Financial
Services Authority, Jakarta, July 18, 2014: Financial Services Authority (OJK) and Deposit Insurance Corporation
(LPS) has made an agreement on coordination and cooperation in the framework of
interconnection between OJK`s and LPS` implementation of functions and duties.
The signing of memorandum of understanding (MoU) was conducted by Chairman of
OJK Board of Commissioners Muliaman D. Hadad and Chairman of LPS Board of
Commissioners C. Heru Budiargo in Jakarta on Friday (July 18).
The MoU was initiated on the background of the
transferring of function, duty and authority over banking supervision from Bank
Indonesia to OJK, which requires cooperation and coordination between OJK and
LPS in order to expedite the implementation of their respective duties
according to the mandate of Law Number 21 of 2011 on OJK and Law Number 24 of
2004 on LPS. The cooperation is intended to improve coordination between OJK
and LPS in managing their respective functions, duties and authorities to
maintain the stability of Indonesia`s financial system.
Current development of banking performance looks
reasonably well, indicated by capital adequacy ratio (CAR) that remained high
at 19.8% and a low non-performing loan (NPL) ratio at 1.9% in average. In order
to keep improving banking performance, this must be supported by improvement in
the harmonious and integrated regulation of financial services sector. OJK
continually strengthens banking structure through integrated risk management,
integrated good corporate governance, and adequate capitalization for financial
conglomeration.
Efforts to strengthen banking industry also depend on
public trust. One of the ways to leverage public trust from depositor customers
is by providing limited insurance system, and that is LPS` function. In order
to keep the society`s level of trust towards banking industry, cooperation and
coordination between OJK and LPS is required, particularly in handling banks
that have problems. The handling requires a close coordination, mainly in
necessary joint investigation. This MoU is required in order to expedite the
implementation of OJK`s and LPS duties, so as to create a synergized
cooperation and coordination.
The MoU contains primary subjects related to
effectiveness:
A. Implementation
of deposit insurance and supervision over banks;
B. Coordination in
follow-up measures regarding result of analysis and supervision over banks;
C. Coordination
regarding banks in intensive supervision and banks in special supervision;
D. Coordination in
settlement and handling of failed banks;
E. Coordination in
follow-up measures regarding settlement of banks whose business licenses had
been revoked;
F. Stipulation of proper
interest rate in the framework of insurance claim payment; and
G. Handling of
other duties implementation, including data and information confidentiality.
OJK and LPS have significant roles in financial system
safety net, therefore cooperation and coordination between OJK and LPS,
particularly in banking supervision, need to be carried out comprehensively and
with synergy, so that each institution can execute their duties effectively.
For more information:
Lucky F.A Hadibrata, Deputy
Commissioner IB for Strategic Management, OJK
Phone: 021-3858001, Email: lucky.fathul@ojk.go.id/www.ojk.go.id
Samsu Adi
Nugroho, Secretary of LPS
Phone: 021-5151000, Email: adi_noegi@lps.go.id/Humas@lps.go.id