Indonesia’s Financial Services Authority (OJK) is open to submissions by institutions that wish to become bullion banks, following President Prabowo Subianto’s recent launch of the country’s first bullion banks, which are run by the state-run pawnbroker Pegadaian and the government-owned sharia bank Bank Syariah Indonesia (BSI), according to reporting from Jakarta Globe.
Both Pegadaian and BSI had to secure OJK’s approval before they could operate bullion banks, which engage in the buying and selling of gold. OJK’s senior executive Agusman recently revealed that no other financial institution had applied to become a gold bank so far, even though they were very much welcomed to do so.
“To date, we are still opening up opportunities for other financial service institutions to apply for bullion services permit as long as they meet the requirements,” he said, as quoted by Antara News.
OJK requires any bullion bank hopeful to have an initial capital of IDR 14 trillion (almost USD 859 million) and to have a special unit dedicated to running the bullion services. Its main business must also revolve around financing, says Jakarta Globe.
Indonesia also plans to set up a national gold council. This body will reportedly help oversee the policies on bullion banks. Agusman said that the council would consist of ministries and bodies that are related to the national bullion ecosystem.
Jakarta Globe reports that the government is hoping that the bullion banks will spur economic growth. Prabowo claimed that the recently launched gold banks could add IDR 245 trillion or around USD 15 billion to Indonesia’s gross domestic product. These banks are also expected to create 1.8 million jobs.
Source: Jakarta Globe
Stock image by Soofia Tailor from Pixabay
