Bank Indonesia Day Date in the current year: July 5, 2024

The history of banking in Indonesia can be traced back to the mid-18th century. The first bank in the Indonesian archipelago, Bank van Courant (later renamed De Bank van Courant en Bank Van Leening), was established in 1746 to support trade and provide loans to employees of the Dutch East India Company. It had to close down in 1818 due to a financial crisis in the Dutch East Indies.

In 1826, King of the Netherlands William I granted his permission to establish a new private bank in the Dutch East Indies. The Bank of Java (De Javasche Bank) was founded in 1828. It was a note-issuing bank that issued and regulated the Netherlands Indies gulden. By 1930 the bank had over 20 branches throughout the Dutch East Indies, a subsidiary in Amsterdam, and an office in New York City.

During World War II, the Dutch East Indies was occupied by Japan. The occupational authorities closed all banks in the Indonesian archipelago and replaced the Bank of Java with the Southern Development Bank (Nanpo Kaihatsu Ginko) which played the role of the central bank during the occupation. The bank issued the Netherlands Indies gulden and later the Netherlands Indies roepiah.

Two days after the surrender of Japan on August 15, 1945, Sukarno and Mohammad Hatta proclaimed the independence of Indonesia, sparking the Indonesian National Revolution. In its attempts to regain control over the archipelago, the Netherlands Indies Civil Administration reopened the Bank of Java to resume the issuing and support the circulation of the Netherlands Indies gulden.

To counteract this and maintain economic sovereignty, the Republican government of Indonesia established Bank Negara Indonesia on July 5, 1946. Several months after its establishment, the de facto new central bank of Indonesia began to issue the first currency of independent Indonesia called Oeang Republik Indonesia (ORI).

In December 1949, the Netherlands finally recognized Indonesia’s independence. The Bank of Java once again became the note-issuing bank of Indonesia, and Bank Negara Indonesia was transformed into a development bank. In 1951, the Sukarno government nationalized the Bank of Java. On July 1, 1953, it was replaced by Bank Indonesia.

For the next decade and a half, Bank Indonesia acted as the national bank of Indonesia, issued national currency (the rupiah), and carried out commercial activities such as providing loans. In 1968, it was was officially transformed into the central bank of Indonesia and ceased commercial activities. In 1999, Bank Indonesia became independent from the government.

As the central bank of Indonesia, Bank Indonesia is tasked with maintaining the stability of the national currency through the management of the country’s monetary and payment system, as well as ensuring the stability and effectiveness of the national financial system.