Bank Indonesia

Bank Indonesia (BI; ) is the central bank of the Republic of Indonesia. It replaced the Bank of Java in 1953, which had been created in 1828 to serve the financial needs of the Dutch East Indies.

History

Bank of Java

King William I of the Netherlands granted the right to create a private bank in the Indies in 1826, which was named . It was founded on 24 January 1828 and later became the bank of issue of the Dutch East Indies. The bank regulated and issued the Netherlands Indies gulden.

In 1881, an office of the Bank of Java was opened in Amsterdam. Later followed the opening of an office in New York. By 1930 the bank owned sixteen office branches in the Dutch East Indies: Bandung, Cirebon, Semarang, Yogyakarta, Surakarta, Surabaya, Malang, Kediri, Banda Aceh, Medan, Padang, Palembang, Banjarmasin, Pontianak, Makassar, and Manado. Almost all buildings were designed by the Amsterdam architect Eduard Cuypers (1859–1927) in collaboration with M. J. Hulswit (1862–1921) and A. A. Fermont (1882–1967) in Batavia. (2020): "Landmarks from a bygone era, Life and work of Ed. Cuypers & Hulswit-Fermont 1897–1927" Volendam, LM Publishers, (2020): "Architecture from the Indonesian Past, Life and work of Fermont-Cuypers 1927–1957" Volendam, LM Publishers,

The Bank of Java was operated as a private bank and individuals as well as industries etc. could get help in the bank's offices.Dirk Teeuwen, no date. Javasche Bank, the Old Dutch City Hospital of Batavia-Jakarta and the Mandiri Bank Museum.

Bank Indonesia

Bank Indonesia was founded on 1 July 1953 from the nationalisation of De Javasche Bank, three years after the recognition of Indonesia's independence by Netherlands. Brief useful notes on the history of Bank Indonesia for various periods since 1953 are on the Bank Indonesia website at "History of Bank Indonesia Institution". See also

For the next 15 years, Bank Indonesia carried on commercial activities as well as acted as the nation's national bank and was in charge of issuing Indonesian rupiah currency. This came to an end with the Act No. 13 of 1968 on the Central Bank, transforming Bank Indonesia as a central bank.

The act was subsequently replaced by Act No. 23 of 1999, giving the bank independence from governmental control. Thereafter, the bank reported to the parliament (DPR) instead of the President, and the bank's governor was no longer a member of the cabinet.

Organization The bank is led by the board of governors, comprising the governor, a senior deputy governor and between four and seven deputy governors.

The governor and deputy governors serve a five-year term, and are eligible for re-election for a maximum of three terms. The governor and senior deputy governor are nominated and appointed by the president, with approval from the DPR. Deputy governors are nominated by the governor and appointed by the president, with approval of the DPR. The president has no power to dismiss a member of the board, except when a board member voluntarily resigns, is permanently disabled, or is proven guilty of criminal offence. The senior deputy governor acts as governor in the case of the latter's office vacancy.

The Board of Governors Meeting is Bank Indonesia's highest decision-making forum. At least one meeting must be convened each month to determine general monetary policy.

The Bank is active in promoting financial inclusion policy and is a member of the Alliance for Financial Inclusion. It hosted AFI's second annual Global Policy Forum (GPF) in Bali, Indonesia in 2010. On 14 May 2012 Bank Indonesia announced it would be making specific commitments to financial inclusion under the Maya Declaration.

By 30 December 2013, the bank's microprudential supervision functions will be transferred to Financial Services Authority (OJK). In the future, the bank will maintain Indonesian financial system and monetary stability through mixture of monetary and macroprudential instruments and policies. The Financial Services Authority institutive law (law n° 21 of 2011 enacted on 31 December 2012) followed the US$710 million baylout of Bank Century and the receivership 21 other national private banks.

Strategic objectives The Bank describes its strategic objectives as being: Maintain monetary stability Maintain the financial sustainability of the Bank of Indonesia Strengthen the effectiveness of monetary management Create a sound and effective banking system and financial system stability Maintain the security and effectiveness of the payment system Increase the effectiveness of Good Governance implementation Strengthen the organisation and build highly competent human resources with the support of a knowledge-based work culture Integrate the Bank of Indonesia's transformation in line with Bank Indonesia's destination statement of 2008

National Payment Gateway The aim is to integrate all Automated Teller Machines in ASEAN countries, beginning with integration first in each country. On 16 January 2012 interconnection between Bank Mandiri ATMs and Bank Central Asia ATMs (Prima ATMs) was launched.

Bank Indonesia Liquidity Support Bank Indonesia Liquidity Support is an Indonesian government policy that was formulated with Bank Indonesia in the crisis period and executed by Bank Indonesia to rescue the monetary and banking system as well as the economy as a whole. It was partly based on the instruction and command of the President in the limited meeting of economic, finance, and development supervision and production and distribution on 3 September 1997.

This policy was provided under various emergency lending schemes (Fasilitas Diskonto I/Fasdis I, Fasdis II, Fasilitas SBPU, Fasilitas SBPUK, Fasilitas Diskonto Baru and Dana Talangan).

Project Nexus The Bank for International Settlements signed an agreement with Central Bank of Malaysia, Bank of Thailand, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, and the Reserve Bank of India on 30 June 2024 as founding member of Project Nexus, a multilateral international initiative to enable retail cross-border payments. Bank Indonesia involved as a special observer. The platform, which is expected to go live by 2026, will interlink domestic fast payment systems of the member countries.

Offices BI operates 46 offices across Indonesia, and five representative offices in New York City, London, Tokyo, Singapore and Beijing. In addition, Bank Indonesia also operates several museums housed in the former De Javasche Bank office buildings, such as Jakarta (located in the former De Javasche Bank head office building in old Jakarta), Surabaya, and Padang.

Indonesian offices Bank Indonesia has branches in almost all major cities of Indonesia.

Worldwide representative offices Singapore: 160 Robinson Road #28-05, SBF Center Singapore 068914. London: 10 City Road, London EC 1Y 2EH. Tokyo: New Kokusai Building Room 906 No.4 - 1, Marunouchi 3 - Chome Chiyoda-ku, Tokyo, 100-0005 Japan. New York: 200 Vesey Street 25th Floor New York 10285. Beijing: Fortune Financial Center Building Lt. 46, 5 Dongsanhuan Road, Chaoyang District, Beijing 100020.

List of Governors +No.PortraitGovernorTook officeLeft officeLength of termTermNotes1Sjafruddin Prawiranegara1 July 195320 January 195812Lukman Hakim9 April 19581 September 195923Soetikno Slamet1 September 19591 November 19604Soemarno1 November 19601 November 19633 years5Teuku Jusuf Muda Dalam10 December 196327 March 196636Radius Prawiro27 March 196627 March 197127 March 19715 April 197347Rachmat Saleh5 April 197316 March 1978516 March 197816 March 198368Arifin Siregar16 March 198327 March 198879Adrianus Mooy27 March 1988March 1993810Sudrajad DjiwandonoMarch 1993February 1998911Syahril SabirinFebruary 199817 May 20031012Burhanuddin Abdullah17 May 200317 May 20085 years1113Boediono22 May 200817 May 200912—Miranda Goeltom(Acting)17 May 200927 July 2009—Darmin Nasution27 July 20091 September 2010141 September 201023 May 201315Agus Martowardojo23 May 201323 May 20185 years1316Perry Warjiyo24 May 201824 May 20231424 May 202327 July 202615—Destry Damayanti27 July 20262 September 2026172 September 2026Incumbent16

List of Senior Deputy Governors of Bank Indonesia Governor Replacements (1953–1999) +PortraitNameTook officeLeft officeLength of termNotesLukman Hakim19531958Approx. 5 yearsAlso served as a Director of Bank Indonesia.Indra Kasoema15 June 195815 August 19602 years, 2 monthsFirst Deputy Governor.BoerhanoeddinSecond Deputy Governor.Darmawan Mangunkusumo31 July 1958Second Deputy Governor; also served as a Director of Bank Indonesia.R. Soerjadi13 September 196115 January 19653 years, 4 months, 2 daysByanti KharmawanM. Djoeana Koesoemahardja27 March 1966R. Hertijanto27 March 1966Soehardi27 March 1966Rachmat Saleh27 March 1966

Senior Deputy Governors (1999–present) +No.PortraitSenior Deputy GovernorTook officeLeft officeLength of termNotes1Anwar Nasution1999July 2004Approx. 5 years2Miranda Goeltom27 July 200427 July 20095 yearsAppointed under Presidential Decree No. 98/M of 2004.3Darmin Nasution27 July 20091 September 20101 year, 1 month, 5 days–Vacant1 September 20103 October 20133 years, 1 month, 2 days4Mirza Adityaswara3 October 201325 July 20145 years, 9 months, 22 daysAppointed under Presidential Decree No. 113/P of 2013.25 July 201425 July 2019Reappointed under Presidential Decree No. 62/P of 2014.5Destry Damayanti7 August 20197 August 20247 years, 0 months, 26 daysAppointed under Presidential Decree No. 74/P of 2019.7 August 20242 September 2026Reappointed under Presidential Decree No. 74/P of 2024.6Aida S. Budiman2 September 2026IncumbentIncumbentReappointed under Presidential Decree No. 92/P of 2026.

Legal basis

Bibliography

J. Soedradjad Djiwandono. 2005. Bank Indonesia and the Crisis: An Insider's View. Singapore: Institute of Southeast Asian Studies. Miranda S. Goeltom. 2008. Essays in Macroeconomic Policy: The Indonesian Experience. Jakarta: PT. Gramedia Pustaka Utama.

Bank Indonesia

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