The potential and opportunities for Rural Banks (BPR) to obtain funding from the capital market through a go public are starting to open. The House of Representatives (DPR) of the Republic of Indonesia is also ready to support efforts to amend Law No. 10 of 1998 on Banking.
Member of Commission XI of the DPR RI from the PDIP Faction Musthofa fully supports the efforts of the BPR industry to seek capital through the go public . According to him, BPR has been underestimated. In fact, the functions and roles of BPRs are not much different from commercial banks, namely they both carry out the intermediation function. BPR will become the spearhead of national financial institutions in mobilizing MSMEs.
"We at the DPR Panja are ready to support fully support the steps in that direction, including the proposed amendments to the Banking Law, the BI Law, the OJK Law, and the LPS Law," said Musthofa in the seminar 'Potentials and Opportunities for BPRs to Go Public and Go Digital. ' which was held by The Finance and Perbarindo and the launch of the biographical book 'The Pioneering and Exemplary Banker Wymbo Widjaksono', in Jakarta, Friday (17/6/2022).
His party strongly supports efforts to equalize rural banks with commercial banks, especially in seeking funding. "Don't worry foreign investors will take their funds out. era borderless , there are no more barriers between countries," said Musthofa.
As a follow-up effort to the discourse of BPR going public, his party also promised to take it to the DPR Panja. "The work of the DPR is a collegial collective, it must involve other members, it cannot work alone," he said.
Chairman of the Association of Indonesian Rural Banks (Perbarindo), Joko Suyanto also stated, going public or initial public offering (IPO) is a dream for the BPR industry, one of which is an effort to increase capital.
He explained that there are a number of advantages if a BPR goes public , including getting tax incentives, increasing company value, increasing market awareness , growing employee loyalty, access to new funding, and improving good corporate governance (GCG).
In addition to the benefits, continued Joko, there are also a number of challenges that must be considered by BPRs when going public , namely delusions and control over ownership, transparency and reporting that must be carried out professionally, costs associated with the capital market, market pressure, as well as regulation and fulfillment. "That's a challenge. The regulations, and their use, are added, if they are now elaborate will be even more complicated when we do the IPO," he said.
Member of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Didik Madiyono revealed that he also encouraged BPR/BPRS to go public which would have a positive impact on strengthening capital, increasing efficiency and profitability, and strengthening the implementation of good corporate governance for BPR/BPRS.
"We certainly motivate BPR/BPRS to continue to innovate and transform so that they can grow sustainably and always maintain their financial performance. LPS is always here to maintain public trust in the banking industry, including BPR/BPRS," said Didik.
Capital is still a major problem in BPRs, especially after the existence of a minimum capital requirement and fulfillment of minimum core capital for BPRs in accordance with POJK No 5/POJK.03/2015. According to the POJK, the minimum core capital for rural banks is set at IDR 6 billion which must be met no later than December 31, 2024.
In fact, there are still many BPRs that have a core capital of less than Rp 6 billion. Based on data from the Infobank Institute, as of January 2022, there were 501 (30.7%) BPRs with core capital under Rp 6 billion out of a total number of 1,631 BPRs (1,467 BPRs and 164 BPRS). The large number of rural banks with core capital below Rp 6 billion requires special attention from all relevant parties.
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