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INDONESIAN FINANCIAL SERVICES AUTHORITY ISSUES GUIDANCE ON STANDARDS OF CARE FOR CUSTOMERS

Strengthening Consumer Protection in the Financial Services Sector

Jakarta, Indonesia - In a move to strengthen consumer protection in the financial services sector, the Indonesian Financial Services Authority (OJK) has issued guidance on the standards of care that apply to each type of financial services firm and authorized person when dealing with retail customers.

OJK Regulation No. 6/POJK.07/2022

According to OJK Regulation No. 6/POJK.07/2022, which came into effect on January 20, 2023, banks and non-bank financial services are required to have and implement written policies and procedures for consumer protection. These policies and procedures must include principles such as:

  • Adequate education, disclosure, and transparency of information
  • Fairness and responsible business behavior
  • Protection of consumer assets, privacy, and data
  • Effective and efficient complaint resolution and dispute resolution procedures

Private Rights of Action

In a related development, private rights of action would violate OJK regulations, which are mostly related to infractions such as:

  • Fraud
  • Insider trading
  • Market manipulation

These infractions may lead to imprisonment of up to 10 years and a fine of up to IDR 15 billion (approximately USD 1 million).

Cross-Border Issues

The OJK has also issued guidance on cross-border issues, stating that its regulations typically do not apply to entities established outside Indonesia. However, the authority may cooperate with and provide assistance to financial services institutions in other countries and international organizations or agencies involved in:

  • Examination
  • Investigation
  • Prevention of crime in the financial services sector

International Standards

Indonesia is a member of the G20 forum and other international forums, including the Basel Committee on Banking Supervision (BCBS), and is committed to adopting the recommendations on international standards resolved in these forums. The OJK prioritizes the national interest when implementing these standards, which are expected to provide a basis for Indonesia’s economic growth and development.

Key Developments of the Past Year

In addition to these developments, there have been other significant changes in the Indonesian financial services sector over the past year, including:

  • Implementation of new regulations on consumer protection
  • Strengthening of supervision and enforcement measures by the OJK

Overall, these developments demonstrate the OJK’s commitment to protecting consumers and promoting a stable and efficient financial system in Indonesia.