working to set up the institutional framework, coordinating mechanisms and enhancing governance. on the provincial side, a number of sub - national governments have undertaken major reforms of their public sector systems, introducing among others performance - based budgeting and one - stop public services. the legal arrangement is also directed to improve investment climate, both directly by promulgating investment law no. 25 of 2007 and indirectly by imposing open capital account through promulgating law no. 24 of 1999. the later is set up to improve the financial infrastructure to support capital inflows, both for direct investment and portfolios. to enhance macroeconomic stability, government and so does the monetary authority works hand in hand and commits to enhance fiscal and monetary discipline as well as strengthening the financial architectures. learning from the failure of 1997 – 1998 crises, our policies were focused on enhancing policy transmission, improving financial market efficiency through prudential practices and financial market deepening. to this point forward, the government was improving their capacity on fiscal budgeting, to be more specific, the adoption of active debt and cash management. they are also fully committed to improve fiscal sustainability by reducing debt to gdp ratio. steps were also taken in the area of monetary policy framework. since 1999, bank indonesia was mandated to achieve single objective of price stability, both in terms of inflation and the exchange rate and at the same time was given independency on our policy conduct. in 2005, bank indonesia has fully adopted inflation targeting framework marked by the introduction of bi rate as the policy rate to increase the policy effectiveness in achieving the inflation target set by the government. in 2008, further enhancement has been done in the area of monetary policy implementation by the introduction of overnight interbank rate as our operational target to improve the effectiveness of the monetary policy. institutional reform in the financial sector has been done by improving the soundness and efficiency of the financial market through the combination of imposing prudential practices and enhancing market deepening. financial sector reforms are crucial to raising indonesia ’ s growth rate and enhancing the economy ’ s resilience. in banking industry, reform is conducted by strengthening bank ’ s capital, introducing risk management practices and world bank, investing in indonesia ’ s institutions for inclusive and sustainable development, 2008. governance, and not to mention improving supervisory capabilities. these were done by adopting basel core principles and promoting mergers and acquisitions. the same reforms have conducted in the capital market, debt market, as well as non - bank financial institution. one of the most

making with sufficient public consultation. third, how coordination is built between the central government, regional governments, and relevant authorities, thereby avoiding overlapping policy making. 5. today, we gather to inaugurate fspi and address the concern for coordination issues between authorities in indonesia. in fspi, we will consistently cooperate, build coordination, and immediately catch up indonesia ’ s lagging development in acceptable payment system. 6. we certainly expect the support and commitment of some of you as the heads of the relevant ministries and authorities to realize it. in addition, we believe that on the technical level, all technical teams need the commitment and direction of their respective leaders to allow effective role playing. distinguished ladies and gentlemen, “ bi ’ s duties and authorities in ps ” 7. every ministry and authority present today has their own regulations. in its capacity as a central bank, bi ’ s mandates specified in the law include not only ensuring effective monetary policies, but also maintaining financial system stability and implementing smooth, safe, efficient, and reliable payment system. furthermore, the law also mandates bank indonesia to grant permits for payment system implementation. 8. implementation of such mandates correlates and supports one another in order to achieve the objectives of bank indonesia. the reason is the roles of monetary policies in affecting real sector will be transmitted through financial and payment systems. 9. availability of adequate instruments and infrastructures of payment system, which can support financial system activities, will serve as a highly significant factor to facilitate public payment transactions. without such supports, monetary policies will not be transmitted effectively. distinguished ladies and gentlemen, “ development of ps in indonesia ” 10. in line with national economic growth, indonesian people make more payment transactions every year. various non - cash payment instruments have started to become an inseparable part of our daily lives. 11. the use of instruments, such as debit cards, credit cards, and electronic money, keeps developing, as followed by growing new payment channels. through the internet, mobile banking and internet banking facilitate transactions made by the people. the strong penetration of internet also offers a new online shopping medium for the people, which is also known as e - commerce. 12. if we follow the recent growth of e - commerce, it is unbelievable. we see that the rapid growth of e - commerce matches the penetration of cellular phones. facing such development, we as the regulator may not delay in our response. we should have been able to make an architecture, making all industries develop