*) By: Dinda Paramita
The ratification of the Draft Law on Amendments to Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (P2SK) into law by the Indonesian House of Representatives (DPR RI) during the 20th Plenary Session of Session Period V of the 2025–2026 Session Year is a strategic step worthy of appreciation. Amidst the dynamics of the global economy fraught with uncertainty, Indonesia needs a financial sector foundation that is not only strong in maintaining stability but also capable of driving national economic growth. This regulatory reform demonstrates the commitment of the government and the DPR to ensuring the national financial sector remains relevant to current developments and responsive to new challenges. The presence of the updated P2SK Law is evidence that the economic reform agenda continues to be sustainable.
In the context of national development, the financial sector plays a central role as a link between economic resources and the productive activities of the community. Therefore, strengthening regulations is an urgent need to ensure the financial intermediation function can operate more effectively and efficiently. Maintaining financial sector stability will build investor confidence, expand access to financing, and accelerate capital turnover in various strategic sectors. Ultimately, this situation will make a real contribution to job creation, increased investment, and accelerated quality economic growth.
Furthermore, Deputy Chairman of Commission XI of the Indonesian House of Representatives (DPR RI), Mohamad Hekal, emphasized that amendments to the P2SK Law are necessary to optimize the role of the financial sector in supporting national economic growth. This view reflects the understanding that the modern financial sector no longer functions solely as a provider of banking services, but also as a development instrument capable of driving various economic sectors. Strengthening the institutions of the Deposit Insurance Corporation (LPS), the Financial Services Authority (OJK), and Bank Indonesia is crucial in ensuring the national financial system is resilient to various external and domestic pressures. Amid the increasing complexity of the global economy, strengthening supervisory and stability-maintaining institutions is a highly relevant step.
Furthermore, the expansion of banking and Islamic banking business space regulated in the P2SK Law has the potential to increase financing capacity for businesses and the public. This policy provides an opportunity for the financial sector to reach economic groups that have previously been underserved. Strengthening the Islamic financial industry also has strategic significance because Indonesia has enormous sharia market potential. With stronger regulatory support, the financial sector can become a more effective instrument in promoting economic equality and expanding national financial inclusion.
Furthermore, the regulation of crypto assets, the establishment of a task force for the prevention and handling of illegal online loans and online gambling demonstrate that the reform of the P2SK Law is oriented not only toward growth but also toward public protection. Digital transformation has created various new economic opportunities, but at the same time presents risks that require more adaptive oversight. The presence of clear regulations will create legal certainty while protecting the public from harmful practices. Thus, the development of financial innovation can proceed healthily without compromising public security and interests.
Furthermore, regulations regarding Danantara debt securities, Indonesia’s international financial center, the settlement of bad debts for MSMEs, the mineral and strategic commodity exchange, and the bank restructuring mechanism demonstrate the comprehensive scope of reform. These various instruments are designed to strengthen the national economic capacity in the long term. Resolving MSME financing issues, for example, can reopen productivity opportunities for small businesses that have previously faced limited access to capital. Meanwhile, the development of an international financial center has the potential to increase Indonesia’s competitiveness in attracting global investment and strengthen the country’s position as a center of regional economic growth.
Meanwhile, Finance Minister Purbaya Yudhi Sadewa assessed that financial sector reforms under the P2SK Law need to be continuously accelerated to support the achievement of Indonesia’s development goals. The statement emphasized that regulation is not an end in itself, but rather an instrument for creating stronger and more sustainable economic governance. The alignment of the regulatory framework established through the amendments to the P2SK Law will strengthen inter-institutional coordination in maintaining the stability of the national financial system. Greater synergy between fiscal, monetary, and financial services authorities will enhance the effectiveness of policies in addressing the challenges posed by the COVID-19 pandemic.
in the face of various evolving economic challenges.
Furthermore, the hope that the P2SK Law will serve as a solid legal foundation for the development of an inclusive and sustainable financial sector is highly relevant to Indonesia’s current needs. High economic growth will be meaningless if it is not accompanied by equitable distribution of benefits to all levels of society. Therefore, financial sector reform must be directed at expanding access to financing, improving financial literacy, and strengthening consumer protection. With this approach, the financial sector can become a vehicle for reducing economic disparities while accelerating social mobility.
In line with this, Amin Ak, Member of Commission XI of the Indonesian House of Representatives (DPR RI), views the amendment to the P2SK Law as a crucial step in strengthening the foundations of the national financial system amidst increasingly complex global economic challenges. This view demonstrates that regulatory reform is not solely undertaken to comply with legal requirements, but also to build a healthier, more transparent, and accountable financial system. Public trust in the financial sector is a key asset for sustainable economic growth. Therefore, strengthening governance and oversight must be an integral part of the reform agenda.
Furthermore, the idea that the financial sector should be an instrument for equitable distribution of prosperity provides a crucial social dimension to the reform of the P2SK Law. Indonesia needs a financial system that is not only resilient to global turmoil but also capable of promoting equitable development. As access to financial services expands and economic opportunities become more open, the benefits of growth will be felt by more segments of society. This is the essence of inclusive development, which has long been a key government agenda.
*) Macroeconomist and Fiscal Policy Researcher.