Govt urged to delay FSAI

The Jakarta Post, Jakarta

The Indonesian Public Companies Association (AEI) is urging the government to postpone for at least a year the establishment of the Financial Services Authority Institution (FSAI) while additional preparations are completed.

The government plans to introduce the FSAI in 2004. This powerful institution would take over from Bank Indonesia the supervision of banks, as well as the tasks of the Capital Market Supervisory Agency (Bapepam).

Apart from that, the institution would also supervise other service-based financial businesses, such as insurance, pension funds and securities.

But AEI said in a press release on Wednesday more time was needed to make more complete preparations, adding that hasty preparation would create various technical problems in the future, such as a lack of qualified personnel and effective coordination.

"Not to mention the funding problems. It's hard enough for the industry nowadays without having to allocate a sum of money to finance the supervision," the release said.

Under a draft law currently being prepared by the government as the legal basis for the FSAI, the funding for the association would not come from the state budget but from the industry.

The impetus to set up the FSAI came amid increasing challenges facing the financial services industry in the fast-changing global economy.