Lembaga Penjamin Simpanan (LPS) known as IDIC, is a legal independent institution which was formed at 22 September 2004 by Law No. 24 Year 2004 concerning Indonesia Deposit Insurance Corporation and in effect since 22 September 2005.
The functions of IDIC are insuring depositors’ deposits and actively promoting the stability of banking system according to its authorities. IDIC insures deposits in all conventional banks and islamic based based which operate within the territory of the Republic of Indonesia, such as both commercial banks (foreign banks, joint venture banks, private local banks, regional development banks, state-owned banks) and rural banks.
Financial sources of IDIC are originated from:
- The initial capital of the IDIC is set forth for the amount of Rp4 trillions which is a separately allocated state assets.
- Membership contribution which is paid at the first time a bank becomes IDIC deposit insurance’s member.
- Insurance premiums which are paid each semester
- Earnings from insurance reserve investment
The body of the IDIC consists of the Board of Commissioners and the Chief Executive Officer. The Board of commissioners is policy maker of the IDIC and led by a Chairman. Chief Executive Officer is one of the member of Board of Commissioners who oversees the operational activities of the IDIC.