Government Submits DIM for Cooperatives Bill, Including LPS and 'Red and White' Village Units

The government has submitted the Problem Inventory List (DIM) for the Cooperatives Bill to the House of Representatives (DPR RI), which includes provisions for establishing a Cooperative Deposit Insurance Corporation (LPS Koperasi) and developing ‘Red and White’ Village Cooperatives (KDMP). The DIM will be discussed in an internal working committee meeting, with the results to be presented at the next working meeting of Commission VI of the DPR RI. Minister of Cooperatives Ferry Juliantono stated that the fourth amendment to Law Number 25 of 1992 on Cooperatives is expected to be completed this year, as the 34-year-old law is considered outdated and in need of updating. A key focus of the bill is the creation of an LPS Koperasi to guarantee the savings of members of Savings and Loan Cooperatives (KSP) and Sharia Savings and Loan and Financing Cooperatives (KSPPS). The minister proposed that this institution be placed under the auspices of the Ministry of Cooperatives, though he noted that a joint decision with the Minister of Finance is required due to state budget implications. The government also proposed including specific chapters on the development of KDMP in the bill. The revision of the Cooperatives Law has been mandated since 2014 following a Constitutional Court ruling. While awaiting a comprehensive revision, the law was partially amended through the 2020 Omnibus Law on Job Creation and the 2023 Omnibus Law on Financial Sector Development and Strengthening. The planned LPS Koperasi will be authorised to formulate technical policies and execute deposit guarantees, aiming to restore public confidence in cooperative savings services after a spate of defaults in 2020. The bill will also regulate the establishment of an institution for licensing, regulating, and supervising cooperative savings and loan businesses, as well as address digital technology adoption, criminal sanctions, and the role of government. Deputy Speaker of Commission VI, Eko Hendro Purnomo, stated that the amendment, comprising 118 points of change, is intended to create a legal framework that makes cooperatives healthier, stronger, independent, professional, adaptive, and competitive, ultimately reinforcing their role as pillars of the national economy.