Indonesian court upholds appeal over banking regulator
(7 August 2015 – Indonesia) The challenge to the mandate of Indonesia’s financial regulator to supervise the banking industry has be quashed by the constitutional court.
On 5 August, the court upheld an appeal against the definition of independence of the Financial Services Authority, removing a clause that keeps it “free from intervention from other parties,” Judge Arief Hidayat said in a ruling in Jakarta.
The court rejected other elements of the challenge, including the regulator’s ability to charge a fee to banks.
The regulator, known as the OJK, took over supervision of lenders from the central bank last year under a 2011 law on financial institutions.
The constitutional court, whose verdict is final and can’t be contested, assessed the appeal against articles of the law in a challenge to the definition, authority and fees of the regulator.
The plaintiffs bringing the case were Salamuddin Daeng, a researcher at Indonesia For Global Justice, and lawyers Ahmad Suryono and Ahmad Irwandi Lubis, according to the case’s legal adviser Syamsudin Slawat Pesilette.
They were looking for either the dismissal of the OJK, the return of banking supervision to Bank Indonesia, or for OJK fees to be paid to the state budget.
Bank Indonesia governor Agus Martowardojo said just before the ruling that he believed the law giving the OJK the right to regulate banks was good.
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