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View all search resultsOJK looks to PFII for local banks to expand their services
The Financial Services Authority (OJK) has proposed implementing universal banking in the planned Indonesia International Financial Center (PFII) to streamline business licensing and boost the country’s investment appeal.
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On the rise: High-rise buildings are illuminated by the sunset on Aug. 2, 2024, in the Sudirman Central Business District (SCBD) in South Jakarta. (Reuters/Ajeng Dinar Ulfiana)
T
he Financial Services Authority (OJK) has proposed implementing universal banking in the planned Indonesia International Financial Center (PFII) to streamline business licensing and boost the country’s investment appeal.
The move could help to make the country’s financial sector more competitive, analysts say, but many local banks are not yet ready.
During a hearing with House of Representatives on July 8, OJK chief executive for banking supervision Dian Ediana Rae said regulating universal banking in the financial center could serve as “one of the instruments to attract international investment while maintaining prudence and risk management principles”.
According to the OJK, universal banking allows banks to integrate commercial and investment banking, enabling them to offer various financial services, including deposits, credit disbursement, payments and settlements, securities underwriting, asset management and financial consulting.
Dian described universal banking as a "one-stop service" to provide an integrated permit system for all sectors, including banking, insurance and capital markets.
He noted that the revised Financial Sector Development and Strengthening (P2SK) Law laid the legal groundwork for the model, even though it does not explicitly mention universal banking.
“In our view, it would be more efficient if universal banking were implemented there [in the planned PFII], so that each company wouldn’t have to operate separately in its own line of business,” he said.
