Day: January 10, 2023

The Financial Services Authority (OJK) has described the banking industry’s strong and stable performance in 2022 as a glimmer of hope amid global economic turmoil.

“The OJK is optimistic that banking conditions will be maintained and will support national economic growth, although risks need to be watched out amid global uncertainty, which could impede economic growth,” chief executive of banking supervision at OJK Dian Ediana Rae said in an official statement received here on Tuesday.

According to the OJK, in November 2022, bank loans grew 11.16 percent year on year (yoy) while third-party funds (DPK) swelled by 8.78 percent yoy.

The growth rate of credit and third-party funds exceeded the rate recorded prior to the pandemic, with maintained banking risk indicators. Good development in banking was also reflected in ample liquidity conditions, as reflected in the LA/NCD and LA/DPK ratios of 134.97 percent and 30.42 percent, respectively.

Bank capital was also relatively strong, with a capital adequacy ratio of 25.49 percent, and was believed to be able to withstand risks. Credit risk tended to decline, as reflected in the gross and net NPL ratios of 2.65 percent and 0.75 percent, respectively, while loans at risk were capped at 15.12 percent.

“The reduction in credit risk is partly due to the improved quality of restructured credit due to the impact of COVID-19,” he pointed out.

Despite the current financial system stability, he warned that banks must be cautious of risks amid the global turmoil, which could compromise economic growth, such as the scarring effect of the COVID-19 pandemic, increased yields on commercial paper, potential depreciation of the rupiah, and decreased liquidity.

The OJK will gear future banking policies toward the improvement of banking regulation and supervision as well as the development of a healthy, efficient banking industry with integrity.

“OJK will continue to improve the early warning system supported by information technology so that it can detect financial problems and other aspects earlier and take early supervisory measures before these problems drag on and become (serious),” he said.

It will also continue banking consolidation, particularly that of sharia banking, Regional Development Banks, and rural banks.

This would be pursued through the establishment of Integrated Bank Business Groups (KUB), with large banks serving as holding banks that can meet liquidity and capital needs and form synergy for developing banking products and services, improving governance and infrastructure on technology and human resources, as well as increasing the customer base.

Source: Antara News

Governor of East Java Khofifah Indar Parawansa is encouraging efforts to expand the market of micro, small, and medium enterprises (MSMEs) in a bid to boost post-pandemic economic recovery in the province.

“So far, efforts have been made to expand East Java’s MSME market, even reaching the overseas segment. However, there are still many opportunities and potential that can be maximized,” she said during a meeting with representatives of ride-hailing firm Grab Indonesia at Grahadi State Building here on Tuesday.

According to her, joint efforts to seek processes that can give wider market access to MSMEs must be pursued.

The former Social Affairs Minister emphasized that post-pandemic economic recovery requires synergy among all parties. Each element can take a role, according to their respective expertise and field, she said.

“Our export opportunities are big. However, we need strengthening so that they (MSMEs) do not just sell but can also market and develop overseas,” she added.

The provincial government of East Java has cooperated with Bank Indonesia to set up the Curation House for MSME players, which is aimed at achieving the standardization of product quality so that products made by MSMEs can be exported.

“This is essential because we can educate and invite the community to be smarter in trading. We convey to MSME players that exports are easy, not complicated, to make them have a progressive mindset and be more enthusiastic,” she said.

According to the governor, Grab Indonesia is in one of the business sectors that have a big role in bridging MSME access to bigger markets.

She even noted that the insight data of Grab Indonesia can be used as a basis for the development of MSMEs in East Java.

Source: Antara News

The Indonesian government has not been idle in tackling corruption, but has worked silently to eradicate it, Coordinating Minister for Politics, Law, and Security Affairs Mahfud MD said here on Tuesday.

“The government is certainly not idle. It can be said to be soundless, but while taking measures (eradicating corruption),” he added.

The minister said that rampant corruption cases are a sign of a decline in democracy. Corruption eradication has not been easy to achieve since long ago because of the judicial mafia, he said.

“The courts are still full of mafia. Before the New Order era, it was called the judicial mafia, but during Mr. SBY’s (Susilo Bambang Yudhoyono’s) era, the name was changed to legal mafia,” he noted.

He said the judicial mafia was later known as the legal mafia because they were involved in all sectors of legal development.

“So, those who created laws were corrupt, those who carried those out were corrupt, those who passed judgments were also corrupt,” he added.

Moreover, corruption was not easy to resolve because of political configurations arising from the democratic system, he added. For example, corruption started from politicians who were elected democratically, and opportunities for corruption were sometimes exploited through democratic means as well.

He noted that at times, there were political interventions through democracy, such as a House of Representatives member calling for someone’s release or handing a project to someone, or pressuring law enforcement personnel to do this or do that.

And everything played out because of the protection of democratic institutions, wherein the people within took part in the democratic process, he added.

Even so, he opined that the democratic system is still considered the best guideline for governance, thus what needs to be fixed is the trappings of political configurations.

“(Like we did) During the 1998 reform, let’s build democracy, democratize in the life of the state so that governance (becomes) good, avoids KKN (corruption, collusion, and nepotism). Our choice is always democracy, so don’t think of another system,” the minister said.

Therefore, what is necessary is the development of a political configuration that is more conducive to good governance in order to address the challenges of democracy for realizing Indonesia’s sustainable development.

“In my opinion, our problem is on building a political configuration, which is more conducive to good governance, not democracy, which acts as a path for corruption instead,” he added.

Source: Antara News