Legal Aspect in the Financial Service Industry’s Default in Indonesia

Abstract

During the COVID-19 pandemic, the business world in Indonesia was colored by news of defaults by several leading companies in Indonesia. The problem studied in this study is the responsibility of financial services companies (State owned enterprises) and the role of the Otoritas Jasa Keuangan (OJK) as a financial services supervisory agency for the Indonesian financial services industry that has defaulted. For the normative juridical research method, the main source is secondary data. Qualitative normative data analysis. The results show that financial service companies that have failed to pay their customers because of their mistakes must be legally responsible for the le-gal consequences and morally responsible for their negligence in not adopt-ing ethical principles in doing business. This responsibility assumes the form of having to pay for the losses suffered by customers when sued, and to restore the confidence of the public, which has been eroded in State owned enterprises (SOE), in addition to their disappointment with the management of State-owned enterprises, SOEs that do not heed ethical principles in doing business. In the case of defaulting SOE, OJK as the supervisor has not played its role of taking early preventive actions aimed at averting irregularities from occurring due to its inability to detect problems during its regular supervision. This shows that the periodic supervision carried out by the OJK is not yet effective.