OJK Policy on Bank Business Plans Expected to Strengthen Banking Independence

Banking must remain independent in determining its business strategies. Banks are not merely policy instruments but business entities that must be managed professionally.

Jakarta (ANTARA) - The Financial Services Authority (OJK) policy that does not require banks to channel financing to government priority programmes is expected to strengthen banking independence.

Financial consultant and planner Elvi Diana opined that the affirmation contained in the revision of the Bank Business Plan (RBB) regulations is an appropriate step and aligns with the basic principles of the banking industry.

“Banking must remain independent in determining its business strategies. Banks are not merely policy instruments but business entities that must be managed professionally,” said Elvi in a written statement in Jakarta on Friday.

She emphasised that banking operations must be based on prudential principles and risk management. In this context, the obligation to directly support government programmes is feared to disrupt the bank’s objectivity in assessing creditworthiness.

Furthermore, Elvi explained that the bank’s capital structure is also an important factor that needs to be considered to avoid systemic risks that pressure the banking sector.

On the other hand, she also reminded that the policy to abolish the OJK’s Financial Information Service System (SLIK) for debtors with loans under Rp1 million needs to be implemented in a measured manner.

The implementation of that policy is still considered necessary through proof that the relevant debtor has settled the debt or has no further involvement with the bank or any financial institution.

“If there is no verification process, there will be a risk of moral hazard, where debtors feel they can escape obligations. Even the potential for systemic losses to the banking industry exists if there is no such verification,” she stated.