BANKING LAW

BI AND OJK FUNCTION:

QUESTIONS AND ANSWERS

FH UI KKI 2016

Audley Al Rasyid 1606864336

Deananda Ayusaputri 1606864342

Izaldi Fikri M 1606864355

Jasmine Sephira 1606864361

Oktoriza Adyaprasasta 1606864323

Fakultas Hukum Universitas Indonesia

Depok
2019
Yasmin Hanan (Group 1): If their functions are not accomplished, are BI and OJK able to
be held responsible to provide compensation as not acting in accordance to their functions
would hinder the flow of economic activities that might cause losses?

As BI and OJK as an institution is independent, there’s no one holding BI and OJK responsible
over anything in the first place. As such, to answer your question directly, they cannot be held
responsible to compensate for their failure to perform their duties.

Though, another safety measure is already put in place. In article 44 of UU no. 21/2011, it is
stated that in ensuring the stability of the state’s financial system, a forum is established,
consisting of the Ministry of Finance, Governor of BI, OJK’s Head of Commissionary Board,
and Deposit Insurance Corporation’s Head of Commissionary Board (Lembaga Penjamin
Simpanan); otherwise known as the “Forum Koordinasi Stabilitas Sistem Keuangan”. Later
articles explains that this forum serves to ensure the stability of the state’s financial system,
through recommendations to its members, and regulations (which requires the approval of the
People’s Representative Council). Under normal circumstances, the authority of said forum is
limited to only supervision and evaluation of the financial system’s stability, and create
recommendations from it towards each of its members [Art. 45 (1)]. Yet, under special
circumstances such as a financial crisis, the most direct action that the forum is capable of, in so
far what is explained in the UU, is to make a decision on how to deal with the issue, which
would again requires the member to implement it [Art. 45 (2), (3), (4)].

Thus, the articles above implies that in preventing and dealing with the destabilization of the
state’s financial system, the forum serves as an instrument for coordination between the state’s
vital institution in terms of the financial system.

Vinda (group 2) BI has a role as regulator and supervisor of banking activities in

Indonesia. Does BI has the ability to ask information about the financial condition of its
customers

According to Article 9 of Bank Indonesia Regulation Number: 3/10 / PBI / 2001 Banks must
have an information system that can identify, analyze, monitor and provide reports effectively on
the characteristics of transactions carried out by Bank Customers.1 But in Article 2 of Bank
Indonesia Regulation Number 16/ 1 /PBI/2014 it is stated that Banks must protect the customer
in banking activities, which means Bank have a limited ability in this matter. And also in Article
3 of Bank Indonesia Regulation Number 16/ 1 /PBI/2014 the principles of Consumer Protection
include fairness and reliability2. Therefore. Based on two regulation above, the Bank can request

1
Bank Indonesia Regulation Number: 3/10 / PBI / 2001
2
Bank Indonesia Regulation Number 16/ 1 /PBI/2014
and access of customer banking information but limited by the rules regarding customer
protection.

Kiranatasha (Group 4): OJK is a relatively new institution. Is it really necessary for OJK
to be established? since before the OJK was established, the functions of OJK was
conducted by BI anyway? Please state your opinion.

Even though BI has the full function of handling all things regarding financial and banking, there
is a change ever since OJK was formed in the year 2013. After OJK was formed, BI has only one
main goal which is achieving and maintaining rupiah stability3. Now this is where they start to
seperate, law no 21/2011 regarding OJK regulates regarding the duties of OJK, some of these
duties are related to banking, which was in the past handled by BI. Now the duties of BI of
supervising and such is given to OJK as per stated by law no 21/2011, however article 39 also
stipulates that there is still a coordination bond between OJK and BI. So in conclusion, the main
reason why OJK was formed is so that BI can focus in its sole and main goal which is
maintaining rupiah stability and also regulating banking in a macro basis through various
regulations of BI, Surat edaran and regulations which have an impact directly or indirectly on
monetary stability, while OJK will regulate banking in a micro way through supervision, POJK
(Peraturan OJK), Surat edaran, and regulations.4

Bernanti A (Group 5): Are there any other coordinations between BI and OJK apart from
making supervisory regulations?

Based on the provisions of Article 69 paragraph (1) letter (a) Law No. 21 of 2011 affirms that the
task of Bank Indonesia in regulating and supervising banks transferred to OJK is the task of
regulation and supervision related to microprudential, while Bank Indonesia still has the task of
regulating macroprudential banking. In this regard, the task of regulating banks is not fully
implemented independently by the OJK, because microprudential and macroprudential
arrangements will be closely related. Thus, it can be seen that the relationship between OJK and
Bank Indonesia is not only in making regulations, but also in banking supervision.5

Caleb Sitorus (Group 6) Is it possible that the BI and OJK have contradicting
policies/regulations towards the financial institution? if it is possible, how is it resolved?

3
"Fungsi Bank Indonesia." Monetary Sector - Bank Sentral Republik Indonesia. Accessed February 25,
2019. https://www.bi.go.id/id/tentang-bi/fungsi-bi/tujuan/Contents/Default.aspx.

4
"FAQ-Otoritas-Jasa-Keuangan." Siaran Pers. Accessed February 25, 2019.
https://www.ojk.go.id/id/Pages/FAQ-Otoritas-Jasa-Keuangan.aspx.

5
"HUBUNGAN HUKUM BANK INDONESIA SEBAGAI BANK SENTRAL DENGAN OTORITAS JASA
KEUANGAN (OJK) PASCA PENGALIHAN FUNGSI PENGAWASAN PERBANKAN".Accessed February
25, 2019. http://journal.umy.ac.id/index.php/jmh/article/view/276.
Regarding regulating financial institution, the function itself is already given to OJK after it was
formed. As per law no. 21/2011 article 6, OJK has the authority to regulate and supervise
financial institutions. In article 9, it is stated that OJK is even given the authority to give
sanctions to those who break regulations. So from this perspective it can be seen that regarding
financial institutions, OJK will be the one handling it, and even if it happens that BI and OJK has
contradicting policies/regulations towards financial institution, OJK will have the higher
authority because it is their duty as per law no.21/2011. Just to add, in article 39 of law no.
21/2011 it is stated that in doing their duties, OJK coordinates with BI in regards of making
supervision regulations in banking sectors, which means that the chances of them having
contradicting policies/regulations is almost none.
6

Laras (group 7): what happens when the OJK is incapable of fulfilling its functions? are
there any mechanism to ensure the fulfillment of their function?

As answered in group 3’s question above, a forum consisting of the Ministry of Finance,
Governor of BI, OJK’s Head of Commissionary Board, and Deposit Insurance Corporation’s
Head of Commissionary Board. This forum serves to ensure the cooperation between those
institution in ensuring the stability of the state’s financial system, as ultimately, each institutions
have their limits in which others might be able to reach. As such, to ensure that OJK (or any of
the institutions above) is able to fulfill their function, it would require the cooperation between
them all.

Nano (Group 8): BI has the function of supervising banks, but OJK has a supervisory
function as well - which means that their functions overlap. In practice, how do they solve
this overlapping of functions?

BI in carrying out its authority to carry out special checks on a particular bank must submit
written notification in advance to the OJK. In the examination BI cannot provide any assessment
of the level of a bank.7 Furthermore, BI, OJK, and LPS as the authority of financial service
institutions strengthen coordination and synergy in realizing integration of banking reporting at
the end of 2019. Integration of banking reporting is a form of mandatory implementation of
article 43 of Law No. 21 of 2011 concerning OJK which gives obligations to OJK, BI and LPS to
build and maintain an integrated means of information exchange. Reporting Integration is an
integrated and metadata-based reporting mechanism by upholding efficiency principles,
consistency and clarity, flexibility, and collaboration. Compilation of banking reporting
integration takes into account the efficiency aspects of the industry and the authority of the
relevant financial service institutions. Collaboration between authority and commitment to

6
Undang-undang republik Indonesia Nomor 21 Tahun 2011 tentang Otoritas Jasa Keuangan
7
Article 40 of Law Number 21 Year 2011 concerning OJK
create an efficient reporting is the foundation to avoid repetition of information by banks to
authorities.8

Regina (Group 9): As we know that OJK has taken over BI’s function to oversee all
activities in the financial services sector in Indonesia, so why does this require a separate
institution?

The birth of Law Number 21 Year 2011 concerning OJK, the role of BI as banking supervision
will be lost and Bank Indonesia will focus as a regulator in the field of monetary
(macroprudential). The implication is that the regulation and supervision function of the financial
services system in the microprudential scope is left to the OJK, while BI is only tasked with
maintaining monetary stability and monitoring of the macroprudential scope. The birth of the
OJK was mandated by Law Number 3 of 2004 concerning BI, the LPS Law was the basis for the
formation of the LPS. The purpose of establishing LPS is to protect depositors, so that depositors
still trust their funds to be deposited in the bank. OJK, LPS, and BI are independent institutions
that both have roles, objectives, duties and authorities in an effort to maintain the stability of the
financial system in Indonesia. OJK and LPS have their respective functions determined by law.
Based on Chapter X Article 39-43 of Law Number 21 Year 2011 concerning OJK, it is explained
that OJK, LPS, and Bank Indonesia have institutional relations in carrying out their functions,
duties and authorities. With the coordination between the 3 institutions, there are efforts in
handling problem banks in them.9

8
"Siaran Pers," Monetary Sector - Bank Sentral Republik Indonesia, accessed February 25, 2019,
https://www.bi.go.id/id/ruang-media/siaran-pers/Pages/SP_011118.aspx.
9
Chandra Gian Asmara, "BI, OJK Dan LPS Bersiap Integrasikan Laporan Perbankan," Lifestyle,
November 01, 2018, accessed February 25, 2019, https://www.cnbcindonesia.com/news/20181101180952-4-
40199/bi-ojk-dan-lps-bersiap-integrasikan-laporan-perbankan.