Authorities Responsible for Overseeing Indonesian Banks
BI and Otoritas Jasa Keuangan (OJK) are the foremost authorities which oversee Indonesian banks. In 2013, the OJK through Law No. 21 of 2011 assumed control of the regulatory and supervisory functions of the financial services sector of Indonesia. This sector includes the banking functions of BI.
Banks of Indonesia are subject to supervision under BI and obliged to report about foreign loans and the influx of foreign currency to BI. Other than BI and OJK, there are several other authorities which are involved in overseeing bank regulation in Indonesia. These are the Financial Transaction Reporting and Analysis Center (PPATK) as well as the Indonesian Deposit Insurance Institution (LPS). The OJK, BI, PPATK, and LPS work together in order to keep a watch over the various functions of banks as they relate to areas such as credit cards, foreign exchange, deposits, and withdrawals, among others.
Common Violations of Bank Laws in Indonesia
The government of Indonesia has created several new regulations which concern banking laws. It has also begun to punish people who are found to be in violation of these new laws. Some of the common violations of bank laws in Indonesia include instances which involve exporters who do not keep foreign exchange earnings from natural resources in Indonesian banks. According to current bank laws existing in Indonesia today, the exporters need to keep their foreign exchange earnings earned via natural resources in the Indonesian banks. Another common violation of Indonesian bank laws is that of carrying excessive amounts of foreign banknotes while crossing the border. One of Indonesia’s banking laws today limits the carrying of foreign banknotes into the country on behalf of either Indonesian citizens or foreigners. Some banks have even committed the offense of leaking of depositors’ personal data. This offense causes a bank’s senior managers to be held equally responsible for the same. Banks are only allowed to share the personal data of customers when such is required by a government agency or court.
Punishments for Misbehaving or Errant Banks in Indonesia
If one or more senior management employees of any Indonesian bank has committed a misdemeanor or indulged in any suspicious activities, there will be suitable punishments imposed. According to Law No. 7 of 1992 as amended by Law No. 10 of 1998, the directors, commissioners, and employees of the bank in question may be subject to a fine of between five billion and 100 billion rupiah, imprisonment for a term of anywhere between three and eight years, or both. Staff members will be punished in either of these ways if they fail to operate the banking system in a proper manner. If bank employees violate the bank’s secrecy rules, the employees in question will be fined 200 billion rupiah.
The banking laws and regulations of Indonesia control and monitor all banking affairs in the country. The banks of Indonesia have to abide by these rules so that the money of individuals and companies will be kept safe. The banking laws of Indonesia have done much to improve the condition of the country’s many banks.