FROM PREHISTORY TO CONTEMPORARY: HOW INDONESIAN FINANCE HAS EVOLVED

Western powers brought with them during their arrivals to Nusantara their own financial system. In 1746, the first bank in the area named Bank van Courant was established, offering loans with different kinds of collaterals, but was then closed after some time due to a financial crisis. De Javasche Bank was afterwards founded by Dutch Kingdom administration in 1828 with several special rights granted to them, including the power to produce and disseminate its own currency. Eric Sugandi from Kenta Institute notes that both local and foreign banking institutions across the country – some commercial and others operating for social benefit – were established back then, aiming to facilitate the economic activities of entrepreneurs throughout the Dutch colonial era. De Javasche Bank was substituted by a Japan-made monetary institution during their colonial period, before being brought back and nationalized as a central bank in 1953.

In 1946, BNI was founded as a fusion of a foundation established just after the declaration of independence. This bank was regarded as a development bank before becoming a general bank in 1955. July 5th, the day on which this oldest bank in Indonesia was founded in 1946, is then commemorated as National Bank Day to this day. More banks have flourished ever since the rise of BNI, gradually offering people more alternatives regarding financial services, including Muamalat Bank, known as the first Islamic bank in Indonesia, established in 1991.

Now, more and more people are becoming integrated to national and global financial systems, engaged by using a myriad of financial services offered by different bank and non-bank financial institutions alike. To this day, the Indonesian administration keeps attempting to make policies aiming to lower the costs of engagement with the financial system in hopes for more Indonesians to become more involved in and gain more benefit from diverse financial services.