Financial Consumer Protection in Indonesia: Towards Fair Treatment for All

Abstract

The Indonesian financial system has a long story. Financial system hardly existed before 1966 that is when the commercial banks faced the emergence time. After 1966 under Soeharto governance, central banking and banking sector regulation as the basis of the current financial system in Indonesia was introduced and implemented. After 17 years later, financial structure of Indonesia had the first reformation. In total, there are five phases in Indonesian financial system development between 1966 and the present time (Hamada in Transformation of the Financial Sector in Indonesia, 2003). The first phase, called as formative period, started from 1966 until 1972. The second phase, started from 1973 until 1982, is the period of policy-based finance under soaring oil prices. The third phase, started from 1983 until 1991, is financial-reform period. The fourth phase, started from 1992 until 1997, is the period of financial system’s expansion. The last phase, started from 1998 until present, is the period of financial restructuring, which is in this period the government more concern about consumer protection in financial industry. Financial consumer protection is necessary to increase access and usage of financial services. It can build trust between consumer and financial system, hence in encouraging financial inclusion.