In Indonesia, two regulators have responsibility for the authorization and supervision of banks, insurers and other financial institutions: Bank Indonesia (BI) and the Financial Services Authority (Otoritas Jasa Keuangan or OJK).

The OJK was established in 2011 to take over the role of BI in supervising and regulating banks and protecting consumers in the financial services industry and of the Capital Market and Financial Institutions Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan or Bapepam-LK) in supervising and regulating non-bank financial institutions and the capital market. BI is responsible for the macro-supervision of the banking and financial services industries.

In January 2023, the Indonesian government enacted Law No. 4 of 2023 on Financial Sector Development and Reinforcement (P2SK Law), an omnibus law that regulates the financial sector. Under the P2SK Law, supervisory authorities over digital financial assets (including crypto assets) and securities-related financial derivatives will shift from the Commodities and Futures Trading Regulatory Agency (Badan Pengawas Berjangka Komoditi or Bappebti) to OJK, while supervisory authorities over financial derivatives that are related to money market and foreign currencies will shift from Bappebti to BI. The transfer of supervisory duties and authorities will be completed within 24 months from the enactment of the P2SK Law (i.e., January 2025).

The allocation of responsibilities between BI and the OJK is as follows:

• BI regulates the macro-supervision of the banking and financial services industries. BI is also responsible for regulating monetary and payment system services for prudential and conduct purposes. BI is also the main regulatory authority for money remittances and payment system services providers such as Visa and MasterCard. BI will also regulate financial derivatives that are related to money markets and foreign currencies.
• The OJK regulates banks, insurers and large investment firms (i.e., investment banks) for prudential and conduct purposes, including in relation to regulatory capital requirements. Firms that the OJK regulates include banks, asset managers, brokers, financial advisers, pension funds, insurance companies and multi-finance companies. The OJK has also regulated financial technology companies operating in the financial services space (e.g., P2P lending platform operators, financial aggregators, credit scoring platforms). OJK will also regulate digital financial assets (including crypto assets) and securities-related derivatives.

In addition, financial services and payments companies/firms are required to file reports (on a periodic basis or if triggered by certain types of transactions) to the Center for Reporting and Analysis of Financial Transactions (PPATK). The analysis results produced by the PPATK would serve as recommendations for the other authorities (including the OJK and BI) in deciding whether to pursue further investigations or actions into the financial services or payments company/firm.