Bank Indonesia warns illegal money changers to apply for license
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Bank Indonesia (BI) has warned unlicensed non-bank money changers to apply for a license during the ongoing transition period as a requirement to operate legally.
The central bank has imposed the transition period since Oct. 6 last year when it issued a regulation and circular concerning the licensing requirement. The unlicensed money changers were given until April 7 to submit applications.
BI will work together with the National Police, the Financial Transaction Reports and Analysis Centre (PPATK) and the National Narcotics Agency (BNN) to crack down on illegal money changers that fail to comply with the regulation after the transition period ends.
“Applicants need only to submit a written application attached with several documents to Bank Indonesia. It is free of charge,” said BI executive director of payment system policy and supervision Eni V. Panggabean in a press briefing on Monday.
Money changers, formally called non-bank foreign currency exchange businesses, comprise transactional activities related to currency exchange through a trading mechanism of foreign currency banknotes as well as the purchase of traveler’s checks.
“One of the requirements for non-bank money changers to apply for a license is to become a limited company that should be fully owned by Indonesian citizens,” Eni said.
The central bank’s warning came following findings by the National Police, the PPATK and the BNN regarding the rising trend of money laundering activities involving illegal money changers, which were used for transactions related to graft, narcotics and terrorism.
Questions & Answers
Q.What is the primary reason Bank Indonesia has introduced this new licensing requirement for money changers?
What is the primary reason Bank Indonesia has introduced this new licensing requirement for money changers?
The central bank's warning follows findings by authorities, including the National Police, PPATK, and BNN, concerning an increasing trend of money laundering activities. These illegal money changers were being used for transactions linked to graft, narcotics, and terrorism.
Q.What are the key requirements for non-bank money changers to obtain a license from Bank Indonesia?
What are the key requirements for non-bank money changers to obtain a license from Bank Indonesia?
Applicants must submit a written application along with several documents to Bank Indonesia. A crucial requirement is for the money changer to operate as a limited company, which must be entirely owned by Indonesian citizens.
Q.Which government bodies will collaborate with Bank Indonesia to enforce the new licensing regulations?
Which government bodies will collaborate with Bank Indonesia to enforce the new licensing regulations?
Bank Indonesia will work alongside the National Police, the Financial Transaction Reports and Analysis Centre (PPATK), and the National Narcotics Agency (BNN). They will collectively crack down on illegal money changers failing to comply after the transition period.