BI needs capable deputy: Analysts
BI needs capable deputy: Analysts
Dadan Wijaksana, The Jakarta Post, Jakarta
As the country's banking sector is gearing up for major changes, President Megawati Soekarnoputri should be cautious in selecting figures to be nominated to fill the post of senior deputy governor at Bank Indonesia (BI), which is soon to be vacant, experts said on Sunday.
Whoever fills the post, he or she should be capable of leading the industry through the transition period.
Not only should he or she possess basic qualifications as a central banker, including strong managerial skills and a thorough knowledge of monetary and banking policy, the person should also gain the confidence of the banking sector, which is currently entering a critical period, said economist Dradjad Wibowo and legislator Max Muin.
Anwar Nasution will end his tenure as BI senior deputy governor on May 17.
Under the BI Law, the President must propose between three and five nominees to the House of Representatives at least three months before the tenure expires, meaning the candidates should be proposed before Feb. 17.
"With the banking sector now embarking on major programs, whoever fills the post should be market-friendly and have the ability to lead the banking sector through all that," Dradjad told The Jakarta Post over the weekend.
The programs are the restructuring of the country's banking sector based on the newly released Indonesian Banking Landscape and the plans to establish a Deposit Insurance Agency (LPS) and Financial Services Authority (LOJK).
The Landscape is a blueprint for the banking sector to be implemented in stages over the next 10 years, with the main aim being to build a sound, strong and efficient banking system. It is based on the assumption that a resilient banking system is a key element in promoting economic growth and supporting the stability of the financial system.
The program raises banks' minimum capital requirements in the next seven years from the current Rp 10 billion (about US$1.2 million) to Rp 100 billion.
Currently, there are 138 banks operating in the country, 55 of which have a capital below the new requirement, the central bank data showed.
"This is a huge project, as it could lead to massive bank mergers in years to come. That's why whoever is on BI's board of governors, especially the governor and senior deputy governor, should enjoy support from the banking sector," Dradjad added.
Sharing Dradjad's view, Max, a member of House Commission IX on financial and banking affairs which overseas the election process, said: "Whoever is elected has to be able to work with the BI governor and other officials at the central bank to send signals to the market that they can form a solid partnership to get through difficult times."
The two, however, refused to mention names, saying it was up to the President.
But, some names have already been circulating, such as Miranda S. Goeltom (former BI deputy governor), economist Sri Mulyani, Syafruddin Temenggung (current IBRA chairman), and Anwar himself. By law, Anwar is still eligible to be nominated and elected for another five-year term.
The law also says that the House must decide in three weeks whether to select the winning candidate, or reject all the nominations proposed by the President, through a fit and proper test.
If the House rejects the nominees, the President has to submit new names.