Supervision of Islamic Financial Cooperation

supervised Cooperative management of Islamic Financial Services and units of Islamic Financial Services to make sure that such Cooperative has grown properly and can receive the trust of stakeholders. 4 By referring to BMT, its surveillance sharia has some urgency value 5 . BMT is Islamic Financial Institutions under the supervisor of the Ministry of the Cooperative, so it does not have flow control and strict supervision as Bank Sharia or BPRS where there was Bank Indonesia routinely supervise, request a report and look for loopholes irregularities made by the bank. Then the existence of DPS at BMTKJKS attached indirectly into the institution is meant as internal audit in addition to the coaching given by the government. In PERKAMEN No. 91 on the JUKLAK Petunjuk Pelaksanaan. The operational guidelines DPS internal oversight functions mentioned in article 32, which reads: Sharia Supervisory Board has a duty to supervise the implementation of business activity Financial Service Cooperative ShariaIslamic Financial Services unit based on Islamic principles and report the results to the supervisory authorities. What is meant by officials here are included in the general provisions are, government rules stipulated ministers and authorities certify the deed, changes to the constitution and the dissolution of the Cooperative in the Central, provincial, and districtcity. 4 Novita Dewi Masyitho, Kajian Rechtdomatiek Empiric Undang-undang No. 1 tahun 2013 Tentang Lembaga keuangan Mikro LKM Atas Status Badan Hukum dan Pengawasan Baitul Maat Wat Tamwil BMT, accessed on 15 july 2016,www.eprints.walisongo.ac.id, 5:15 p.m 5 Op.cit, p.37-38

2. Settings, Controlling, and Guidance of Microfinance Institution by

Financial Service Authority The Setting, controlling, and guidance of Microfinance Institution were conducted by the Financial Services Authority. In supervise Microfinance Institutions, Financial Services Authorities cooperate with the Ministries of Cooperatives and Ministry of Internal Affairs as described in Article 28 of Law No. 1 of 2013. The guidance and supervision were delegated or represented by local government DistrictCity. According to the FSA and the Ministry, when the Local government DistrictCity is not ready for the task as a representative of the FSA and the Ministry in regulating and supervising microfinance institutions in the region. Then the FSA will makes cooperation with the ministry of cooperatives and the Ministry of Internal Affairs to appoint other agencies or another party as a delegate to carry out supervision and guidance of microfinance institutions. MFI are also required to submit financial report to the Financial Services Authority every four months, or such other reports stipulated in the regulations of the Financial Services Authority. Besides microfinance institution also must publish a financial report as one of the principles of openness of Microfinance Institutions. 6 Provisions of Article 8 of Law about FSA are: 7 6 Indonesia, POJK number 14POJK.052014 of Guidance and Supervision Microfinance Institution. 7 Indonesia, the Law on Financial Services Authority section 8 on law number 21 of 2011 “To implement the assignment of the task of regulation referred to in Article 6, the FSA has the authority to; a. Establishing the Implementing regulation of this law; b. Establishing the law and regulation legislation on the sector of financial service; c. Establishing regulation and decree of FSA; d. Establishing regulation on the supervision in the sector of financial service; e. Establishing the policy on the assignment implementation of FSA; f. Establishing regulation on establishment procedures the written instruction for Financial Service Institution and certain party; g. Establishing regulation on establishment the statutory manager in the Financial Service Institution; h. Establishing organization structure and infrastructure, as well managing, maintaining, and administering on the wealth and liability; and i. Establishing regulation on the imposition procedures of sanction in the accordance with the provision of the law and regulation in the sector financial service.” And also in further provisions are set forth in article 9 of Law FSA are: 8 “To implement the assignment of supervision as set forth in Article 6 above, FSA has authority on: a. Establishing the operational supervision policy toward the activity of financial service; b. Supervising the implementation of supervisory duties performed by the Chief Executive; c. Conducting Supervision, examination, investigation, consumer protection, and other measures towards Financial Service Institution, agent, andor supporting financial service as set forth in the law and regulation in the sector of financial service; d. Providing the written instructions to Financial Service institution andor certain party; e. Making appointment statutory management; 8 Indonesia, the Law number 21 of 2011 on Financial Services Authority section 9