Banking - OJK values Pegadaian and BSI as most ready to run bullion business

Banking - OJK values Pegadaian and BSI as most ready to run bullion business The Financial Services Authority (OJK) has issued OJK Regulation (POJK) Number 17 of 2024 concerning the Implementation of Bullion Business Activities on November 14, 2024. The Head of the Department of Regulation and Development of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions at OJK, Ahmad Nasrullah, believes that currently there are two major players ready to run the bullion business, namely Pegadaian and Bank Syariah Indonesia (BRIS). He said both have met the regulations in terms of infrastructure and capital set at IDR14 tn. Indeed, there are currently two major players, Pegadaian and BSI, who are most ready in terms of infrastructure and capital. The OJK implemented a requirement of IDR14 tn, so both are the most prepared, frankly," he said in a webinar on the Financial Services Authority Regulation (POJK) Number 17 of 2024 concerning the Implementation of Bullion Business Activities. (Source : Kontan) Comment : We believe both BSI and Pegadaian have an extensive network, particularly in rural areas, which could facilitate wider access to gold investment for the general public. Additionally, with substantial capital, both institutions can meet the regulatory requirements and invest in necessary infrastructure and technology. On the other hand, the gold market is subject to significant price fluctuations, which can impact the profitability of bullion businesses. As such, continuing policy refinement can affect the smooth operations and development of bullion businesses. The introduction of a regulated bullion market can help stabilize the domestic financial system by providing a safe and transparent investment avenue. OJK's decision to endorse Pegadaian and BSI for the bullion business is a promising development that could have a positive impact on the Indonesian banking and financial market. We maintain our overweight stance on the banking sector, with BBCA and BMRI as our top picks. For investors seeking exposure to Syariah banking, BRIS remains our preferred choice.