Summary of the Role of Bank Indonesia,

Indonesia Deposit Insurance Corporation

and the Financial Services Authority.
NAME : BILLY JOHANES COLLIN NUMBER :
017201700007
The role of Bank Indonesia as an operator:
- Sales of Bank Indonesia Certificates / purchases of securities from the public
- Defined the inflation rate
- Establishment of monetary targets
- Raising commercial bank cash ratio / CAR
- Adjust the level of credit and financing
- Determined interest rates on commercial bank loans
The role of Bank Indonesia as a regulator (regulator):
- apply market discipline through its authority
- Check banks regularly if needed
- Policy regarding bank obligations to submit reports
- Giving permission to open, close and transfer Bank offices
- Give approval in matters relating to ownership
- Giving permission to the Bank to run certain legal businesses
- Giving permission to open, close and transfer Bank offices
- Give approval in matters relating to ownership
- Giving permission to the Bank to run certain businesses
- Granting and revocation of a bank's business license
- Effective policy implementation
The role of Bank Indonesia as a regulator of the payment system:
- Enforcement of provisions regarding payment instruments
- Issue a payment instrument; Circulate payment instruments
- Determine and enforce the National Payment System
- Carry out licensing for the operation of National Payment System services
- Supervise National Payment System services
- Enforcement of the provisions of the clearing system.

The Role of LPS :

The function of LPS is to guarantee deposits of depositors and to actively participate in
maintaining the stability of the banking system in accordance with their authority. The
guarantee function is manifested by paying a guarantee claim on deposits of bank
customers who have been revoked and assigning a liquidation team to settle the bank's
assets and liabilities, while the function of actively maintaining banking system stability
is manifested in efforts to save or restore failed banks that have no systemic impact or
failed banks that are systemically affected (bank resolution).
The decision to save or not save the bank failed without a systemic impact determined
by LPS. One of the considerations is based on the calculation of lower costs (lower cost
test) between saving the bank and paying guarantee claims. Meanwhile, the decision to
rescue a systemic impact was determined and submitted by the Coordination
Committee (KK) consisting of the Minister of Finance, Governor of Bank Indonesia (BI),
and Chairperson of the Board of Commissioners. After that, LPS acted as the executor
in the rescue of failed banks which had been decided to have a systemic impact.
In an effort to save a failed bank, LPS has the authority, among others, to take over and
exercise all rights and authorities of shareholders, including the GMS; master, manage
and sell / transfer bank assets; do temporary capital participation (PMS); and transfer
management to other parties. LPS has a maximum rescue period of 4 years for banks
not having a systemic impact and 5 years for failed banks with systemic impacts.
Furthermore, LPS must sell all bank shares obtained from temporary capital
participation (PMS) in an open and transparent manner.

The Role of Financial Services Authority :

One of the roles of OJK in the bank's business sector is to regulate and supervise
business activities in the banking sector. OJK's authority, as stated in Article 7 of the
OJK Law, is to stipulate regulations and conduct supervision. Such arrangements and
supervision include:

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 - Licensing to establish a bank, opening a bank office permit, work plan, articles of
association, management & human resources, ownership, merger, revocation of
bank business licenses, and consolidation & acquisition of banks.
- The bank's business activities include the provision of funds, sources of funds,
activities in services, and hybrid products.
In Article 7 of the OJK Law also stated the role of the FSA - the Financial Services
Authority in the Business Bank to make arrangements and conduct supervision of bank
health which includes:
- Bank reports relating to bank health and performance
- Credit testing
- Debtor information system
- Bank accounting standards
- Liquidity, solvency, profitability, asset quality, maximum lending limit, ratio
- Minimum capital adequacy, bank reserves, and the ratio of loans to deposits.
In the same article, OJK also has the authority to make arrangements and carry out
supervisory functions related to bank prudential aspects including bank governance, risk
management, prevention of financing of terrorism & banking crime, the principle of
knowing customers and anti-money laundering, and conducting checks bank. OJK's
authority relating to bank supervision duties contained in article 9 of the OJK Law is as
follows:
- Establish operational supervision policies for financial service activities
- Supervise the implementation of supervisory duties carried out by the chief
executive
- Giving orders to banks and / or certain parties
- Conducting supervision, investigation, inspection, consumer protection, and other
matters concerning banks, actors and supporting financial services activities as
referred to in the laws and regulations in the field of financial services
- Establish the use of a statutory manager
- Appoint statutory managers
- Enforce administrative sanctions on parties who violate the regulations in the
field of financial services
- Give permission and revoke business license
For a conclusion, the financial services authority have a main role ;
1. Supervision of Banks
2. Give permission to establish a bank
3. Strengthening Financial Services Resilience
4. To solve a lackness