The Indonesian Financial Services Authority (OJK) has introduced new regulations to govern the operation of gold banks through the issuance of Peraturan Otoritas Jasa Keuangan (POJK) No. 17 of 2024. This regulation is aimed at standardizing and overseeing financial activities related to gold, such as gold savings, financing, trading, and safekeeping services. Gold banks, which play a pivotal role in the growing interest in gold as an investment vehicle, will now operate under a structured legal framework, ensuring transparency and security in their dealings.

The primary objective behind POJK No. 17/2024 is to provide a clear regulatory environment for financial institutions involved in the gold bullion business. According to Agusman, the Head of OJK's Division overseeing financing institutions and microfinance, this regulation is designed to meet the increasing demand for gold services. It will also help facilitate the monetization of idle gold reserves within society, which could otherwise remain untapped. The rise in the popularity of gold as an alternative asset class among investors, both institutional and individual, necessitated such regulatory measures to protect the integrity of the market and ensure investor confidence.

There are a lot of different things that the regulation covers, but it focuses on governance and risk management the most. Financial institutions that offer bullion services must now follow strict risk management protocols and strong corporate governance standards. They must also follow anti-money laundering (AML) and counter-terrorism financing (CTF) laws, as well as steps to stop the funding of the spread of weapons of mass destruction. There are also global standards for preventing fraud and protecting consumers.

The new regulation also outlines the required licensing processes for financial institutions wishing to engage in gold-related activities. These institutions must meet a set of prerequisites, ensuring that they are well-equipped to handle the complexities of gold trading and storage. Moreover, POJK No. 17/2024 mandates phased implementation, giving time for businesses to adjust and comply with the requirements.

One of the significant aspects of the regulation is its alignment with the broader financial sector reform agenda set forth in Indonesia’s Financial Sector Development and Strengthening Act (P2SK), which seeks to enhance the overall stability and competitiveness of the financial system. The government’s effort to foster a more sophisticated gold market, while ensuring that risks are effectively managed, positions gold as a key asset in the country’s financial landscape.

This regulatory move is expected to have a profound impact on Indonesia's financial ecosystem, particularly as the nation moves towards more inclusive and innovative financial products. For business leaders, investors, and financial institutions, understanding and preparing for the implications of these new rules will be crucial to navigating the evolving gold market successfully.

CNNINDONESIA