respectively. 

The risk profile of the Financing Company was maintained, with the net Non-Performing Financing (NPF) ratio recorded at 0.69 percent (December 2023: 0.64 percent) and a gross NPF of 2.50 percent (December 2023: 2.44 percent). The gearing ratio of finance companies relatively stable at 2.24 times (December 2023: 2.26 times), far below the maximum threshold of 10 times.

Growth of venture capital financing in January 2024 moderated by 8.50 percent yoy (December 2023: -3.74 percent yoy), with the financing value recorded at IDR16.40 trillion (December 2023: IDR 17.34 trillion).

In fintech peer-to-peer (P2P) lending, the growth of outstanding financing in January 2024 continued to increase to 18.40 percent yoy (December 2023: 16.67 percent yoy), or IDR60.42 trillion. The aggregated credit risk (TWP90/Loan Repayment Success within 90 days after the maturity date) was maintained at 2.95 percent (December 2023: 2.93 percent).

In regard to the enforcement of laws in the PVML sector: 

1.As of February 2024, based on monitoring results, 6 out of 146 Financing Companies (PP) and 5 out of 101 P2P Lending Providers had not fulfilled the provisions related to minimum capital requirements. For P2P Lending, 1 out of 5 P2P Lending providers made capital deposits but still had to fulfill the necessary administrative requirements, while the other 4 P2P Lending providers were still trying to fulfill their capital requirements.

OJK continues to monitor the fulfilment progress of the minimum capital requirements and the realization of action plans that have received OJK’s approval, either in the form of capital injection from Controlling Shareholders (PSPs) or new strategic investors, both local and foreign, and the return of the revoked business licenses. OJK issued administrative sanctions to PP and P2P Lending providers who had not met the capital requirements in accordance with applicable regulations.

2. In February 2024, OJK imposed administrative sanctions against 9 financing companies, 10 venture capital companies, and 34 P2P lending providers for violating the statutory regulations and/or following up on-site examinations. The imposition of administrative sanctions consists of 14 monetary fines, 65 written warnings/reprimands, and 3 sanctions for restrictions on business activities.

Developments in the Financial Sector Technology Innovation Sector (ITSK), Digital Financial Assets and Crypto Assets (IAKD)

1.In regards to the development of the OJK’s Regulatory Sandbox:

a. After the issuance of OJK Regulation (POJK) Number 13 of 2018 concerning Digital Financial Innovation in the Financial Services Sector, OJK received 458 applications from ITSK service providers to be registered in the Regulatory Sandbox. Based on these applications, OJK issued registered status to 155 ITSK service providers.

The Regulatory Sandbox registration applications is currently entering Batch 26 and Batch 27, whereas 16 ITSK services providers have submitted their applications. OJK is currently carrying out the process of verifying the correctness of documents and evaluating the business model innovations submitted by the 16 ITSK services providers.

b. In February 2024, OJK determined the results of the Regulatory Sandbox for ITSK services providers in 3 business model clusters, namely:

  • Recommended status for 1 ITSK services providers in the Regtech PEP cluster.

The status was provided because the organizer presented that its innovations would offer benefits or cost efficiency for Financial Services Institutions in providing high-profile/PEP background checking services. The presence of this innovation is closely related to the intention of increasing compliance with AML/CTF and CPF regulations that must be carried out by Financial Services Institutions in accordance with applicable regulations. Further, considering that the provider played a role as an IT Solution in the form of data transmission technology from the users of Financial Services Institutions to data source partners, OJK is recommended that the provider be an information technology service provider that will be affiliated with the Ministry of Communication and Information Technology.

  • Recommended status for 1 ITSK Provider in the Insurance Hub cluster.

The status was provided based on the results of testing 1 prototype, which was an information technology service provider from an Insurance Broker that had helped with the distribution of insurance products and payment of claims. Referring to the provisions in POJK Number 28 of 2022, Insurance Brokerage Companies in providing Digital Insurance Brokerage Services, are required to use an Electronic System that is owned, controlled, and managed by the Insurance Brokerage Company. Therefore, Insurance Hub is recommended to become an information technology service provider and is prohibited from carrying out Insurance Brokerage business activities and providing Digital Insurance Brokerage Services.

  • Recommended status for 3 ITSK Providers in the InsurTech cluster.

The status was provided based on the results of testing 1 prototype, which was an information technology services provider from Insurance Brokers and Insurance Companies to support the distribution process starting from insurance products, submission of insurance claims, and acceleration of the claims process. Referring to the provisions in POJK Number 28 of 2022, Insurance Brokerage Companies that provide Digital Insurance Brokerage Services are required to use an Electronic System that is owned, controlled, and managed by the Insurance Brokerage Company. Therefore, InsurTech is recommended to become an information technology service provider or submit an application for business licenses for an Insurance Brokerage and a Digital Insurance Brokerage Service in accordance with the provisions of POJK Number 28 of 2022

c. As a result, as of February 2024, the number of ITSK services providers registered in the OJK Regulatory Sandbox that were being processed was reduced to 63 participants and was divided into 8 business model clusters.

2. Further, OJK will continue to accelerate the evaluation and provision of recommendations for the Regulatory Sandbox process, especially in relation to clusters that have characteristics of business models and similar activities, e.g., Financing Agent, Funding Agent, Online Distress Solution, Financial Planner, and Wealth Tech.

3. In regard to the development of crypto asset activities in Indonesia, the number of domestic crypto asset investors ranked seventh as the country with the largest number of crypto asset investors in the world. As of January 2024, the total number of crypto asset investors reached 18.83 million, or an increase of 320,000 compared to the previous month. Meanwhile, the value of crypto asset transactions in the same period was recorded at IDR21.57 trillion, or an increase of 77.68 percent yoy. The total accumulated value of crypto asset transactions throughout 2024 was recorded at IDR 48.82 trillion.

Furthermore, OJK continuously encourages increasing digital financial literacy and inclusion, strengthening a sustainable digital financial ecosystem, as well as ethical and responsible business practices, especially those related to the application of Artificial Intelligence in the ITSK sector. OJK collaborates with relevant Ministries/Institutions and associations in the ITSK sector (AFTECH, AFSI, and ASPAKRINDO) to optimize innovation to support national economic growth.

Developments in the Market Conduct Supervision and Consumer Protection and Education (PEPK)

As of 29 February 2024, OJK had performed 85 financial education activities, participated in by 11,121 individuals across the nation. Sikapi Uangmu, as a digital communication media channel providing information on financial education content to the public through a minisite and applications, had published 66 financial educational contents, with a total of 288,968 viewers from January to February 2024. In addition, as of 29 February 2024, the Learning Management System for Financial Education (LMSKU) had been accessed 50,727 times, and 40,412 certificates of module completion were issued to 42,548 users.

Meanwhile, OJK consistently strengthened support from Financial Services Providers and related stakeholders, both domestic and international, for the financial literacy and inclusion of Indonesian Migrant Workers (PMI) and the segment of Indonesian Diaspora domiciled abroad, both through organizing financial education activities and providing information support and mentoring, including a strategic alliance between OJK and the Consulate General of the Republic of Indonesia in Hong Kong and the Hong Kong Investor and Financial Education Council (IFEC) as well as Financial Services Providers Indonesia regarding education for PMI and the Indonesian Diaspora in Hong Kong.

OJK’s financial literacy initiative was accompanied by strengthening the financial inclusion program which was supported by various parties, including through synergy within the Regional Financial Access Acceleration Team (TPAKD), Ministries/Agencies, Financial Services Providers, academics, and other stakeholders. As of 29 February 2024, 515 TPAKDs were established in 34 provinces and 481 municipalities (93.58 municipalities in Indonesia).

From 2023 to 23 February 2024, OJK received 380,758 inquiries from Consumer Protection Portal Application (APPK), including 27,283 complaints. Of these complaints, 12,420 were related to the banking sector, 7,183 were related to the financial technology industry, 5,142 were related to the financing company industry, 1,820 were related to the insurance industry and the remaining were inquiries related to the capital markets sector, and other NBFI.

In regard to the eradication of illegal financial activities, OJK together with all members of the Task Force for the Eradication of Illegal Financial Activities (Satgas PASTI) continued to enhance coordination in handling illegal online investments and lending. From 1 January 2023 to 13 February 2024, the Task Force closed 3,031 illegal financial entities, consisting of 40 illegal investments and 2,481 illegal online lending. As of 26 February 2024, there were 3,296 complaints about illegal entities, including 3,121 complaints about illegal lending, and 175 complaints about illegal investments, with the development of the number of illegal entities that had been closed down suspended were as follows

Entity ​
Year ​ ​ ​ ​ ​ ​ ​
2017 - 20182019202020212022202313 Feb 2024Total 
Illegal Investments185442347981064001,218 
Illegal Online Lending4041,4931,0268116982,2482336,680 
Illegal Pawn brokerage06875179100251 
Personal Lending0000043278510 


OJK Policy Direction 

In order to maintain financial services sector stability and increase the financial services sector's supporting capacity for national economic growth, OJK has taken the following policy measures:

A.   Policies to Maintain Financial System Stability

The financial services industry must remain vigilant to the potential impact of risks posed by escalating global geopolitical tensions, which could result in commodity price fluctuations. On the other hand, easing global inflationary pressures, but not yet in line with market expectations and solid US economic growth, gave rise to the potential higher for longer.

B.  Policies to Strengthen the Financial Services Sector and Market Infrastructure

1.PBKN - OJK is committed to continuing uphold the integrity of the financial system and a sound banking industry by strengthening and consolidating BPRs in order to strengthen their capital.

In 2023, the number of BPRs decreased by 33, most of which were due to mergers or consolidations with other BPRs or within one ownership group in order to strengthen capital.

Meanwhile, the number of BPRs with core capital above IDR 6 billion increased from 1,076 BPRs to 1,190 BPRs.

To continue supporting the strengthening of BPRs, OJK will launch a Roadmap for the Development and Strengthening of BPRs, a series of several regulations that were issued in 2023 and the implementation of the PPSK Law, as well as encouraging improvements in the soundness level of BPRs through various supervisory actions in accordance with the provisions.

OJK is also preparing guidelines to support the effective implementation of Sharia Rural Bank BPR/S risk-based supervision, including the periodization of preparation and simplifying the scope and flow of the Know Your Bank (KYB) document preparation process.

2. PBKN – As part of the Indonesian Banking Road to Net Zero Emissions (NZE), OJK launched a Climate Risk Management and Scenario Analysis (CRMS) as a guide for the banking industry to assess the resilience of bank business models and strategies in facing climate change and encourage banks to develop NZE transition plans.

3. PPDP – One of OJK's priority programs for the insurance industry sector is improving regulations related to insurance products and insurance product distribution channels.

To achieve regulatory balance, revisions to the provisions were made so that they could encourage varied and dynamic insurance product innovation while strengthening prudential aspects, and market behaviour.

One of the main substances to improve regulatory provisions regarding insurance products is by simplifying the approval mechanism and recording of insurance products, which are adjusted to the complexity and risk level of insurance products, while simultaneously encouraging the strengthening of insurance companies, especially in terms of developing and monitoring insurance products.

4. PVML - OJK launched a Roadmap for the Development and Strengthening of Financing Institutions 2024-2028 in early March 2024 for achieving a financing institution industry that is sound, strong, inclusive, has integrity, is adaptive to technological advancement, and contributes to sustainable economic growth.

Roadmap for the Development and Strengthening of Financing Institutions 2024-2028 is supported by four pillars of development and strengthening principles, namely: (1) Strengthening resilience and competitiveness; (2) Development of elements in the ecosystem; (3) Accelerating digital transformation; and (4) Strengthening Regulation, Supervision and Licensing. The Roadmap would be implemented in 3 phases, namely, strengthening the foundation (2024-2025), consolidation and momentum creation (2026-2027), and alignment and growth (2028).

5. PEPK – To strengthen consumer protection, OJK is currently preparing internal regulations regarding the supervision of Financial Services Businesses market conduct, which are complementary to sectoral/prudential supervision and consist of preventive and proactive actions in responding to every Financial Services Businesses behavior to support enforcement of the principle of consumer and community protection.

C.  Developments and Strengthening of Sharia Financial Services Sector

1.In the Banking sector – OJK issued POJK Number 2 of 2024 concerning the Implementation of Sharia Governance for Islamic Commercial Banks and Islamic Banking Window, which came into force on the date of promulgation on 16 February 2024.

This POJK issuance was prepared in order to follow-up on Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU PPSK), which regulates, among others, fundamental and strategic matters in the governance implementation to ensure that the business activities and operations of Sharia Commercial Bank (BUS) and Islamic Banking Window (UUS) are in compliance with Sharia principles, i.e., strengthening authority, structure and function of the Sharia Supervisory Board (DPS), implementation of Sharia compliance functions, Sharia risk management functions, Sharia internal audit functions, as well as the obligation to carry out external reviews of the sharia governance implementation.

2. In the Insurance, Guarantee, and Pension Fund Sector – Based on POJK Number 11 of 2023 concerning the Spin-off of the Islamic Window of Insurance Companies and Reinsurance Companies, the Islamic Windows of insurance/reinsurance companies are required to submit an Islamic Window Spin-off Work Plan (RKPUS).

Based on the RKPUS that had been submitted, of the 42 Islamic Windows, 32 planned to continue the Sharia insurance/reinsurance businesses, and 10 others opted to not continue the Sharia insurance/reinsurance businesses, of which 1 Islamic Window had carried out a portfolio transfer in 2023.

Regarding the spin-off implementation, there are 5 Islamic windows in 2024, 15 Islamic windows in 2025, and 12 Islamic windows in 2026. As a follow-up to the RKPUS that had been submitted, OJK was ensuring the readiness of sharia companies/Islamic window to implement the RKPUS.

This is intended so that the company is ready to carry out a spin-off so that the spin-off process can be carried out no later than the end of 2026 as regulated in POJK Number 11 of 2023.

3. In the Market Conduct Supervision, Consumer Protection and Education – OJK is preparing to establish a Sharia Financial Literacy and Inclusion Working Group (POKJA LIKS) as a coordination forum in order to reduce the gap between Sharia literacy and financial inclusion and conventional financial literacy/inclusion by providing recommendations on policy development and measures to improve Sharia financial literacy and inclusion.

D. Financial Services Sector Technology Innovation (ITSK), Digital Financial Assets and Crypto Assets (IAKD)

OJK is preparing regulatory, development, and supervision infrastructure for the ITSK sector and digital financial assets including crypto assets, so that they can play a role in deepening the financial market and contributing to national economic growth within the financial stability framework. The IAKD Sector Policy Direction includes:

  1. OJK issued POJK Number 3 of 2024 concerning the Implementation of Financial Services Sector Technology Innovation (ITSK) as an implementation of the mandate for regulating and supervising ITSK as regulated in the P2SK Law. OJK implements the enhanced Regulatory Sandbox mechanism for carrying out trials and developing innovations in the Financial Services Sector. This POJK also further strengthens the legal basis for ITSK providers to carry out their operations in the Financial Services Sector through registration and licensing mechanisms at OJK.

  2. OJK will issue technical provisions in the OJK Circular Letter (SEOJK) regarding the mechanism of the Regulatory Sandbox, registration for ITSK providers, Supervision and Reporting Requirements of ITSK providers, and the Association of ITSK providers.

  3. In addition, OJK will issue provisions regarding Digital Financial Assets including Crypto Assets as a follow-up to the transfer of authority to regulate and supervise digital financial assets, including crypto assets, from Bappebti (CoFTRA/Commodity Futures Trading Regulatory Agency) to OJK. In addition, OJK will publish the 2024-2028 IAKD Roadmap as well as provisions regarding Alternative Credit Ratings.

  4. OJK is coordinating with CoFTRA and Bank Indonesia in preparing the transfer of authority to regulate and supervise digital financial assets, including crypto assets, from CoFTRA to OJK, one of which is related to the plan to form a Transitional Team, which will be coordinated by OJK.

  5. OJK is currently preparing a Memorandum of Understanding with Bank Negara Malaysia, Monetary Authority of Singapore, and Dubai Virtual Asset Regulatory Authority (VARA), and other relevant authorities to strengthen cooperation regarding the preparation of policy frameworks, regulation, and supervision of ITSK, digital financial assets including crypto assets.

E. OJK Governance Strengthening

  1. Internal Audit, Risk Management, and Internal Control (ARK) - OJK is committed to strengthening assurance and consultancy, and risk management and integrity upholding on an ongoing basis in realizing governance transformation and encouraging continuous improvement through several strategic programs, including:

    1. Strengthening Financial Services Sector governance that was included as one of OJK’s flagship activities in collaboration with relevant stakeholders through the Strengthening Governance and Integrity Forum in several regions, and holding the annual Risk & Governance Summit event at the end of the year.

    2. Strengthening the policies of Financial Services Sector supervision quality control through the implementation of Quality Control & Quality Assurance (QCQA).

    3. Strengthening risk management, including through improving risk management infrastructure and strengthening reliability and the infrastructure of Business Continuity Management (MKB).

    4. Strengthening assurance that prioritizes resolving the root of the problem with a business process-based audit approach and optimizing data analytics.

    5. Strengthening enforcement of the OJK’s integrity through a self-prevention program involving all working units at OJK.

    6. Strengthening the proactive consulting provision related to GRC.

  2. OJK continued to improve the competency and quality of human resources in carrying out supervisory functions for the Financial Services Sector through holding Quality Control and Quality Assurance (QCQA) training in collaboration with the Audit Board of the Republic of Indonesia (BPK RI), after previously holding Internal Audit and Investigation training in 2023. This training program was expected to improve competence and understanding of Quality Management concepts to identify and develop more effective QCQA mechanisms and tools for the supervision of each sector.

  3. Based on the results of the integrity assessment survey (SPI) conducted by the Corruption Eradication Commission (KPK), OJK succeeded in obtaining a score of 83.26, above the average scores of Ministries/Institutions/Regional Governments throughout Indonesia, i.e., 70.97.

This reflects that OJK is at low risk of corruption, while also showing that OJK's fraud prevention and eradication strategy has been running massively and effectively. OJK continues to implement OJK fraud prevention and eradication strategies through self-dissemination by all standardized first-line working units, building and developing a culture of OJK integrity, as well as expanding the scope of OJK’s ISO 37001 Anti-Bribery Management System (SMAP) certification for all working units at OJK.

F.  Investigation Progress

In exercising its investigative functions, as of 29 February 2024, OJK investigators had completed a total of 119 investigation cases, consisting of 94 cases in the banking sector, 5 cases in the capital market sector, and 20 cases in the NBFI sector. Further, the number of cases that had been decided by the court was 101, of which 95 were decided with a final and binding decision (in kracht) and 6 cases were still in the cassation with the Supreme Court.

 ​ ​
BankingCapital MarketNBFITotal
Review Process810321
Casefile Preparation0000
P-21 (Casefile completed)94520119
​ Court Process ​ ​ ​ ​ ​
Final and binding decision (In Kracht)77513
Appeal with the appellate court0000
Cassation with the Supreme Court2046

Through the implementation of policies and law enforcement measures, and continuous synergy with the Government, Bank of Indonesia, LPS, and the financial industry and business associations in the real sector, OJK is optimistic that the financial system stability can be maintained.​

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