Part 1: History of the Central Bank Development in the Indonesian Archipelago - Bank Sentral Republik Indonesia
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March 25, 2019

Long before the arrival of Europeans, the Indonesian Archipelago had become the center of international trade. Meanwhile, in Europe mercantilism had developed into an industrial revolution and spurred the trade activities in Europe. This sparked the emergence of simple banking institution, such Bank van Leening in the Netherlands. This banking system was then taken by the Westerners while expanding their trade activities and colonizing the Indonesian Archipelago at the same time. In 1746, VOC in Java established De Bank van Leening which subsequently turned into De Bank Courant en Bank van Leening in 1752. This was the first bank set up in the archipelago and the pioneer the banking sector for the following years. On 24 January 1828, the Makasar Administration founded a circulation bank called De Javasche Bank (DJB). For decades this bank was operating and developing based upon a exclusive right of the Dutch Kingdom rulers. Such exclusive became a act, namely the DJB Bank Act of 1922.

The Japanese occupation virtually halted the DJB activities and the Dutch Indies banking for a while. During the revolution era, the Dutch Indies Administration was confronted with the power dualism, between the Republic of Indonesia (RI) and Nederlansche Indische Civil Administrative (NICA). Likewise, the banking institution was divided into two, DJB and other Dutch Banks in the NICA territories, and “Jajasan Poesat Bank Indonesia” and Bank Negara Indonesia in the Republic of Indonesia’s territories. The Round Table Conference in 1949 ended the clashes between Indonesian and Holland. As a result, DJB was determined as the Central Bank for the Republic Indonesian Serikat (RIS). This status remained until the return of the Republic of Indonesia to the unitary state. Afterwards, as sovereign nation and state, the Republic of Indonesia nationalized its Central Bank. As from 1 July 1953, DJB became Bank Indonesia as the Central Bank for the Republic of Indonesia.



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