Indonesia mulls returning banking regulation to central bank

The president is reportedly unhappy about the Financial Services Authority's performance.

Indonesian President Joko Widodo is contemplating returning banking regulation to the central bank’s remit due to concerns about how the pandemic is unveiling stresses in the financial sector, reports Reuters.

Until end-2013, Bank Indonesia (BI) served as regulator and supervisor of banks in the country. The president has been thinking about giving the role back to BI due to dissatisfaction about the Financial Services Authority’s (OJK) performance during the pandemic.

Indonesia is now looking at the French structure, which has an independent administrative authority under the central bank which oversees banking, one of the people said.

The development comes as the government negotiates central bank help to fund a fiscal deficit that is ballooning due to its COVID-19 response.

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