Indonesia court finalising verdict on challenge to financial watchdog

Jakarta

INDONESIA'S constitutional court is finalising a review of a legal challenge to the role of the country's financial regulator, in a case that will decide who supervises banking in South-east Asia's largest economy.

The Financial Services Authority, known as the OJK, took over supervision of lenders from the central bank last year under a 2011 law on financial institutions. The court, whose verdict is final and can't be contested, is assessing an appeal against eight articles of the law in a challenge to the definition, authority and fees of the new regulator, according to court documents seen by Bloomberg. The case against the OJK, created to improve supervision following banking collapses during the 1997-1998 Asian financial crisis, comes as levels of bad debt are rising in a slowing economy. Banks want regulation to return to the central bank.