Parliament Proposes Optional Selection Committee for OJK and LPS Leadership, Here's the Reason

The selection committee for leaders of the Financial Services Authority (OJK) and the Deposit Insurance Corporation (LPS) has been proposed to be optional. This proposal was discussed during the General Hearing Meeting (RDPU) on the Draft Law (RUU) amending Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK).

Deputy Chairman of Commission XI of the Indonesian House of Representatives, Fauzi Amro, stated that the background is the dynamics in the financial sector that can arise suddenly, while the market requires quick certainty. He referred to the turmoil in the capital market last February, which ultimately impacted the resignation of three OJK Commissioners.

“The principle is we agree with the selection committee, but it should be optional. If the conditions are normal, well, everyone knows that in normal conditions, the mechanism runs normally. But the incident with OJK last time where three resigned, including the deputy chairman and others, that created such an extraordinary market shock and required certainty,” said Fauzi after the RDPU on the P2SK Bill at the DPR Building, Monday (6/4/2026).

Therefore, he said the Indonesian House of Representatives proposes that the selection committee be optional. In the mechanism for selecting OJK/LPS Commissioners without a selection committee, the President of Indonesia would directly issue the letter.

“As for the DPR, in principle, the process is approval. When a letter from the government, a letter from the president comes to the leadership, the leadership delegates to the Bamus (Consultative Body), the Bamus delegates to the commission, the commission discusses it,” explained Fauzi.

He emphasised that this option is intended for emergency situations that require immediate certainty.

According to Fauzi, the boundaries between “emergency” and “normal” conditions will be explained in the new regulation.