PRIME NEWS POST 

The INDONESIAN , (Jakarta)— Discussions regarding the revision of the Law on Development and Strengthening of the Financial Sector (UU P2SK), particularly concerning the funding scheme for the Financial Services Authority (OJK), have once again sparked public attention. The proposal to fund OJK not through levies on financial service providers but via sources connected to the state budget has opened serious debate regarding the future independence of the financial sector supervisory agency.

The General Chairman of the Business Integrity Study (KIU), Teuku Z. Arifin, emphasized that changing OJK’s funding model must not be done hastily merely as an evaluation response to several oversight cases in the financial sector. According to him, the main issue to safeguard is not merely who provides the funding, but how to ensure OJK remains a professional, integrity-driven authority, free from political and economic interests.

“We must ensure that this revision does not merely shift OJK’s dependency—from being potentially vulnerable to industry influence to becoming vulnerable to political budget pressures. If that happens, the essence of OJK’s independence will actually regress,” said Arifin on Tuesday (14 April 2026).

The discourse regarding government funding for OJK emerged amidst intense discussions on the P2SK revision between the House of Representatives (DPR) and the government. Besides the funding model, the revision is also reported to cover other issues, such as the mechanism for appointing officials at Bank Indonesia, OJK, and the Deposit Insurance Corporation (LPS) without a selection committee, interim term periods, and stock exchange demutualization.

In KIU’s view, the proposal to fund OJK through the State Budget (APBN) may initially be seen as an effort to break potential conflicts of interest between the regulator and the industry it supervises. However, Arifin warned that this approach carries new, equally serious risks—namely opening gaps for political intervention through budget mechanisms, institutional approvals, and relations with the DPR and the government.

“When a supervisory agency becomes deeply embedded within the state budget orbit, it simultaneously enters the political negotiation orbit. This must be clearly understood. OJK is a pillar of trust in the financial sector. If its independence is perceived as shaky, the impact will not only affect the institution itself but also the sense of security for investors, market players, and the public as consumers,” he stated.

Arifin acknowledged that evaluating OJK’s performance is valid and necessary, especially following public scrutiny over financial sector supervision, ranging from online loans, insurance, pension funds, to capital market dynamics. However, he argued that supervisory weaknesses should not be resolved with formulas that could increase the political burden on the oversight body.

For him, the source of funding is not the only parameter of independence. Far more important is building a system that ensures decision-making within OJK is accountable, transparent, and firm against violations.

“Independence is not merely about the funding source, but about the institutional character. Whoever provides the funding, OJK must remain capable of acting objectively, courageously, and consistently. Therefore, improvements must be directed toward strengthening governance, internal control, leadership quality, and the courage to enforce regulations,” Arifin explained.

KIU also expressed concern over plans to abolish the selection committee mechanism for filling strategic positions at BI, OJK, and LPS. According to Arifin, this move could reduce public participation space and limit transparency in the recruitment process of financial institution officials.

He believes that an open selection process is not just an administrative procedure, but part of the checks and balances mechanism to ensure strategic positions are not filled solely based on political proximity or power preferences.

“If the selection committee mechanism is removed, the public has the right to ask: where is the accountability, where is the integrity assessment, and how can we ensure that the resulting officials are truly independent? In an institution like OJK, public trust is built not only from performance but also from how its leaders are chosen,” he said.

Furthermore, KIU reminded that the financial sector is highly sensitive to market perception. Therefore, any regulatory changes concerning OJK must be assessed not only from a technical perspective but also regarding their impact on investor confidence, financial system stability, and consumer protection.

Arifin emphasized that KIU fundamentally supports regulatory improvements in the financial sector, provided the revision aims to strengthen institutional integrity rather than expand control over independent bodies.

“KIU’s stance is clear: the P2SK Law revision must strengthen, not weaken, the dignity of OJK’s independence. The state may evaluate, the DPR may correct, but the financial watchdog must not lose its healthy distance from political pressure. Regulatory integrity is the foundation of market trust, and market trust is the fortress of national economic stability,” Arifin stated.

Amidst the tug-of-war in the P2SK revision discussions, KIU urges the government and DPR to prioritize the long-term interests of the national financial system over short-term gains. According to Teuku, what is at stake is not just the funding design of one institution, but the credibility of Indonesia’s entire financial supervisory architecture.

#@Reported from8 various media sources //photo from Google documents // contribution by Prime News Post international online media // news.paper
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