IMPROVEMENT OF SUPERVISORY FUNCTION
"Creation of a strong, highly competitive banking industry, resilient in the face of risks."
This program aims to improve the independence and effectiveness of bank supervision conducted by Bank Indonesia. This objective will be achieved by strengthening coordination with other supervisory agencies, reorganizing the banking sector at Bank Indonesia, improving the supporting infrastructure for bank supervision, improvement of risk-based supervision, and more effective enforcement. Thus in the next two to five years, it is expected that the bank supervision functions performed by Bank Indonesia will be on the level of supervision conducted by authorities in other countries.
:: Phase of Implementation
| No | Activity (Pillar III) | Implementation Schedule |
|---|
| 1. | Strengthening coordination among supervisory agencies | |
| a. Draft MoU with other financial institution supervisory agencies to improve the effective supervision of banks and SSK monitoring | 2004-2006 |
| 2 | Reorganization of banking sector at Bank Indonesia | |
| a. Revise High Level Organization Structure (HLOS) of the Banking Sector at Bank Indonesia | 2004 – 2006 |
| b. Consolidation of supervision and examination units, including the establishment of special team of specialist examiners | 2004 – 2006 |
| c. Consolidation of Rural Bank Supervision Directorate and Credit Bureau at Bank Indonesia, including the transfer of functions of: | 2006 – 2007 |
| UMKM research and development of the Credit Bureau to the Special Assets | |
| Examination of credit from the Credit Bureau to the Conventional Bank Supervision Directorate | |
| d. Revise the organization of the Bank Perkreditan Rakyat Supervision Directorate (DPBPR) to allow the transfer of the guarantee role of Rural Banks to a Deposit Insurance Agency, and the transfer of the licensing of new Rural Banks, along with research and supervision to other work unit at Bank Indonesia | 2005 – 2006 |
| e. Revise the organization of the Sharia Banking Directorate | 2005 – 2006 |
| 3 | Improve Support Infrastructure for Banking Supervision | |
| a. Improve the competency of supervision of both conventional and sharia banks and Rural Banks through a certification program and attachment to international supervision agencies | 2004 – 2005 |
| b. Train Supervision Specialists | 2006 – 2007 |
| c. Improve IT for banking supervision | 2005 – 2006 |
| d. Improve the Rural Bank reporting system | 2005 – 2007 |
| e. Improve banking supervision documentation management | 2005 – 2006 |
| 4 | Improve the implementation of the risk-based supervision system | 2004-2005 |
| Improve the guidelines and supervision instruments to improve the implementation of risk-based supervision of conventional and sharia banks | |
| 5 | More effective enforcement | |
| a. Improve the process of investigation of banking crimes | 2004 – 2005 |
| b. Increase the transparency of supervision to support effective enforcement | 2006 |
| c. Increase the legal protection of bank supervision officials | 2006 |
