BANKING DEVELOPMENT AND
D. Regional Development Bank (BPD) as Regional Champion
Product Development Service
Control
is effectively implemented, banks shall be required to conduct trial calculations starting from December 2014 and leverage ratio disclosure starting from the first quarter of 2015, coincides with the publication of financial report.
D. Regional Development Bank (BPD) as Regional
On 26 May 2015 at Istana Negara Jakarta, the BPD Transformation Program was launched by the President of The Republic of Indonesia attended by Governors, Head of Regions and Chairman of DPRD (regional parliaments) throughout Indonesia which constitute the controlling Shareholders of BPD, all members of the Board of Commissioners and Directors of BPD, and also other BPD stakeholders. In the referred event a Memorandum of Understanding between OJK and Kemendagri was also signed. By the launching of the BPD Transformation Program, it is expected that BPD in the future will become competitive, strong and contributive banks for regional development.
The vision of the referred BPD Transformation Program is “to become a strong bank with high competitiveness and significant contribution for the growth and equality of sustainable regional economy”, in line with the target of the Master Plan for Financial Services Sector as well as the vision of Indonesian Long Term Development. Through such Transformation Program, it is expected that BPD will become the leader in their respective regions and as the largest best and strongest bank group in the national banking industry.
Figure 4.4: Transformation Holistic Program Frame
To become a strong and competitive regional bank that significantly contributes to the growth and even distribution of
sustainable regional economy.
Product Development Service
Control Marketing Development System
Control Portfolio Control
Capital and Likuidity Strengthen
(2) Sustainability
(1) High Competitive Advantage
(3) Contributive (The Agent of Regional Development)
Organization, Human Resource
and Culture
Information Technology Control
Development and Standarization of
System & Operating
Strengthen, Governance, Risk Management Transformation
Vision
Pillar (Enabler) Target (Outcome)
and (6) Capital and Liquidity Strengthening. The six strategies will be developed, coordinated and synergized by BPD Strategic Group, so as to create efficiency and effectiveness of business and risk management both at the Group level and at each BPD.
The BPD Transformation Program is not meant to merge all BPD to become one legal entity, but to enhance the synergy among BPD so that efficiency and effectiveness in their business is created.
To support the effectiveness of the business process mentioned above, 3 (three) supporting elements are required as the foundation, namely: (1) Human resources (human capital) that needs to be developed professionally through a talent management; (2) Adequate infrastructure that must be provided and maintained, including information system and technology, as well as office network, ATM and others; (3) Policy and a complete operational guidelines (system and operating procedure) that is constantly refined in accordance with the operational development of banks.
The BPD Transformation Program must be based on a solid foundation, covering a strong corporate culture, good corporate governance (GCG), risk management and internal control that is effective to support the effectiveness of operations and competitiveness.
Phase I Fondation Building
Phase II Growth Acceleration
Phase III Market Leadership
Figure 4.5: Implementation of BPD Transformation Program
BPD Transformation Program will be implemented gradually within the next 7-8 years, through three phases as follows:
Phase I: Foundation Building
The target is to develop the supporting processes (Governance, Risk & Compliance) and solid capital,
basis for the growth in the second phase.
Phase II: Growth Acceleration
The target is to grow faster in order to achieve third position based on total assets by strengthening core business processes, entering commercial loan segments, strengthening syndicated loans, and intensifying synergy of BPD Group and inter BPD as well as strengthening corporate culture of “ONE-BPD”.
Phase III: Market Leadership
The target is to establish a position as the market leader with a target of asset size number 1 or 2 with respected core and support capabilities through the transformation of BPD Group as the the Holding Corporation. In this phase, BPD shall be capable to be the market leader with significant contribution for the regional economy.
To support the implementation of BPD Transformation Program, OJK and ASBANDA has explored cooperations with several international institutions. Association of Germany Savings Bank (Sparkassen Foundation for International Cooperation) has agreed to provide technical assistance to ASBANDA and BPD in the framework of implementation of the said BPD Transformation Program for three years (2016-2018).
To ensure the success of BPD Transformation Program, intensive communication programs will continue to be conducted to all stakeholders in order to increase awareness and their support to the BPD Transformation Program.
In 2015 a series of activities have been carried out in the context of the referred BPD Transformation Program among others in the form of capacity enhancement of the Management, Executive Officials and Supervisors
Phase III Market Leadership
present financial statements accurately and comprehensively, and reflects an intact Bank performance according to the applicable Generally Accepted Accounting Principles (SAK-Standar Akutansi Keuangan), particularly entire stakeholders it is expected that the said BPD Transformation Program will be succesful in making BPD as the leader in their respective region and in contributing optimally for the regional and national economy in the next couple of years.
E. Sharia Banking Development