Indonesia’s Financial Services Authority OJK cautious on ‘banking conglomeration’

OJK cautious on ‘banking conglomeration’

The Jakarta Post, Jakarta | Business | Fri, June 20 2014, 8:49 AM

The Financial Services Authority (OJK) will closely supervise what it calls “banking conglomeration”, in which several lenders also operate other businesses either in banking or non-banking sectors.

OJK deputy commissioner Endang Kusulanjari cited Bank Mandiri as an example, saying that the state lender also ran an insurance business through Axa Mandiri and Mandiri Sekuritas, its securities company. According to her, several lenders not only run business in other sectors but some of them also own shares in other banks.

“The OJK will prepare an integrated supervision system. Potential risks will be monitored through the parent company and the subsidiary as well,” she said in Medan, North Sumatra, on Thursday. The integrated supervision system would be implemented as soon as January next year, Antara news agency reported.

Based on OJK findings, most of the irregularities in the banking industry involve fictitious credit (50 percent), funding (24 percent), a change in fund allocation (15 percent). The findings happened to either parent companies or subsidiaries.



About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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