The judicial review hearing of Law No. 21 of 2008 on Sharia Banking to hear the OJK as Relevant Party, Monday (9/5/2022). Photo by MKRI/Ifa.
Monday, September 5, 2022 | 15:24 WIB
JAKARTA (MKRI)—The OJK (Financial Services Authority) encouraged optimization of fund transfers by BPRs (microcredit banks) and BPRSs (sharia microcredit banks) through the use of information technology facilities and collaboration with other institutions, following the second pillar of the BPR and BPRS Roadmap—Acceleration of Digital Transformation.
This statement was made by Deputy Commissioner for Law and Investigation Rizal Ramadhani on behalf of the OJK at the judicial review hearing of Law No. 21 of 2008 on Sharia Banking in the Constitutional Court (MK) on Monday, September 5, 2022. The case No. 32/PUU-XX/2022 was filed by PT Bank Pembiayaan Rakyat Syariah Harta Insan Karimah Parahyangan (BPR Syariah HIK Parahyangan).
“It is necessary to optimize services for BPR and BPRS customers, especially fund transfers through the use of information technology infrastructure. Fund transfer is a basic bank activity that has become a daily necessity for the community. BPRs and BPRSs that meet the requirements are allowed to have electronic banking services, such as mobile banking and internet banking, as well as to provide access to sources of funds for payments in the form of payment instruments such as Automated Teller Machines (ATM) and debit cards, in accordance with the [OJK Regulation] on BPR and BPRS products,” he said before Chief Justice Anwar Usman and the other eight constitutional justices.
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Rizal added that BPRs and BPRSs could collaborate with institutions other than commercial banks to support fund transfers, such as payment gateway operators, fund transfer providers, electronic money and/or wallet providers, or information technology service providers (PJTIs). To optimize fund transfer activities, BPRSs still need to pay attention to the provisions of the legislation and ensure risk mitigation measures over the collaboration and over risks related to the information technology system.
“In line with the BRP-BPRS roadmap, the BPRS industry will continue to receive support to grow dynamically, taking into account the development of business and information technology as well as the needs of the community, especially MSEs. The OJK continues to make efforts to improve policies and regulations, including by coordinating with other authorities in order to encourage the development of the BPRS industry,” Rizal stressed.
Therefore, he added, participation in payment system traffic can actually be done through consultation with commercial banks or other financial service institutions. If the Petitioner wished to be able to carry out direct payment traffic business activities, as a BPRS it can make upgrades to become a BUS so that its soundness level is maintained, the risk of liquidity mismatch and other risks can be mitigated, and that it is able to have reliable information technology which, if used, will maintain public trust.
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Rizal also explained that the revocation of a sharia bank’s business license is carried out by the OJK by request from the Deposit Insurance Agency (LPS) after the OJK hands over a list of unhealthy sharia banks to the LPS. The revocation can also be based on request by the bank itself after it has completed all of its obligations. Before the OJK declares a sharia bank irredeemable, it has experienced difficulties that can no longer be overcome by any follow-up actions.
“If the Petitioner argues that the prohibition as regulated in Article 25 letter e of the Sharia Banking Law has kept the BPRS from having sustainable life, it is necessary to revisit the reasons for the OJK to declare a BPRS as a bank experiencing difficulties that endanger its business continuity,” Rizal explained.
Also read: Ban Against BPRSs in Payment Traffic Affects Services to Customers
Rizal explained that the revocation of the BPRS’ business license is not solely due to capital issues, but it could be that its management is not prudent and sound. This is in line our data, which shows that from 2016 to 2021, eight BPRSs had their business licenses revoked and it was because their management was not carried out based on the principles of prudence and sound banking, and that there was fraud by their officials or employees. In none of these cases did they fail to survive in a healthy business competition.
“Article 25 letter e of the Sharia Banking Law is an effort to protect the sustainability of BPRSs and customers and other parties who have legal relationships with said BPRSs. Thus, the Petitioner’s view in response to the prohibition norm in Article 25 letter e of the Sharia Banking Law was inaccurate because it is not an attempt by the state to prevent a BPRS from obtaining capital sources from other BPRSs, but the state’s effort to protect BPRSs and the wider community as a whole. Moreover, the revocation of the BPRS business license were not solely due to capital, but mismanagement and fraud (criminal acts),” Rizal explained.
Therefore, if BPRSs are allowed to participate, they must also be ready to face the challenge of increasing capital, which is required and applies in general (not only to BPRSs that make capital participation). At present, what needs to be considered is whether a BPRS is ready to increase capital for participation in another BPRS, considering that to date, based on our data, only 69% of BPRSs meet the capital requirements stipulated in the applicable laws and regulations. In the current regulation, equity participation has not been taken into account as a capital deduction factor.
Also read: BI: Not BPUG, BPRs and BPRSs Cannot Offer Payment Traffic Services
At the preliminary hearing, the Petitioner alleged that Article 1 point 9, Article 21 letter d, and Article 25 letter b of the Sharia Banking Law had had restricted or prohibited sharia microcredit banks from offering payment traffic services. Article 21 letter d stipulates that sharia microcredit banks cannot transfer money, either for their own interest or for the benefit of customers independently, but only through their accounts at sharia commercial banks, conventional commercial banks, and sharia business units (UUS).
The Petitioner asserted that restrictions and prohibitions on providing payment traffic services had kept sharia microcredit banks from optimally providing banking services to the public, especially to micro and small businesses to encourage sustainable national economic growth. Furthermore, Bank of Indonesia (BI) had established a National Payment Gateway (GPN) policy aimed at smooth, safe, efficient, and reliable national payment system, and at taking into account the increasing, competitive, and integrated developments in information, communication, technology, and innovations. However, Article 1 point 9, Article 21 letter d, and Article 25 letter b of the Sharia Banking Law have resulted in sharia microcredit banks unable to be directly connected to the GPN policy system. Therefore, the Petitioner requested that the a quo articles be declared unconstitutional.
Writer : Utami Argawati
Editor : Lulu Anjarsari P.
PR : Fitri Yuliana
Translator : Yuniar Widiastuti (NL)
Translation uploaded on 9/8/2022 11:18 WIB
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.
Monday, September 05, 2022 | 15:24 WIB 254