There was a lot of excitement in the Mobile Money industry when Bank Indonesia announced it would allow pilots of Branchless Banking in 2013 for five banks and three telcos. There was considerably less excitement at the end of November when the pilots ended.
The most common course of action after a regulatory pilot is either to extend the length of the pilot or issue regulations, but in this case BI declared that the pilot were closed and banks proceeded to close or suspend their agent operations.
Since then, there has been a shift in regulatory authority in Indonesia with the creation of OJK, the Financial Services Authority. They now have micro-prudential authority and thus would be the key regulatory body for Branchless Banking. However, BI maintains control of the payments system and plans to issue regulations on Digital Financial Services as part of this authority. The details of this are unclear, but it is expected that they will only allow “Book 4 Banks” (BRI, BNI, Mandiri and BCA) to participate, at least initially. BI has stated that other banks and non-banks may also participate in the future, but this is troubling news for banks such as BTPN, CIMB Niaga and Sinar Haparan Bali who participated in pilots but are now in regulatory limbo as to how to proceed.
These new regulations on Digital Financial Services (layanan keuangan digital or LKD) have not yet been released but are being keenly anticipated by all involved.