OJK to Tighten Supervision of BPRs, Prevent Fraud and Bank Failures

WARTAINDONESIA EN – The Financial Services Authority (OJK) will tighten supervision of People’s Economy Banks (BPRs) in 2024. This increased supervision is being taken as an effort to prevent bank failures caused by fraud.

Throughout 2023, OJK revoked the business licenses of four BPRs. All of these BPRs were declared bankrupt due to fraud by their management. This fraud included embezzlement of customer funds, abuse of authority, and granting of unfair loans.

To prevent the same thing from happening in the future, OJK will take a number of steps, including:

  • Increasing the frequency and intensity of inspections and examinations of BPRs.
  • Improving the quality of human resources (HR) of BPR supervisors.
  • Increasing law enforcement against BPRs that violate regulations.

In addition, OJK will also encourage BPR consolidation. BPR consolidation is expected to increase the economic scale and efficiency of BPRs, thereby increasing the BPRs’ resilience to risk.

Increased Frequency and Intensity of Inspections and Examinations

OJK will increase the frequency of inspections and examinations of BPRs from once a year to twice a year. In addition, OJK will also increase the intensity of inspections and examinations by conducting in-depth inspections (deep dive inspection) of BPRs with high risk.

These in-depth inspections will be conducted by OJK’s supervisory team, which consists of various departments, such as the licensing department, the compliance department, the supervisory department, and the examination department. These inspections will be conducted to detect the potential for fraud or other violations at BPRs.

Improved Quality of BPR Supervisory HR

OJK will improve the quality of BPR supervisory HR by providing training and certification to BPR supervisors. In addition, OJK will also encourage BPR supervisors to improve their competencies through formal and informal education.

This training and certification will be provided to improve the knowledge and skills of BPR supervisors in supervising BPRs. Mastery of regulations, risk analysis, and fraud investigation are some of the topics that will be taught in this training and certification.

Increased Law Enforcement Against BPRs that Violate Regulations

OJK will increase law enforcement against BPRs that violate regulations. OJK will work with law enforcement agencies to take strong action against BPRs that violate regulations.

The strong action that will be given to BPRs that violate regulations can include fines, administrative sanctions, up to the revocation of business licenses. This strong action is expected to deter BPRs that violate regulations, thus preventing fraud in the future.

Encourage BPR Consolidation

In addition to the above steps, OJK will also encourage BPR consolidation. BPR consolidation is expected to increase the economic scale and efficiency of BPRs, thereby increasing the BPRs’ resilience to risk.

BPR consolidation can be done through mergers, acquisitions, or the establishment of a BPR holding. OJK will provide support to BPRs that want to consolidate.

Increased BPR Supervision Considered Important

Increased BPR supervision is considered important to prevent fraud and bank failures. Fraud can cause significant losses for customers, so it needs to be anticipated well.

Increased BPR supervision can also improve the stability of the financial system. BPRs are one of the important components of the financial system, so their health needs to be maintained.

With increased BPR supervision, it is hoped that a stable and safe financial system can be created for the community.

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