Squabbling over Authority at the OJK

The 2022-2027 Board of Commissioners of the Financial Services Authority (OJK) should have already been installed, with former deputy foreign minister Mahendra Siregar as the new chair. But the inauguration did not go ahead because of a breach of regulations. This is more than a simple administrative matter, because the financial industry oversight body could lose legitimacy.

It all began when the selection of the OJK commissioners was brought forward. In the two previous periods, the selection and appointment of the commissioners were planned so that the process would be finished in July, at the same time as the term of the previous officials ended. This was also in line with Law No. 21/2011 on the OJK, which states that commissioners cannot be dismissed before the end of their term in office.

But this time, the government and the House of Representatives (DPR) brought forward the process, from the selection to the fit-and-proper tests. As a result, the new commissioners were selected and appointed by the end of April, two months before the term of the previous officials was due to end. Matters became more confused because President Joko Widodo issued a presidential decision on the appointment of the new OJK leaders.

This disarray is closely linked to the disappointment on the part of the government and the DPR over the performance of the 2017-2022 commissioners, who were seen as not being forthright in their oversight of the conduct of the financial sector. This weakness from the OJK was subsequently seen in major cases such as the misuse of Asuransi Jiwasraya investments and illegal online loans.

This week’s cover story also tells about the selection process for the new directors of the Indonesian Stock Exchange (BEI) being organized by the OJK. With allegations of efforts by state officials to ensure the selection of a particular prospective director, there have been questions about OJK’s independence. These problems could have a major impact on the financial industry, which plays such an important role in the national economy.

Enjoy the magazine,

Fery Firmansyah

Main Editor

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