By Stefanno Sulaiman
JAKARTA (Reuters) -A new draft of a contentious bill dealing with Indonesia’s financial system has watered down an earlier clause allowing the parliament to dismiss the chief of the central bank, a document reviewed by Reuters on Wednesday showed.
The new draft, however, still increases parliament’s role in evaluating the performance of Bank Indonesia, which has caused concern among investors about political interference in the bank by the wide coalition of President Prabowo Subianto as he looks to increase the pace of economic growth.
Parliamentarians said last month that the bill contained provisions giving parliament the power to recommend the removal of Bank Indonesia’s board of governors as well as strengthening the bank’s role in supporting economic growth.
A new version of the bill, provided to Reuters by the head of parliament’s financial commission Mukhamad Misbakhun, no longer contains an explicit provision allowing parliament to recommend dismissals.
Instead, it calls for the performance of the central bank and other financial regulators to be reviewed by parliament, whose recommendations in such a review would be binding.
This version is to be brought to a wider parliamentary vote at a later date, after which it will be passed into law, Misbakhun said.
Currently, BI’s board members can only be removed if they resign, are convicted of a crime or are mentally or physically unable to perform their duties.
The new version of the bill adds that board members can be dismissed if they are found to have broken the law.
It has an additional provision mandating BI to implement “policy and policy mixes that create an economic environment conducive to real sector growth and job creation”, confirming earlier reports about a wider BI role on promoting economic growth.
The bill also gives police a wider role to investigate financial crimes.
Under current rules, investigations are typically carried out under the coordination of the Financial Services Authority, with police officers usually working with investigators from the financial regulator.
(Reporting by Stefanno Sulaiman and Gayatri Suroyo, editing by Ed Osmond)
