Cooperative Minister: Cooperative Bill will establish supervisory authority
The Minister of Cooperatives, Ferry Juliantono, stated that the government will establish a dedicated cooperative supervisory authority through the Draft Law (RUU) on Cooperatives, which is currently being discussed with the House of Representatives (DPR RI).
During a public discussion for the Pre-National Congress of Syarikat Islam in Jakarta on Monday, Ferry explained that such an authority is necessary so that cooperatives possess their own supervisory body rather than being integrated into the Financial Services Authority (OJK) oversight mechanism.
“God willing, in the new Cooperative Law, there will be a cooperative supervisory authority because we do not want to fall under the OJK; we will have our own authority,” said Ferry.
In addition to supervision, the government is also preparing protections for public deposits within savings and loan cooperatives.
Ferry noted that he has met with the Chairman of the Indonesia Deposit Insurance Corporation (LPS), Anggity Abimanyu, and they have agreed on a plan to protect public deposits in cooperatives through the LPS.
According to him, deposit protection is essential because, to date, cooperatives have lacked an independent supervisory authority, and public deposits in cooperatives have not received the same level of protection as bank deposits.
“We are struggling to compete with the banking sector. Therefore, God willing, in the new Cooperative Law, there will be a cooperative supervisory authority, and we want a deposit insurance institution that can protect public deposits held within cooperatives,” Ferry added.
Ferry believes that strengthening supervision and deposit protection will increase the competitiveness of cooperatives against banks.
The Cooperative Bill is targeted for enactment into law this year to replace Law Number 25 of 1992 concerning Cooperatives. Ferry remarked that the current regulations are no longer adequate to serve as a foundation for the development of cooperatives in Indonesia.