CBC Banking must return judol revenues to the state

CBC: Banks must return judol revenues to state
Illustration of online gambling (MI)

BANKING is considered necessary to return the profits from online gambling transactions (judol) to the state. President-director of the Center for Banking Crisis (CBC) Achmad Deni Daruri said that to stop online gambling in Indonesia, banks must close the online gambling payment system.

“The way to destroy judol is very simple because online gambling and other business activities follow the principle that the bank follows the business. If you want to destroy judol activities, destroy the payment system that supports it. Namely, banking and non-banking financial institutions,” said the president of the Center for Banking Crisis (CBC) Achmad Deni Daruri via his press release in Jakarta, Tuesday (Sept. 7).

So far, Deni says, Bank Indonesia has made it easier for online gamblers to conduct banking transactions. Meanwhile, the Financial Services Authority (OJK), as the banking regulator, seems to be ignoring this.

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“Recently, in order to combat online gambling activities, the OJK ordered banks not only to block accounts but also to return the profits from these transactions,” he said.

According to him, the establishment of payment services by online gambling owners can be seen as a strategy to facilitate large and frequent financial transactions. This is a common feature of the judol industry.

By having their own payment service, judol owners can reduce their reliance on third-party payment service providers, which may have transaction restrictions or be expensive.

Also read: West Java is the province with the most online gambling players in Indonesia, transactions reach IDR 3.8 trillion

“Moreover, by having an internal payment system, they can have more control over the transaction process, including the speed and security of money transfers,” Deni said.

From a banking perspective, he continued, cooperation with judol’s payment services could entail reputational and legal risks, given that judol often operates in a grey area in terms of legality.

Banks can see potential profits from the high transaction volumes generated by this sector. Therefore, banks must perform careful risk assessments and ensure they comply with all applicable regulations before partnering with this type of payment services.

Also read: Islamic Student Association supports government task force’s achievements to eradicate online gambling

In the future, he said, both OJK and BI are required to conduct investigative audits of banking and non-banking financial institutions suspected of being related to judol, while they have so far failed to conduct routine audits of financial institutions.

Judol’s special investigation audits enable financial institutions to investigate weaknesses in their internal control systems so that they can take preventive measures to reduce the risk of violations.

In order to prevent judol owners from having payment services, Deni has proposed a number of things. First, increasing cooperation between government institutions, such as the Ministry of Communications and Information (Kominfo), OJK and the Center for Reporting and Analysis of Financial Transactions (PPATK). It is important to identify and block transactions related to online gambling.

Also read: The Online Gambling Taskforce must immediately investigate the cash flows in the banking system

Secondly, he continued, he introduced stricter rules for financial institutions and electronic payment services to ensure they do not process transactions related to online gambling.

“Third, the use of data analytics technology and artificial intelligence to detect suspicious transaction patterns that may be related to judol,” Deni said.

Fourth, he continued, Kominfo’s blocking of access to online gambling sites should be further improved, including cutting off access to newly identified sites. Fifth, stricter law enforcement against online gamblers, including the payment service providers involved.

“Sixth, public education about the risks and negative consequences of online gambling, and how to report suspicious activities,” he said.

Seventh, encourage financial institutions to report suspicious activities to PPATK and take preventive measures, such as closing accounts involved in online gambling. Eighth, strengthen international cooperation to deal with online gambling sites operating in different countries.

Ninth, Deni continued, banking regulations must be improved and strengthened to prevent bank accounts from being used as a means for online gambling.

“Tenth, increase the awareness and technical capabilities of employees in the banking and financial sector to recognize and handle transactions related to judol,” he explained.

Apart from that, Deni said, Bank Indonesia was more cautious not to be caught off guard by giving permission to payment service providers owned by judol entities. First, a thorough understanding of the applicable regulations is crucial.

“BI has established strict rules regarding the licensing of payment system service providers, including due diligence and obligations for anti-money laundering and prevention of terrorist financing (APU-PPT). Including the implementation of the Know Your Customer (KYC) principle,” concluded Deni (Z-8)

Putra Ananda

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