Jakarta. The Financial Services Authority (OJK) said Thursday the country’s financial sector remains stable and resilient despite global headwinds and last week’s protests, which led to property damage in several cities. The regulator also urged lenders to ease access to financing for communities affected by the unrest.

“Fundamentally, OJK assesses that financial sector indicators demonstrate solid capitalization, adequate liquidity, and a well-managed risk profile. In the stock market, the IDX Composite (IHSG) recorded positive performance in August and even reached an all-time high. Although the market initially reacted to the turmoil, which increased volatility, the impact so far has remained relatively limited,” said OJK Chairman of the Board of Commissioners, Mahendra Siregar, during an online press conference held in Jakarta on Thursday.

Mahendra explained that to provide easier access and financing facilities for communities affected by the demonstrations, OJK is preparing several measures, including:

1. For debtors materially affected by the current situation, which impacts their loan repayment capacity, OJK encourages financial institutions to provide loan repayment relief, including restructuring, while still upholding prudential principles and customer protection.

   ADVERTISEMENT

2. Easier access to financing for the MSME sector, with regulations to be issued shortly. OJK is requesting financial institutions (LJK) to implement policies and schemes for MSME financing products.

3. OJK will also ease rules for venture capital firms, microfinance institutions, and other financial service providers. The measures include allowing financing companies, infrastructure lenders, and pawnshops to extend credit to prospective customers with a history of minor non-performing loans, as long as they are still deemed capable of repayment and fit the institution’s risk profile.

Meanwhile, to anticipate potential risks going forward, OJK has prepared a number of strategic measures to maintain the stability of the financial services sector and ensure services for the public, namely:

1. Conducting intensive coordination with financial institutions and relevant parties to ensure that financial services operate optimally for the public:

• In general, the infrastructure of financial institutions (LJK) remains well maintained, but comprehensive data collection and assessments of the impact of domestic dynamics on LJK are continuously being carried out.

• OJK has requested financial institutions to proactively identify potential losses, accelerate the assessment of the scale of such losses, and ensure that claim payments are made promptly once the verification process of the assessment results has been completed, in accordance with the applicable policy coverage.

• As part of this effort, compensation has been provided to the family of one of the victims who passed away.

2. Continuously monitoring the evolving situation to safeguard the stability of the financial services sector.

• OJK is encouraging financial institutions to conduct stress tests on the potential impact of market value fluctuations of their assets to ensure readiness in facing various instruments.

• A range of policy instruments is also available to anticipate significantly volatile market conditions. For market stabilization, a series of anticipatory measures have been prepared by OJK and the Stock Exchange to mitigate significant market fluctuations, such as:

1. Share buybacks without requiring a General Meeting of Shareholders (RUPS), valid until September 18

2. Postponement of the implementation of short-selling transaction financing by Securities Companies, valid until September 26

3. Adjustments to trading halts during IHSG (IDX Composite) declines, as well as asymmetric auto-rejection mechanisms.

• OJK will conduct periodic evaluations of these policies and continue to monitor financial market conditions while taking the necessary measures. This is carried out to maintain investor confidence, while ensuring the application of transparency, prudential principles, risk management, good corporate governance, and alignment with current capital market conditions.

• It is expected that these policies and measures will continue to maintain investor confidence and optimize the intermediation function.