THE ISSUING OF BANK INDONESIA'S GUARANTY, AND THE ISSUING OF BANK GUARANTY FOR RECEIVING FOREIGN LOAN BY STATE-OWNED BANKS AND REGIONAL DEVELOPMENT BANKS
HAVING A LICENSE IN FOREIGN EXCHANGE OPERATION (Presidential Decree No. 24 of 1998, dated January 23, 1998)
THE PRESIDENT OF THE REPUBLIC OF INDONESIA Considering:
a. that in the context of reviving national economic activities, particularly international trade activities, it is deemed necessary to enable Bank Indonesia to grant guaranty for foreign loans made by and Letter of Credit opened by Banks;
b. that to give more support to national bankers in providing funds for the financing of economic activities, it is also deemed necessary to continue to allow State-Owned Banks and Regional Development Banks already having a license for foreign currency operations, to receive foreign loans and to issue bank guaranty for the indicated loans.
c. that in relation thereto, ft is deemed necessary to stipulate a Presidential Decree on the Issuing of Bank indonesia's Guaranty and the Issuing of Bank Guaranty by State-Owned Banks and Regional Development Banks already having a license for Foreign Currency Operation.
In view of:
1 . Article 4, paragraph (1), of the 1945 Constitution;
2. Law No. 13 of 1968 on Central Bank (Statute Book No. 63 of 1968; Supplement to Statute Book No. 2865);
3. Law No.7 of 1992 on Banking (Statute Book No. 31 of 1992; Supplement to Statute Book No.3472);
4. Government Regulation No. 1 of 1992 on the Realization of Exports-imports and Foreign Exchange Traffic (Statute Book of 1982 No. 1, Supplement to Statute Book No. 321 0);
5. Presidential Decree No. 59 of 1972 on the Receiving of Foreign Credits;
To stipulate :
PRESIDENTIAL DECREE ON THE ISSUING OF BANK INDONESIA'S GUARANTY, AND THE ISSUING OF BANK GUARANTY FOR RECEIVING FOREIGN LOANS BY STATE-OWNED BANKS AND REGIONAL DEVELOPMENT BANKS HAVING A LICENSE IN FOREIGN EXCHANGE OPERATIONS.
Article 1
In this Presidential Decree, what is meant by:
1 . Bank is a commercial bank as intended in Law No. 7 of 1992 on Banking
which has been permitted to do foreign exchange operations;
2. State-Owned Bank is a Bank, whose majority of shares is owned by the State;
3. Bank lndonesia's Guaranty is Bank lndonesia's obligation to repay to foreign
banks in case the Bank receiving loans from abroad and/or opening a letter of
Credit is malfunctioning;
4. Foreign Loan is all forms of loans or other obligations towards non residents in
foreign currencies or Rupiah embracing Giro, Savings, Deposits, Call Money,
obligations in money market, and/or securities issued by banks in the primary
money/capftai market, both domestic and foreign.
Article 2
Bank Indonesia can grant a guaranty for a foreign loan made by and a Letter of
Article 3
(1) State-Owned Banks and Regional Development Banks which have been
permitted to do foreign exchange operations, can receive foreign loans at the
expense of the Banks concerned.
(2) State-Owned Banks as intended in clause (1) can issue a bank guaranty or can
act as a guarantor for the repayment of a foreign loan received by a state owned
enterprise, regional government owned enterprise or a private company.
(3) The activities intended in clauses (1) and (2) can only be carried out by the
Banks concerned as far as they meet the provisions determined by Bank
Indonesia.
Article 4
Other provisions required for the implementation of this Presidential Decree, shall
be formulated in the Decision of Bank lndonesia's Board of Directors.
Article 5
With the enforcement of this Presidential Decree :
a. The provisions indicated in Article 3 and Article 4, clause (1) of Presidential
Decree No. 59 of 1972 on the Receiving of Foreign Credits, as far as it is related
to Bank Indonesia, State-Owned Banks and Development Banks which have
been permitted to do foreign exchange operations; and
b. Presidential Decree No. 15 of 1991 on the Receipt of Foreign Loans and the
Banks and Regional Development Banks which have been stipuiated as Foreign
Exchange Banks; are declared to be no longer in force.
Article 6
This Presidential Decree comes into effect as from the date of stipulation.
For public cognizance, let this Presidential Decree be promulgated by publishing it
in the Statute Book of the Republic of Indonesia.
Stipulated in Jakarta on January 23, 1998
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
Sgd
SOEHARTO
Promulgated in Jakarta on January 23, 1998
THE MINISTER/STATE SECRETARY
Sgd
