Bankers Propose Staggered Replacement of BI, OJK, and LPS Leadership, Here's Why
The National Bankers Association (Perbanas) and the State-Owned Banks Association (Himbara) have proposed that the tenure arrangements for the leadership of Bank Indonesia (BI), the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS) adopt a staggered term mechanism. This proposal was made during a Public Hearing (RDPU) on the Draft Law (RUU) amending Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK).
Under this mechanism, members of the Board of Governors (ADG) or Board of Commissioners (ADK) could serve a maximum of two terms, each lasting five years. Thus, the maximum leadership tenure for BI, OJK, and LPS would be ten years.
Vice Chairman of Perbanas, Nixon L.P. Napitupulu, stated that the mechanism is needed to ensure leadership transitions occur gradually and in a controlled manner. Additionally, he emphasised the importance of maintaining long-term strategic programmes with accountable individuals to execute transitions effectively.
“Because if everyone is appointed and then everyone leaves at once, there will be issues with continuity or going concern,” said Nixon at the RI House of Representatives Building on Monday (5/4/2026).
Most importantly, said Nixon, the institutions should not lose institutional memory all at once. He then referred to the practice of this mechanism already in place at BI.
“So we request that it be maintained, the continuity is preserved, not every time there’s a change where everything suddenly shifts. That’s what we also want to happen in the financial industry,” said the BTN President Director.
On the same occasion, Eko Setyo Nugroho, representing Himbara, conveyed that state-owned banks view the staggered term mechanism as providing reinforcement in the leadership replacement process. According to him, without this mechanism, simultaneous leadership changes could potentially cause disruptions in organisational balance, both in decision-making processes and in maintaining consistent policy directions. Additionally, collective replacements could optimally distribute knowledge and experience transfer processes.
“On the contrary, with the implementation of staggered terms, the leadership regeneration process can occur more gradually and manageably. This allows the stability of decision-making functions to be maintained, while ensuring the continuity of policy directions and strategic programmes across periods,” explained the BNI Institutional Director.
On the other hand, added Eko, this mechanism also strengthens the continuity of institutional memory, making the transfer of knowledge and experience more effective within the organisation. Thus, he stated that the implementation of staggered terms becomes an important instrument in maintaining institutional continuity without reducing the dynamics of leadership renewal.
In the staggered term system, ADK/ADG members start and end their terms at different periods. For example, the DK Chairman and ADK B begin their terms in 2026, ADK A and ADK C in 2027, and ADK D in 2028. Thus, leadership replacements will occur gradually.