JAKARTA. Bank Indonesia (BI) revoked the licenses of 36 money changers in areas across Indonesia between January and September, 12 of which were located in Batam, the central bank said in a report.

Working with the National Police headquarters, BI took legal action against the companies, allegedly for illicit practices, in its efforts to prevent foreign currency speculation and money laundering.

BI group head of payment system oversight and money changer supervision, Ida Nuryanti, said on Thursday that the central bank would more closely monitor non-bank foreign currency exchange business activities to be alert for currency speculation that could affect the rupiah exchange rate.

“Foreign currency transactions through money changers account for only 2 percent of the total foreign currency transactions in the country. We cannot consider it insignificant, however,” said Ida.

“BI considers that there can be a growingly significant impact from foreign currency transactions made at money changers, one of which is that they can affect the movement of the rupiah exchange rate and are prone to money laundering, which continues to increase,” she added.

Ida was speaking during an event to introduce the 2014 BI regulation on non-bank foreign currency exchange business activities.

Ida said that the amended 1999 BI Law, which would be deliberated soon, would set out criminal sanctions for money changers deemed guilty of violating regulations, such as failing to regularly report their transactions to BI.

According to BI official data, Indonesia has 916 money changers, 346 of which are located in Jakarta, 128 in Bali and 128 in Batam, while the remaining 314 are located in other areas across the country.

Total foreign currency transactions through money changers reaches Rp 7.9 trillion (US$648.18 million) selling and Rp 7.8 trillion buying on average per month.

Riau Island-chapter BI head Gusti Eka Raizal said BI had revoked the permits of 12 money changers in Batam for their failure to report their foreign currency transactions to the central bank.

“We had summoned them several times but they refused to comply with our summons, so we revoked their licenses,” said Gusti. (Fadli)

Editor: Yudho Winarto