OJK Commissioner Selection

KOMPAS/ALIF ICHWAN

Employee activities at the Financial Services Authority (OJK) office in Jakarta on Monday (13/2/2017). As of last week, the OJK has received 834 applicants’ proposal for OJK commissioners. After a selection process, 107 applicants passed the first stage.

The financial industry awaits the results of a fit and proper test by Commission XI of the House of Representatives (DPR) on the 14 candidates for the Board of Commissioners of the Financial Services Authority (OJK).

The member selection of the OJK\'s Board of Commissioners has attracted attention because the institution has a mandate to establish an integrated regulatory and supervisory system on the activities of the financial services sector. The fit and proper test is to take place until Thursday (8/6).

As an institution authorized to issue rules on the supervision of the movement of bank and non bank financial institutions, the OJK is required to participate in developing the finance industry. In other words, there needs to be a balance between limiting and encouraging the growth of the industry.

One of the targets of developing the financial industry is increasing and expanding its capacity to finance development projects, in order to realize high and inclusive economic growth, job creation, and equitable development outcomes. The OJK is also expected to create a financial market that is active, inclusive, liquid, and efficient through its supervisory and regulatory role.

Future challenges for members of the board of commissioners are clearly not easing. Indonesia needs development funds, which continue to increase from year to year. More than 70 percent of development financing so far has come from the banking sector and its ability is increasingly limited.

The OJK has encouraged the use of other financial resources, namely pension funds and insurance, to invest in infrastructure bonds, which are the focus of the government. The capital market is also a source of funds, and is expected to make efforts to increase the retention of incoming funds. Compared to neighboring countries such as Singapore, Malaysia and Thailand, our financial market is still lagging behind and this is an opportunity to grow.

The OJK must also be able to direct the growth of creative projects, especially with regard to digital technology.

We are aware of the Bitcoin and crowdfunding phenomena, the latter being a form of alternative finance for a project or venture by raising monetary contributions from a large number of people. While such a business model is greatly helpful, especially for startup projects that have yet to gain banks’ confidence, its management should anticipate any possible deviation and misuse, as well as consumer protection, without discouraging opportunities for financial services innovation.

We hope that DPR Commission XI will perform their duties objectively in selecting members of the OJK\'s Board of Commissioners and prioritize national interests, to silence the skewed voices that have been raised against the competence and integrity of the DPR.