OJK launched the "Master Plan for the Indonesian Financial Services Sector (MPSJKI) 2021-2025" at the 2021 Financial Services Industry Annual Meeting. This master plan is expected to help in overcoming the short-term challenges of the COVID-19 pandemic and the structural challenges in realizing a national financial services sector that is competitive, contributive, and inclusive. The key priorities covered in the master plan include strengthening the resilience and competitiveness of the financial services sector, accelerating digital transformation in the financial services sector, and development of the financial services sector ecosystem.
At the annual meeting, it was highlighted that MPSJKI 2021-2025 will focus on the following five priorities:
- Supporting National Economic Recovery Program. OJK has extended the restructuring policy applied to debtors affected by the pandemic until March 2022. Incentives offered for "MSMEs," including interest subsidies from the government, will continue to be facilitated, as will the guarantee program for MSME and corporate loans. In 2021, additional stimulus policies to promote national economic recovery will also be rolled out.
- Strengthening resilience and competitiveness of financial services sector. OJK plans to accelerate consolidation in the financial services industry. It also requests the industry to continue to pay close attention to capital adequacy, including by establishing additional Allowance for Impairment Losses (CKPN) to anticipate deteriorating credit quality. OJK plans to strengthen the implementation of governance and risk management through several policies, which include Investment Limitation and Large Fund Provision, Improvement of Capital Regulations, and Determining Status and Supervisory Follow-Up (Exit Policy).
- Developing financial services sector ecosystem. OJK plans to continue its efforts to deepen financial markets, maintain market integrity, and increase capital market inclusion by including retail businesses as investors and issuers to support development financing. This will be done by facilitating the issuance of various securities, including regional bonds, development of derivative instruments, and market infrastructure. OJK will also work toward implementation of the Sustainable Finance Roadmap Phase II for 2021-2025.
- Accelerating digital transformation in the financial services sector. OJK encourages the digitization of products and business processes in the financial services industry, including granting permits for digital banks. OJK will focus on strengthening prudential rules for fintech peer-to-peer lending (P2P lending). OJK also intends to prepare a complete Islamic financial product ecosystem, including digitizing Sharia products, increasing the scale of the Sharia financial business, and expanding public access to Islamic financial products with various policies.
- Strengthening internal capacity through improvements in supervisory approaches and infrastructure. OJK plans to develop integrated supervision of all financial service products, including digital products, and monitor potential risks originating from outside the financial services sector and corporate companies. OJK plans to improve governance in internal business processes.
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Keywords: Asia Pacific, Indonesia, Banking, Securities, COVID-19, Digitalization, Sustainable Finance, ESG, Credit Risk, Loan Guarantee, Regulatory Capital, Fintech, Governance, Operational Risk, Workplan, Islamic Banking, Digital Banks, OJK
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