Indonesian lawmakers pick new head of Financial Services Authority

[JAKARTA] Indonesian lawmakers on Thursday (Apr 7) approved a new chief for the Financial Services Authority who has vowed to strengthen the agency's oversight of markets amid public criticism of some insurance products and illegal investments.

Mahendra Siregar, 59, is currently deputy foreign minister but is expected to relinquish that role once his appointment as head of the agency known as OJK is approved by the whole parliament, within weeks.

The parliamentary commission that oversees financial affairs conducted a "fit and proper test" on Wednesday for 2 candidates. They chose Mahendra after he pledged to step up the effectiveness of OJK's supervision and investigations into financial institutions, and called for findings to be followed up with transparent and accountable policy.

"Therefore, the trust and the credibility of this institution will be maintained, as well as that of Indonesia's financial system," he said.

The OJK has been criticised by lawmakers for its lax oversight of the insurance sector following the 2018 default of state-owned insurer Jiwasraya and complaints about bad returns on unit-linked insurance plans issued by several prominent insurance firms.

Its supervision of investment products has also been questioned amid a criminal investigation into promoters of binary option trading platforms, something authorities say are illegal because of their similarity to gambling, which is outlawed in Muslim-majority Indonesia.

Commission XI of parliament also selected former central bank deputy, Mirza Adityaswara, as deputy head of the OJK and 5 other people as the agency's new board members.

Mahendra, a graduate of Monash University and a career statesman who has held various senior government positions, will be replacing the current OJK head Wimboh Santoso, whose term is set to expire in July. REUTERS