history and organization of bank indonesia

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HISTORY & ORGANIZATION OF BANK INDONESIA

Wahono Diphayana

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HISTORY OF BANK INDONESIA

In 1746, VOC in Java established De Bank van

Leening which subsequently turned into De

Bank Courant en Bank van Leening in 1752.

This was the first bank set up in the archipelago

and the pioneer the banking sector for the

following years.




On 24 January 1828, the Makasar

Administration founded a circulation bank called

De Javasche Bank (DJB). For decades this

bank was operating and developing based upon

a exclusive right of the Dutch Kingdom rulers.

Such exclusive became a act, namely the DJB

Bank Act of 1922.




The Japanese occupation virtually halted the DJB

activities and the Dutch Indies banking for a while.

During the revolution era, the Dutch Indies

Administration was confronted with the power dualism,

between the Republic of Indonesia (RI) and

Nederlansche Indische Civil Administrative (NICA).

Likewise, the banking institution was divided into two,

DJB and other Dutch Banks in the NICA territories, and

“Jajasan Poesat Bank Indonesia” and Bank Negara

Indonesia in the Republic of Indonesia’s territories.




The Round Table Conference in 1949 ended the

clashes between Indonesian and Holland. As a

result, DJB was determined as the Central Bank

for the Republic Indonesian Serikat (RIS).

This status remained until the return of the

Republic of Indonesia to the unitary state.

Afterwards, as sovereign nation and state, the

Republic of Indonesia nationalized its Central

Bank. As from 1 July 1953, DJB became Bank

Indonesia as the Central Bank for the Republic

of Indonesia.




A new chapter in the history of Bank Indonesia

as an independent central bank was initiated

when a new Central Bank Act, the UU No.

23/1999 on Bank Indonesia, was enacted on

May 17, 1999 and have which has been

amended with UU No.3/2004 on January 15,

2004. The Act confers it the status and position

as an independent state institution and freedom

from interference by the Government or any

other external parties.


http://www.bi.go.id/en/tentang-bi/uu-bi/Contents/Default.aspx












As an independent state institution, Bank

Indonesia is fully autonomous in formulating and

implementing each of its task and authority as

stipulated in the Act.

External parties are strictly prohibited from

interfering with Bank Indonesia's implementation

of its tasks, and Bank Indonesia has the duty to

refuse or disregard any attempt of interference

in any form by any party.




Such unique status and position are necessary

so that Bank Indonesia can implement its role

and function as monetary authority more

effectively and efficiently



BANK INDONESIA AS A LEGAL ENTITY

Whether as a public legal entity or as civil legal

entity, the position of Bank Indonesia is

regulated by the statutes.

As a public legal entity, Bank Indonesia has the

authority to issue policy rules and regulations,

which are binding to the public - at - large.

As a civil legal entity, Bank Indonesia is able to

represent itself in and outside the court of law.



THE ORGANIZATION OF BANK INDONESIA



BOARD OF GOVERNORS

Appointment and Dismissal of Board of

Governors

In implementing its duties and responsibilities, Bank

Indonesia is managed by the Board of Governors. The

Board is led by a Governor who is assisted by a Senior

Deputy Governor as the Vice-Governor, and at least four

and not more than seven Deputy Governors.

The Members of the Board of Governors shall be appointed

for a term of office of 5 (five) years and may be reappointed

to the same position for no more than 1 (one) subsequent

term of office.



BOARD OF GOVERNORS


Governors

The Governor, Senior Deputy Governor, and Deputy

Governors shall be proposed and appointed by the

President with the approval of the House of

Representatives. Candidates for Deputy Governor shall be

proposed by the President pursuant to a recommendation

of the Governor (vide Article 41 Act No.3, year 2004

amandment to Act No.23, year 1999).



BOARD OF GOVERNORS


Governors

A member of the Board of Governors may not be dismissed

during his or her term of office, unless the person are

resigns, convicted of a felony, unable to attend in person for

a period of 3 (three) consecutive months without

reasonable cause, is declared bankrupt or unable to settle

liabilities to creditors, or is permanently incapacitated.



BOARD OF GOVERNORS

Decision Making Process

As the Bank’s highest decision making forum, the Board of

Governors Meeting is conducted at least once every month

to deliberate and to decide on general policy on monetary

affairs, and at least once a week to evaluate policy

implementation or to decide on other strategic and principle

policy.

The Board’s decision making process puts emphasis on

deliberations - to reach - agreement. When deliberations fail

to produce an agreement, the Governor will exercise his

authority to decide for the Board



BOARD OF GOVERNORS PROFILE

Governor : Agus D.W. Martowardojo

Senior Deputy Governor : Mirza Adityaswara

Deputy Governor : Ronald Waas



BOARD OF GOVERNORS PROFILE

Deputy Governor : Perry Warjiyo

Deputy Governor : Hendar

Deputy Governor : Erwin Rijanto



ORGANIZATION STRUCTURE OF BI



BANK INDONESIA ACTS

1. Acts Nr. 6 / 2009 on Bank Indonesia

2. Acts Nr. 3 / 2004 Concerning Amendment to Act of the

Republic of Indonesia Number 23 of 1999 Concerning

Bank Indonesia

3. Acts Nr. 23 / 1999 on Bak Indonesia

4. Acts Nr. 21 / 2008 on Sharia (Islamic) Banking

5. Acts Nr. 3 / 2011 Cocerning Fund Transfer



INTERNATIONAL COLLABORATION

UNDERTAKEN BY BANK INDONESIA

Bank Indonesia advocates collaboration with international

institutions to buttress task performance continuity related

to economic, monetary and banking fields. Bank Indonesia

currently participates in international collaboration covering

the following aspects:

1. Joint intervention for foreign exchange market stability.

2. Settlement of cross-border transactions.

3. Correspondent relationships.

4. Information exchange on subjects related to the roles

and functions of the central bank

5. Training/research in monetary and payment system

sectors.





Bank Indonesia’s membership of several international

institutions and forums include:

1. The South East Asian Central Banks Research and

Training Centre (SEACEN Centre)

2. The South East Asian, New Zealand and Australia

Forum of Banking Supervision (SEANZA)

3. The Executive’ Meeting of East Asian and Pacific

Central Banks (EMEAP)

4. ASEAN Central Bank Forum (ACBF)

5. Bank for International Settlements (BIS)





Memberships of Bank Indonesia as a representative of the

Indonesian Government include:

1. Association of South East Asian Nations (ASEAN)

2. ASEAN+3 (ASEAN + China, Japan and Korea)

3. Asia Pacific Economic Cooperation (APEC)

4. Manila Framework Group (MFG)

5. Asia-Europe Meeting (ASEM)

6. Islamic Development Bank (IDB)

7. International Monetary Fund (IMF)





8. World Bank, including membership of International

Bank of Reconstruction and Development (IBRD),

International Development Association (IDA) and

International Finance Cooperation (IFC), as well as

Multilateral Investment Guarantee Agency (MIGA)

9. World trade Organization (WTO)

10. Intergovernmental Group of 20 (G20)

11. Intergovernmental Group of 15 (G15, as an observer)

12. Intergovernmental Group of 24 (G24, as an observer)



THANK YOU


history and organization of bank indonesia

Economy & Finance