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The Coordinating Minister Airlangga Has Proposed That BRI And BSI Be Designated As Bullion Banks

Coordinating Minister for Economic Affairs Airlangga Hartarto has proposed that PT Bank Rakyat Indonesia (Persero) Tbk, commonly known as BRI, and PT Bank Syariah Indonesia Tbk, referred to as BSI, be designated as bullion banks. A bullion bank serves as a storage facility for gold in Indonesia and can offer banking services involving precious metal instruments. "I have suggested to the Financial Services Authority (OJK) that at a minimum, BRI, which is the holding company for Pegadaian, along with Bank Syariah Indonesia, should be able to host bullion banking operations in Indonesia," he stated during the Indonesia SEZ Business Forum 2024 held at the St. Regis Hotel in Jakarta on Monday, December 9, 2024.

He revealed that the government, through the OJK, is working on developing bullion banking to establish a gold storage facility that can assess gold stocks and incorporate gold into financial statements. Currently, gold stocks are merely stored in warehouses and recorded by weight rather than value. Consequently, the jewelry industry has historically only earned revenue from production costs and has not realized the full value of the gold produced by Indonesia's manufacturing sector. Airlangga emphasized that Indonesia possesses significant gold reserves, citing that PT Pegadaian (Persero) currently holds 70 tons of gold. Additionally, PT Freeport Indonesia is expected to produce 60 tons of gold annually in the Special Economic Zone (KEK) of Gresik, East Java.

He stated, "I believe this marks the beginning of several banks transitioning into bullion banks." Furthermore, the economic potential of precious metals is substantial, particularly during global crises such as the current one. Gold serves as a safe haven investment, maintaining its value amidst economic turmoil. "Over the past five years, we have faced numerous crises. It would be unwise not to leverage our own strengths," he remarked. Additionally, it is noteworthy that the Financial Services Authority (OJK) recently issued regulations concerning guidelines for financial service institutions (LJK) to conduct gold bullion business activities. These regulations are outlined in the Financial Services Authority Regulation (POJK) Number 17 of 2024 regarding the Implementation of Bullion Business Activities. Bullion business activities encompass operations related to gold in the form of gold savings, gold financing, gold trading, gold custody, and/or other activities conducted by financial service institutions.

This POJK serves as a derivative regulation of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (P2SK). The issuance of this POJK represents one of OJK's efforts to encourage LJK to bridge the supply and demand for gold, including the monetization of gold that remains stagnant within society. Broadly, the regulations cover bullion business activities, requirements for LJK, organizers of bullion business activities, licensing mechanisms for bullion business activities, phased implementation of bullion business activities, and the application of prudential principles. Additionally, it addresses the implementation of good corporate governance and risk management for LJK engaged in bullion business activities, the application of anti-money laundering programs, prevention of terrorism financing, prevention of proliferation financing of weapons of mass destruction, implementation of anti-fraud strategies, consumer protection, and reporting systems.

Tag: Airlangga Hartarto BRI BSI