PPSK BILL and Financial Sector Stability

The Bill on Development and Strengthening of the Financial Sector (RUU  PPSK) is officially included in the priority bill in the 2023 national  legislation program (Prolegnas) along with the ratification of the draft  omnibus law on the financial sector at the DPR plenary meeting on 20  Last September 2022. This bill is crucial for Indonesia, where the role of  the financial sector is still minimal, both banking and non-banking.

The primary role of the financial system is to create incentives for the  efficient allocation of financial and natural resources across all sectors of  the economy across time and location. A well-functioning financial  system will promote investment by identifying and financing projects  with the highest rates of return, mobilizing savings, allowing  diversification and risk mitigation, and facilitating the exchange of goods  and services. The functions carried out by this financial system will lead  to the efficient allocation of resources, rapid accumulation of physical  and human capital, and faster technological progress, which in turn will  promote economic growth and development.