Economist's Warning to OJK: Governance is Key to Ensuring Safe Lending to Government Programmes
JAKARTA, KOMPAS.com - The Financial Services Authority (OJK) is endeavouring to encourage banks to channel financing to government priority programmes through regulations related to bank business plans (RBB).
Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, views this policy as risky in eroding the business world’s trust, including that of banks, in the government.
“This is what I think needs to be handled carefully. Because private actors also look at the governance of policies,” he said when met at the Mandarin Oriental Hotel in Jakarta on Monday (13/4/2026).
He further explained that policies that appear to direct banks to finance specific government programmes could potentially create perceptions of intervention in the financial sector’s business activities.
“If OJK then provides reasons for that (encouraging financing of priority programmes), the concern is that it will be perceived as interference, which could then increase risks, including for banks,” he stated.
According to him, business confidence is currently a crucial factor amid various economic dynamics. Therefore, policies that could potentially erode trust should be avoided by the government.
Instead of encouraging banks to channel financing to priority programmes, the government should use a more appropriate approach.
“So I think such directives need to be avoided. Because the concern is that it will actually erode trust. Even if it is done, at least it should not come out as a statement to support government priority programmes,” he emphasised.
Faisal also highlighted the implications of this policy on the banking sector, particularly state-owned banks grouped under the Association of State-Owned Banks (Himbara).
In the financing scheme for certain programmes, such as the Red and White Cooperatives, banks are said to be the first to bear the risks.
“Actually, if the business model is good enough, profitability is strong, and governance is sound, then there is no problem. What is in the spotlight is the governance of priority programmes, including the Red and White Village Cooperatives. Because if anything happens, of course, it is the financiers who will be affected,” he explained.
OJK Commissioner Chairman Friderica Widyasari Dewi stated that through these regulations, OJK will encourage banks to more actively support government priority programmes.
The POJK will be directed so that national banks can channel credit to the government’s strategic programmes, such as the 3 million houses programme, Free Nutritious Meals (MBG), and Red and White Village Cooperatives.
“We are designing a RPOJK for adjustments to the RBB provisions. Within that, how we support banks to also engage more with government priority programmes,” she said at the Bank Mega Tower in Jakarta on Tuesday (7/6/2026).