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Monitoring

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

Pengawasan-Perbankan

Monitoring

Indonesian Banking Architecture