● Composit e Rat ing For Branch Off ices Of Foreign
Rural Bank 1. Objectives
The provisions concerning bank rat ing are int ended
f or use as:
● a benchmark f or bank management in assessing
w het her t he bank is managed according t o sound b an k i n g p r i n ci p l es an d i n co m p l i an ce w i t h
prevailing regulations.
● a benchmark f or det ermining t he course of bank
supervision on bot h an individual basis and f or t he
banking syst em as a w hole.
2. Rating System
In essence, rat ing of banks t akes place t hrough a
qualit at ive assessment of t he various aspect s aff ect ing
t he condit ion and grow t h of a bank, covering Capit al,
Asset s Qualit y, M anagement , Earnings, and Liquidit y
(CAM EL). Important aspects of the rating are described as f ollow s:
● The out come of t he rat ing is expressed as one of
four levels: Sound, Fairly Sound, Poor, and Unsound.
● Th e w ei g h t i n g o f each CA M EL f act o r f o r
Commercial Banks and Rural Banks is as f ollow s:
● Enf orcem ent of regulat ory provisions in w hich
sanct ions are linked t o Com m ercial Bank rat ing
apply t o violat ion and/or lending in excess of t he
Legal Lending Limit violation of applying know your
cust omer (KYC) principle, violat ion of t ransparency in b an k p ro d u ct in f o rm at io n an d u se o f t h e
● Fact ors t hat w ould result in dow ngrading of bank
rat in g t o u n so u n d in clu d e: in t ern al co n f lict s,
i n t er f eren ce b y p ar t i es o u t si d e t h e b an k ’s
management , w indow dressing, bank-w it hin-bank
pract ices, suspension f rom clearing, and ot her
b an k in g p ract ices t h at w o u ld jeo p ard ize t h e sust ainabilit y of bank operat ions.
E. Self-Regulatory Banking (SRB) Regulations
1. Guidelines for Formulation of Bank Credit Policy
Banks are required t o inst it ut e w rit t en credit policy
guidelines elaborating at least the follow ing key points
st ipulat ed in t he Guidelines f or Formulat ion of Bank Credit Policy:
a. Prudent ial principles in credit operat ions.
b. Organization and management of credit operations.
c. Credit approval policy.
d. Credit document at ion and administ rat ion. e. Credit cont rol and set t lement of problem loans.
Banks are required t o maint ain consist ent compliance
w it h t he f ormulat ed Guidelines on Bank Credit Policy.
2. Internal Audit Unit at Commercial Banks
Commercial Banks are required to establish an Internal
Audit Unit as part of t he applicat ion of St andard Pract ices f or t he Bank Int ernal Audit Funct ion. The
Int ernal Audit Unit is a unit direct ly responsible t o t he
president direct or. The Int ernal Audit Unit has t he
f ollow ing t asks and responsibilit ies:
● A ssi st t h e p resi d en t d i r ect o r an d b o ard o f
co m m i ssi o n er s i n t h ei r su p er vi so r y t ask s b y
elaborat ing in operat ional t erms t he planning and
im plem ent at ion of audit and t he m onit oring of audit f indings;
● Co n d u ct an alysis an d evalu at io n in f in an ce,
accounting, operations, and other activities through
on-sit e examinat ion and off -sit e supervision;
● Ident if y all possibilit ies f or improving eff iciency in
● Pr o vi d e o b j ect i ve reco m m en d at i o n s f o r
i m p r o vem en t an d i n f o r m at i o n o n act i vi t i es
examined at all levels of management .
3. Compliance Director
Banks are required t o appoint a member of t he Board of Directors or of the head of management of Foreign
Bank Branch Office as Compliance Director, responsible
f or:
a. Est ablishing t he necessary measures f or ensuring
t he compliance of t he Bank w it h all Bank Indonesia
r eg u l at i o n s an d o t h er p revai l i n g l aw s an d
regulat ions w it hin t he f ram ew ork of upholding prudent ial principles;
b. M onit oring and ensuring t hat bank operat ions do
not deviat e f rom prevailing regulat ions;
c. M onit oring and ensuring t he compliance of t he
bank w it h all agreement s and commit ment s made by t he bank w it h Bank Indonesia.
4. Business Plan and Annual Budget Commercial Bank
a. Ban k m u st f o rm u lat e a realist ic b u sin ess p lan
addressing ext ernal f act ors aff ect ing t he cont inuit y
of t he bank’s operat ion w it h consist ent regard t o prudent ial and healt hy banking principles. The
business plan shall at least cover t he f ollow ing:
● Execut ive summary ● Current perf ormance
● Risk management implement at ion ● M anagement policies and st rat egies ● Financial project ion
● Fund collection plan ● Funds disbursement plan ● Capit al plan
● Project ed rat ios and cert ain it ems
● Organization and human resources development
plan
● Ot her inf ormat ion
b. The board of directors must implement the business
plan eff ect ively and communicat e t o shareholders
of t he bank and all organizat ional levels w it hin t he
bank.
c. The board of com m issioners m ust oversee t he
implement at ion of business plan.
d. Bank must submit a business plan to Bank Indonesia
no lat er t han 1 (one) mont h af t er t he beginning of
calendar year. Bank must submit a quart erly report
on business plan realizat ion and six-mont ly report
on oversght of business plan.
Rural bank
a. Rural Bank must f ormulat e a realist ic business plan
and annual budget , st at ing at least t he f ollow ing:
● Plan f or f unding
● Plan f or f und channelling, consist of w orking
cap i t al cred i t , i n vest m en t cred i t , an d
consumption credit
● Balance sheet and income statement projections
in 2 (t w o) semest ers
● Human resources development plan; and ● Act ion f or improving bank perf ormance, consist
of resolut ion of non perf orming loan, plan f or
recover of f inancial loss, and ot hers.
b. Business plan should be arranged by t he board of
direct or or t he execut ive off icer in equal level and
should be approved by t he board of commissioners
c. The board of direct ors is required t o implement t he
business plan and t he board of commissioners is
required t o supervise it s implement at ion.
d. The business plan m ust be subm it t ed t o Bank
Indonesia in t he end of January. The board of
com m isioners m ust subm it six-m ont ly report of
5. Information System Technology (IT)
Bank Indonesia has adopt ed t he f ollow ing provisions
concerning IT:
a. Banks may operat e t heir ow n IT syst ems or use
out sourcing;
b. If a bank operat es it ow n IT syst em , t he bank m an ag em en t sh al l b e r eq u i red t o ap p l y
management cont rol and carry out t he IT int ernal
au d it f u n ct io n in co m p lian ce w it h p revailin g regulat ions;
c. If t h e IT syst em is o u t so u rced , in ad d it io n t o
complying w it h t he provisions set f ort h in it em (ii)
above, t he bank shall also evaluat e t he reliabilit y of t h e IT service p ro vid er an d p rep are a w rit t en
agreement stating that Bank Indonesia may conduct
examinat ion and deliver a copy of t hat agreement
t o Bank Indonesia;
d. Banks are required t o inf orm Bank Indonesia of any f undament al changes in t he use of IT.
6. Application of Risk M anagement for Commercial Banks
In line w it h t he rapid grow ing in t he ext ernal and
int ernal environment of t he banking syst em and t he
increasing complexity of business operation, banks are required t o apply risk management in an eff ect ive
manner.
Applicat ion of Risk M anagement shall encompass at
least t he f ollow ing :
● Act ive supervision by t he Board of Commissioners
and Board of Direct ors;
● Adequacy of policy, procedure, and est ablishment
of limit s;
● A d eq u acy o f p ro cesses o f i d en t i f i cat i o n ,
measurement , monit oring and cont rol of risk and
t he risk management inf ormat ion syst em; and
● Comprehensive int ernal cont rol syst em.
For t he purpose of implement ing eff ect ive processes
and syst em of risk management , banks are required
a. A Risk M anagement Commit t ee t hat consist of at least t he majorit y of t he Board of Direct ors and
relevant execut ive off icers.
b. A Risk M anagement Unit that must be independent
and shall be responsible direct ly t o t he M anaging
Direct or or t o a specially assigned Direct or. Banks are also required t o disclose t o t heir cust omers
t he risk inherent in new product s and act ivit ies.
7. Applicat ion of Risk M anagement in Int ernet Banking
Banks providing internet banking services are required
t o ensure eff ect ive applicat ion of risk management in their internet banking activities, covering the follow ing:
a. Active oversight by the Board of Commissioners and
Board of Direct ors
b. Securit y cont rol syst em
c. Risk management w ith particular focus on legal risk and reput at ion risk.
Applicat ion of risk management shall be set out in a
w rit t en policy, procedures, and guidelines f ormulat ed w ith reference to the Guidelines for Application of Risk
M anagement in Banking Services over t he Int ernet
issued by BI.
To im p ro ve ef f ect iven ess in ap p licat io n o f r isk management , banks are required t o conduct a regular
evaluat ion and audit of int ernet banking act ivit ies.
8. Im p le m e n t a t io n o f Risk M a n a g e m e n t f o r Bancassurance
a. While doing bancassurance act ivit ies, Bank is not
permit t ed t o undert ake, eit her alone or joint ly, t he
risk arising f rom insurance act ivit ies.
b. Bank im plem ent ing bancassurance act ivit ies is
obligat ed t o im plem ent risk m anagem ent shall
cover but not limit ed t o t he f ollow ing:
● Appoint ment of insurance company t o become
bank’s part ner;
● Im p l em en t at i o n o f r u l es r eg ard i n g b an k
conf ident ialit y; and
c. Ban k s is o b lig at ed t o m ak e a select io n o ver
insurance companies w hich w ill become t he bank’s
part ner in bancassurance act ivit ies w it h at t ent ion
paid t o t he f ollow ing mat t ers:
● Insurance company eligible t o become a part ner
is one t hat complies w it h t he minimum level of
solvabilit y according t o prevailing rules.
● Th e in su r an ce co m p an y h as o b t ain ed t h e
relevant license f rom t he M inist er of Finance t o
ru n b an cassu ran ce act ivit ies acco rd in g t h e
prevailing rules
● Ban k s o b lig at ed t o m o n it o r, an alyze, an d
evaluat e perf orm ance and or reput at ion of
part ner insurance company periodically at least
once a year.
d. Bank is obligat ed t o end t he part nership bef ore t he end of agreement period or may not ext end t he
period of part nership if :
● Perf ormance of part ner insurance company no
meet condit ions
● There has been a decrease in reput at ion of
part ner insurance com pany w it h signif icant
inf luence on banks’s risk prof ile.
e. In t he event t hat t he market ed insurance is linked
t o in vest m en t (in vest m en t lin k /u n it lin k ), Th e
insurance company has complied w it h condit ions
st ipulat ed bay The M inist er of Finance, w hich, among others, are as follow s:
● Availabilit y of an expert w hose qualif icat ions
equal t o a deput y invest ment manager w it h at
least 3 year experience
● Separat ion of asset s and obligat ion f rom ot her
lif e insurance
● Im plem ent at ion of ot her m at t ers required in
managing t he invest ment f unds ent rust ed by cu st o m er s o p t i m al l y, p r o f essi o n al l y, an d
9. Applicat ion of Risk M anagement f or Banks Conducting Activities Related to M utual Funds
In response t o t he st eadily expanding involvement of
Banks in act ivit ies relat ed t o mut ual f unds, t here is
grow ing aw areness t hat t hese act ivit ies not only yield
benefits but also incur various potential risks for Banks. In this regard, Banks need to strengthen the effective
ap p l i cat i o n o f r i sk m an ag em en t t h ro u g h t h e
implementation of prudential principles and protection of cust om er int erest . The scope of Bank act ivit ies
relat ed t o mut ual f unds covers act ivit ies of Banks as
invest ors, Banks as m ut ual f und sales agent s, and
Banks as Cust odian Banks. The most import ant t ask t hat a Bank is required t o perf orm in support of
eff ect ive applicat ion of risk management is t o:
● Ensure t hat any invest m ent m anager act ing as
part ner in act ivit ies relat ed t o m ut ual f unds is
reg ist ered an d licen sed b y t h e cap it al m arket au t h o r it y in acco rd an ce w it h t h e ap p licab le
regulatory provisions;
● Ensure that the mutual fund concerned has received
a statement of effective registration form the capital
market aut horit y in accordance w it h t he applicable
regulatory provisions;
● Ident if y, measure, monit or, and cont rol risks arising
from act ivit ies relat ed t o mut ual f unds.
In t he implement at ion of prudent ial principles, Banks
are prohibit ed f rom any act ion, w het her direct ly, t hat
may cause a mut ual f und t o acquire charact erist ics resem bling t hose of Bank product s, f or exam ple,
savings deposit s or t ime deposit s.
10. Risk M anagement Certification for M anagement and Officers of Commercial Banks
In t he applicat ion of Risk M anagement on an eff ect ive
basis, t he Bank is required t o f ill t he posit ions on t he
Bo ard o f Co m m issio n ers an d f o r t h e Ban k Risk M an ag er w i t h h u m an r eso u rces p o ssessi n g
compet ence and expert ise in risk management . The
Banks to hold Risk M anagement Certificates represent one aspect in assessment of t he compet ence f act or in
f it and proper t est . Banks are required t o plan and
implement a human resources development program
in order t o build compet ence and expert ise in risk
m an ag em en t . Five levels are st ip u lat ed f o r risk management cert if icat es, based on t he hierarchy and
organizat ional st ruct ure of t he Banks as f ollow s: level
1 – level 5. Risk management cert if icat ion may only be organized and held by Prof essional Cert if icat ion
Agency licensed by Nat ional Agency f or Prof essional
Cert if icat ion (BNSP). A risk management cert if icat e
issued by an int ernat ional agency or ot her agency out side Indonesia may be considered f or recognit ion
equivalent t o risk management cert if icat e issued by a
prof essional cert if icat ion agency, if t he agency issuing
t h e cert if icat e is in t er n at io n ally reco g n ized an d
accept ed; cert if icat es have been issued during t he last 4 years.
F. Other Regulations
1. Short Term Funding Facility (FPJP) for Commercial Banks
A bank experiencing a short t erm f unding diff icult y
ren d erin g it u n ab le t o set t le liab ilit ies, w h et h er generat ed t hrough t he clearing syst em and/or due t o
use of Int raday Liquidit y f acilit y at pre-cut t ime of
BI-RTGS, may obtain an FPJP from Bank Indonesia. A Bank
may use FPJP insof ar as it holds high qualit y, liquid collat eral w it h minimum value at t he amount of FPJP
received. FPJP shall be guaranteed against high quality
collateral ow ned by the bank consist of Bank Indonesia
Cert if icat e (SBIs) and/or Government Securit ies (SUNs) w it h condit ions:
● Selling value of t he SBIs and/or SUNs at least equal
as value of t he FPJP;
● SBIs w ith remaining maturity of not less than 3 w ork
days
● SUNs w it h remaining mat urit y of not less t han 10
The t erm of each FPJP is 1 (one) day and m ay be ext ended on a consecut ive basis subject t o an overall
maximum FPJP t erm of 90 (ninet y) days.
2. Short Term Funding Facilit y f or Sharia Banks (FPJPS)
A Sharia Bank may submit an FPJPS application to Bank
Indonesia through the BI-SSSS commencing from the
cut off w arning t hrough 15 minut es af t er BI-SSSS pre-cut off .FPJPS shall be backed by high qualit y, liquid
collat eral held by t he bank concerned, not cont rary t o
sharia principales, and regist ered at Bank Indonesia.
Collat eral shall consist of :
● SWBs w it h remaining mat urit y of not less t han 3
w orking days at t he dat e of mat urit y of t he FPJPS;
and/or
● Secu r it ies an d /o r o t h er claim s issu ed b y t h e
government based on sharia principles.
3. Intraday Liquidity Facility For Commercial Banks (FLI)
The FLI is t he f unding f acilit y ext ended by Bank
Indonesia t o Banks in t heir capacit y as members of
t h e BI-RTGS syst em an d m em b ers o f t h e SKNBI,
repayable on t he same day as t he day of use. A Bank may obt ain an int raday f acilit y, w het her in t he f orm of
LFI-RTGS or FLI-Clearing, af t er signing an agreement
f or use and collat eral securit y of FLI and submit t ing
the required supporting documents to Bank Indonesia. A Bank may use an FLI subject to meeting the follow ing
requirement s:
● Ho ld in g secu rit ies in t h e f o rm o f SBIs an d /o r
Government Securit ies usable as collat eral
● Not under suspension as a member bank in t he
BI-RTGS syst em and BI-Scrip less Securit ies Set t lement
Syst em (BI-SSSS), and
● Not under sanct ion f rom obt aining t he Short Term
4. The Intraday Liquidity Facility for Commercial Banks Based on Sharia Principles (FLIS)
The FLI is t he f unding f acilit y ext ended by Bank
Indonesia t o Banks in t heir capacit y as members of
t h e BI-RTGS syst em an d m em b ers o f t h e SKNBI,
repayable on t he same day as t he day of use. A Bank may obt ain an int raday f acilit y, w het her in t he f orm of
LFI-RTGS or FLI-Kliring, af t er signing an agreement f or
use and collat eral securit y of FLI and submit t ing t he required supporting documents to Bank Indonesia. FLIS
received by a Banks shall apply t he m udharabah
principle.
A Bank may use FLIS subject t o meet ing t he f ollow ing requirement s:
● Holds SWBIs, securit ies, and/or claims issued by t he
government based on sharia principles t hat may
be used as collat eral;
● Is not under suspension as member Bank of t he
BI-RTGS an d /o r m em b er o f t h e BI-SSSS, an d /o r
t erminat ed as member of t he SKNBI, and
● Is not under imposit ion of sanct ions prevent ing it
from obt aining t he FPJPS.
5. Bank Indonesia Rupiah Deposit Facility (FASBI)
FASBI is a facility provided by Bank Indonesia for banks t o place t heir f unds in Bank Indonesia. The t enor of
FASBI shall be a maximum of 7 days beginning on t he
settlement date until the maturity date. FASBi may not
be t raded, pledged as collat eral, or redeemed prior t o mat urit y.
6. Bank Foreign Borrow ing
A Bank may t ake on bot h short t erm and long t erm f oreign borrow ings. Banks are required t o limit t he
daily balance of short t erm f oreign borrow ings t o no
more t han 30% of bank capit al. A Bank int ending t o
proceed w it h market ent ry t o raise long t erm f oreign borrow ings is required t o obt ain prior approval f rom
7. Taxation of Interest
Income in the form of interest on time deposits, savings
deposits, and discounts on Bank Indonesia Certificates
(SBIs) w het her held by individuals or legal ent it ies, is
levied a f inal income t ax of 20% of t he gross amount .
This t ax w ill not be w it hheld insof ar as t he amount of t he t ime deposit and savings deposit and SBI does not
exceed Rp 7,500,000.
8. Foreign Exchange Flow s
Follow ing the promulgation of Act Number 24 of 1999
concerning Foreign Exchange Flow s and Exchange Rate
Syst em, any person may f reely hold and use f oreign exchange. Not w it hst anding Bank Indonesia reserves
t he right t o request inf ormat ion and dat a on f oreign
exchange act ivit ies. The requirem ent f or report ing
act ivit ies in f oreign exchange f low s applies t o:
● Banks
● Non-Bank Financial Inst it ut ions
● Non-Bank Financial Inst it ut ions w it h t ot al asset s or
annual sales turnover of not less than Rp 100 billion and act ively operat ing in Foreign Exchange Flow s.
9. In t e rb a n k M o n e y M a rk e t Ba se d o n Sh a ria Principles (PUAS)
To improve eff iciency in t he management of f unds, a
money market is operat ed f or f unds based on Sharia
Principles. The Sharia Int erbank M oney M arket (PUAS)
comprises short-term investments in Rupiahs betw een market players, based on t he mudharabah principle.
In t his act ivit y, Sharia Commercial Banks may engage
in f und placement s and/or f und management , w hile
convent ional Commercial Banks may engage only in f und placement s.
10. Supervisory Act ions and Designat ion of Bank Status
a. Bank Indonesia may place a bank under Int ensive
Supervision if one or more of t he f ollow ing crit eria
● rat ing is poor or unsound;
● t he bank has act ual and/or pot ent ial problems
based on assessment of composit e risk;
● in excess of and/or violation of the Legal Lending
Limit (LLL);
● violat ion of t he Net Open Posit ion (NOP); ● t he rat io of rupiah st at ut ory reserves is equal t o
or great er t han t he st ipulat ed rat io f or bank st at ut ory reserves, but despit e t his t he bank is experiencing f undament al liquidit y problems;
● t h e b an k h as f u n d am en t al p ro b lem s w it h
prof it abilit y;
● t he bank has net problem loans > 5% of t ot al
credit .
b. Bank Indonesia may place a bank under Special Surveillance if one or more of t he f ollow ing crit eria are met :
● t he Capit al Adequacy Rat io (CAR) of t he bank is
<8% ;
● t he rat io of rupiah st at ut ory reserves is below
t he prescribed rat io f or bank st at ut ory reserves
and t he bank is assessed as having f undament al liquidit y problems.
If a Bank placed under special surveillance is report ed as having syst emic impact , Bank Indonesia w ill not if y t h e Dep o sit In su ran ce A g en cy an d req u est t h e Coordinat ing Commit t ee t o convene a meet ing t o
discuss w het her t he Bank does or does not have syst emic impact .
If a Bank under special surveillance does not have syst emic impact and meet s t he f ollow ing crit eria:
● The t ime given t o perf orm t he act ions required by
BI has not expired, but t he condit ion of t he Bank has det eriorat ed w it h t he Capit al Adequacy Rat io has f allen t o below 2% w it h lit t le prospect f or
● The t ime given t o perf orm t he act ions required by
BI has expired, t he Capit al Adequacy Rat io is below
8% , and the condition of the Bank is not improving,
Bank Indonesia w ill inf orm t he Deposit Insurance
Agency and request a decision f rom t hat agency on
w het her t o rescue or not rescue t he Bank. If t he Deposit Insurance Agency decides not to proceed w ith
rescue of t he Bank, Bank Indonesia w ill revoke t he
o p er at i n g l i cen se o f t h e Ban k af t er recei vi n g not if icat ion f rom t he Deposit Insurance Agency.
11. Follow Up Action to Rural Bank under Special Surveillance
In t he event t hat Bank Indonesia deems a rural bank
t o b e in su ch co n d it io n as t o h ave d if f icu lt ies
endangering it s cont inued operat ion, t he rural bank
sh all b e p laced u n d er sp ecial su rveillan ce. Ban k
In d o n esia m ay p lace a ru ral b an k u n d er Sp ecial Surveillance if one or more of t he f ollow ing crit eria
are met :
● The Capit al Adequacy Rat io (CAR) is less t han 4% ; ● Cash Rat io (CR) f or t he past 6 mont hs is less t han
3%
The period specified for special surveillance is 6 month
from t he dat e of not if icat ion let t er f orm BI and can not be extended. During the period specified for special
surveillance, a rural bank can be exited from the special
surveillance if meet t he f ollow ing crit eria:
● The Capit al Adequacy Rat io (CAR) at least 4% , and ● Average Cash Rat io f or t he past six mont hs at least
3% , and
● Has co m p let ed all p ro cess o f law in reco very
according t o t he regulat ions.
Bank Indonesia may make announcement concerning
ru ral b an k u n d er sp ecial su rveillan ce t o Dep o sit
Insurance Agency (LPS) t hese f ollow ing met t ers:
● The rural bank that is put under special surveillance; ● The rural bank at t he period of special surveillance
and t he period has been exceeded but t he f inancial
● Th e ru ral b an k t h at w as exit ed f ro m sp ecial
surveillance in case f inancial condit ion is improved
so The Capit al Adequacy Rat io (CAR) at least 4%
and average Cash Rat io f or t he past six mont hs at
least 3%
Af t er get t he announcement f rom BI in let t er b and c, LPS w ill evaluat e t o t ake decision rescue or not . If LPS
decide not t o rescue, BI shall est ablish a revocat ion of
operat ing license w it h t he announcement f rom LPS and publish it t o t he sociat e.
12. Certifying Institution for Rural Bank
The objectives for establishing the certifying institutions are:
● To ensure t he qualit y of t he cert if ying syst em ● To ensure t he im plem ent at ion of t he cert if ying
syst em; and
● To im p ro ve t h e q u alit y o f p er f o r m an ce an d
prof essionalism of BPR’s human resources.
The requirements that must be fulfilled by the certifying
inst it ut ions are:
● Having a vision and mission to improve and develop
human resources in BPRs t o support t he creat ion
of sound, healt hy and eff icient indust rial condit ion
f or BPRs;
● Const it ut ing t he minimum bodies t hat consist of :
Cert if ying Board, Nat ional Curriculum Commit t ee,
and management .
● Having and conduct ing it s dut ies based on it s
co m p et en ce an d co m m i t m en t t o m an ag e,
det ermine, and organize t he cert if ying syst em.
13. Debtor Information System (SID)
The operat ion of t he Debt or Inf ormat ion Syst em is
int ended t o assist report ing ent it ies in expedit ing t he
process of provision of f unds, f acilit at e t he applicat ion
of risk management , and assist banks in ident if icat ion of debt or qualit y f or purposes of legal compliance.
non-bank credit providers, and rural non-bank w ith are required t o b eco m e rep o rt in g en t it ies w it h in t h e d eb t o r
inf ormat ion syst em. The scope of debt or inf ormat ion
provided t o a report ing ent it y shall include but not be
lim it ed t o t he ident it y of t he debt or, ow ner and
management , f acilit ies f or provision of f unds received by debt or, collat eral, guarant or, and/or collect ibles.
14. Restrictions on Rupiah Transactions and Foreign Currency Loans By Banks
Banks are prohibited and/or restricted and/or exempted
in regard t o conduct ing cert ain t ransact ions w it h
f oreign part ies. The prohibit ed t ransact ions are as f ollow s:
● Provision of credit and overdrafts in Rupiahs/foreign
currencies
● Placement s in rupiah
● Purchase of rupiah-denominat ed securit ies issued
by f oreign part ies
● Int eroff ice account s in rupiahs
● In t er o f f ice acco u n t s in f o reig n cu rren cy f o r
provision of credit out side Indonesia
● Equit y part icipat ion in rupiahs
● Rupiah transfer to an account held by foreign parties
and/or joint account held by a f oreign part y and non-f oreign part y at a domest ic banks
● Rupiah t ransf er t o an account held by a f oreign
party and/or joint account held by foreign party and
non-f oreign part y at an overseas bank.
Banks are prohibited from conducting rupiah transfers
t o non f oreign part ies out side Indonesia.
The rest rict ed t ransact ions are as f ollow s:
● Foreign exchange selling derivat ive t ransact ions
against rupiahs;
● Foreign exchange buying derivat ive t ransact ions
against rupiah.
● The prohibition on provision of credit shall not apply
to: syndicated credit that meets some requirements;
credit card; consumpt ion credit used in Indonesia;
int raday rupiah and f oreign currency overdraf t ;
overdrafts in rupiah and foreign currency due to
imposit ion of administ rat ion charges; negot iat ion b y f o reig n p art ies o f claim s f ro m t h e ag en cy
appoint ed by t he government f or management of
banks asset s w it hin t he f ramew ork of Indonesian b an k r est r u ct u r i n g , f o r w h i ch p aym en t i s
guarant eed by a prime bank.
● The prohibit ion on purchase of securit ies in rupiah
shall not apply t o: purchase of securit ies relat ed t o merchandise export f rom Indonesia, merchandise
im p o r t s in t o In d o n esia, an d d o m est ic t r ad e;
purchase rupiah-denominat ed bank draf t s issued
by overseas banks f or t he account of Indonesian
overseas w orkers in w hich t he rupiah f unds are received by non f oreign part ies w it hin Indonesia.
● The prohibit ion on rupiah t ransf ers shall not apply
if conduct ed: as part of an economic act ivit y in Indonesia; or bet w een account s held by t he same
f oreign part y.
● The rest rict ions on f oreign exchange derivat ive
t ransact ion against rupiahs shall not apply in t he case o f d erivat ive t ran sact io n s co n d u ct ed f o r
h ed g in g p u r p o ses as p ar t o f : in vest m en t in
Indonesia w it h a t im e f ram e of no less t han 3
mont hs; merchandise export s f rom Indonesia and merchandise import int o Indonesia by means of
let t er of credit (L/C); and/or domest ic t rade means
of domest ic let t er of credit (SKBDN)
15. National Clearing System
Clearing is t he exchange of paper inst rum ent s or
elect ronic f inancial dat a among clearing members,
w het her in f avor of members or in f avor of cust omers of members, w it h set t lement calculat ions complet ed
Clearing System (SKNBI) is the Bank Indonesia Clearing syst em t hat covers debit clearing and credit clearing
w it h set t lem ent conduct ed on a nat ionw ide basis.
Set t lement during debit clearing and credit clearing is
conduct ed by t he Nat ional Clearing Operat or on t he
basis of t he result s of net mult ilat eral calculat ion and t he novat ion principle and is f inal and irrevocable.
Set t lement also t akes place on t he basis of same-day
settlement. Debit notes issued by a Bank for processing in debit clearing in t he SKNBI are rest rict ed in amount
t o no more t han Rp 10 million per debit not e. Credit
t ransf ers processed in credit clearing are rest rict ed t o
no more t han Rp 100 million per t ransact ion.
16. Real Time Gross Settlement (RTGS)
To su p p o r t t h e ach i evem en t o f an ef f i ci en t ,
expedit ious, secure, and reliable payment syst em f or
upholding f inancial syst em st abilit y, Bank Indonesia h as im p lem en t ed t h e Ban k In d o n esia Real Tim e
Set t lement syst em (BI-RTGS). BI-RTGS is a syst em f or
electronic funds transfer among M embers in the rupiah currency w it h set t lement processed on an individual
per t ransact ion basis.
17. Intercity Clearing
Any bank t hat is regist ered and approved by BI may
conduct t he clearing of checks and bilyet giro issued
by bank off ices t hat are not members in t he Clearing
Area in w hich t he checks and bilyet giro are cleared. Th e b en ef it s o f In t ercit y Clearin g are im p ro ved
eff iciency in t ime and cost s due t o:
● Funds becom e available f rom checks/bilyet giro
according t o t he local clearing schedule w here t he not es are cleared (same day set t lement )
● Processing f ees charged by BI are t he same as f or
ot her local clearing inst rument s
18. Bank Indonesia Certificates (SBIs)
SBIs are Rupiah-denominat ed securit ies issued by BI
of t he inst rument s used in Open M arket Operat ions.
The t erm of SBIs is at least 1 mont h and no more t han 12 months. SBIs are issued in scrip less form and traded using t he discount syst em. SBIs may be held by banks
an d o t h er p ar t ies as st ip u lat ed b y BI, an d are negot iable. SBIs may be purchased on t he primary market and t raded on t he secondary market under
repurchase agreement s (repo) or in out right purchase/ sale.
19. Bank Indonesia Wadi’ah Certificates (SW BIs)
To support t he management of f unds by Sharia Banks an d Sh ar ia Divisio n s an d BI’s m o n et ar y co n t ro l operat ions, BI provides a short -t erm f und placement
f acilit y under t he w adi’ah principle. The documentary proof of w adi’ah fund placement at BI is referred to as SW BI. Term s of placem ent are 7, 14, and 28 calen d ar d ays, an d t h e m in im u m am o u n t o f a
placement is Rp 500 million. Fund placement of f unds in excess of Rp 500 m illion m ay be m ade only in m ult iples of Rp 50 m illion. SW BIs are issued and
administered in scrip less form and are non-negotiable.
20. Bank Secrecy
Ban k secr ecy co ver s ever yt h i n g p er t ai n i n g t o inf ormat ion on deposit ors and t heir deposit f unds. Inf ormat ion on cust omers ot her t han deposit ors does not come under t he scope of inf ormat ion t hat must
be kept conf ident ial by banks. This provision also applies t o aff iliat ed part ies.
The bank secrecy provisions do not apply t o:
a. M at t ers pert aining t o t axat ion
b. Set t lement of bank claims placed in t he hands of the State Receivables and Auction Agency (BUPLN)/
St at e Receivables Commit t ee (PUPN) c. Judicial process in criminal proceedings
d. Judicial process in civil proceedings bet w een banks
and customers
e. Exchange of int erbank inf ormat ion
g. Request by legal heir of deceased deposit or h. For purposes of examinat ion pert aining t o money
laundering.
Implement at ion of t he provisions in let t ers a, b, and c,
shall require prior w ritten order or approval for w aiving
of bank secrecy f rom t he management of BI, w hile implement at ion of t he provisions in let t ers d, e, f , g,
and h shall not require such order or approval.
21. Government Securities (SUN)
SUN consist s of Treasury Bills and Sovereign Bonds.
Treasury Bills are issued w it h a m at urit y up t o 12
(t w elve) m ont hs, w it h int erest paym ent using t he discount s syst em. Sovereign Bonds are issued w it h a
m at urit y of m ore t han 12 (t w elve) m ont hs, w it h
variable rate, fixed rate, and/or interest payment using
t he discount s syst em. Any person, company, business
part nership, associat ion, or organized group m ay purchase SUN by take place the placement of bids w ith
Bank Indonesia t hrough bidders consist ing of Banks,
M oney M arket Brokerage Companies, and Securit ies Companies f ulf illed t he crit eria by M inist er of Finance.
22. Human Resources Development at Banks
Banks are required t o provide educat ion and t raining f unds t o develop prof essional hum an resources at
bank. For Commercial Banks, educat ion and t raining
f unds are st ipulat ed at no less t han 5% of human
resources budget . For Rural Banks, t he f unds are st ipulat ed at no less t han 5% of act ual expense
incurred for human resources throughout the previous
year. In case of t he educat ion and t raining f unds have
not f ully used by t he end of t he current year, t he f und shall be added int o t he f unds f or t he f ollow ing year.
Educat ion and t raining may be implement ed by t he
f ollow ing means:
● organized by t he bank it self ;
● part icipat e in educat ion and t raining provided by
● w ork t oget her t o organize educat ion w it h anot her
bank; or
● assign human resources t o part icipat e in educat ion
and t raining provided by a banking educat ional
inst it ut ion.
The educat ion and t raining plan shall be approved by
t he Board of Commissioners or supervisory board and
shall be report ed t o Bank Indonesia in t he annual
business plan.
23. Depositor Funds Guarantee
As st ipulat ed in Act No. 24 of 2004 dat ed Sept ember
22 concerning t he Deposit Insurance Agency, t o t ake
eff ect 12 m ont hs af t er t he dat e of prom ulgat ion, deposit ors at banks and rural banks holding demand
deposits, time deposits, certificates of deposits, savings
deposits, and/or other equivalent form of deposit funds
shall benef it f rom government prot ect ion ext ended
t h ro u g h t h e Dep o si t In su r an ce A g en cy (LPS). Lim it at io n s o n d ep o sit valu e p ro t ect ed b y t h is
guarant ee w ill be phased in as f ollow s:
a. For 6 mont hs af t er Act No. 24 of 2004 becomes
eff ect ive, deposit s shall be guarant eed t o t heir f ull
value;
b. For t he next 6 mont hs af t er t he period ref erred to
in let t er a, d ep o sit s sh all b e g u aran t eed t o a
maximum of Rp 5 billions;
c. For t he next 6 mont hs af t er t he period ref erred t o
in let t er b , d ep o sit s sh all b e g u aran t eed t o a
maximum of Rp 1 billion;
d. Af t er expirat ion of t he period ref erred t o in let t er
c, t he maximum guarant eed value of deposit s f or
each cust omer at any one bank shall be Rp 100
millions.
Af t er t he operat ing license of a bank is revoked,
deposit ors have a maximum of 5 years t o f ile Deposit
24. Special Treatment for Commercial Bank Credit follow ing the National Disaster in Aceh Province and Nias Regency, North Sumatra Province
In response t he nat ional disast er in Aceh Province and
Nias Regency, Nort h Sumat ra Province, BI is providing
special t reat ment t o credit ext ended by commercial banks. Classif icat ion of qualit y of credit or ot her
provision of f unds ext ended by a bank t o any debt or
w it h an overall ceiling of no more t han Rp 5 billions shall be based solely on prompt repayment of principal
and int erest . In t he case of rest ruct ured debt , qualit y
sh al l b e cl assi f i ed cu r r en t co m m en ci n g f ro m
rest ruct uring t hrough end of January 2008, subject t o t he f ollow ing requirement s:
a. Disbursed t o a debt or w it h project locat ion or
business locat ion in Aceh Province and/or Nias
Regency, Nort h Sumat ra Province; and
b. Has or is deemed likely t o experience diff icult ies in repaym ent of loan principal and/or int erest by
reason of the impact of the disaster in Aceh Province
and/or Nias Regency, Nort h Sumat ra Province.
25. Special Treatment for Rural Banks Follow ing The Natural Disasters In Nanggroe Aceh Darussalan Province And Nias Regency, Nort h Sumat era Province
Credit qualit y f or rescued debt shall be classif ied
cu rren t co m m en cin g f ro m act io n s t ak en rescu e
through January 31, 2008. Debt rescue may take place by: rescheduling; recondit ioning; or rest ruct uring. The
provisions shall apply only t o credit t hat sat isf ies t he
f ollow ing requirement s:
● Credit already extended at the time of promulgation
of regulation concerning special treatment for Rural
Banks Follow ing The Nat ural Disast ers In Naggroe
Aceh Darussalan Province And Nias Regency, Nort h
Sumatera Province
● Credit disbursed t o debt or w it h project locat ions
Darussalam Province and/or Nias Regency, Nort h Sumat ra Province; and
● Has or is deemed likely t o experience diff icult ies in
repaym ent of loan principal and/or int erest or
Financing margin or profit share by reason of impact
o f t h e n at u ral d isast ers in t h e Nag g ro e A ceh Darussalam Province and Nias Regency, Nort h
Sumatera Province.
26. Resolution of Customer Complaints
Banks are required t o have a unit and/or f unct ion
established specially in each Bank Office to handle and
resolve complaint s brought by cust omers. To resolve com plaint s, Bank shall est ablish a policy and have
w rit t en procedures covering t he f ollow ing:
a. receipt of Complaint ;
b. handling and resolut ion of Complaint s; and
c. monit oring of Complaint handling and resolut ion A Bank shall resolve a Complaint no lat er t han 20
(t w ent y) w orking days af t er t he dat e of receipt of
w rit t en Complaint . This Bank Indonesia Regulat ion shall be eff ect ive in July 2005.
G. Reporting by Commercial Banks
1. Regular Report s a. Daily Period
● Report on PUAB transactions, PUAS transactions,
securit ies t ransact ions in secondary market , and
f oreign exchange t ransact ions.
● Report on Net Open Posit ion ● Cash Flow Projection ● Part of balance sheet report
● In t er est r at e an d m ar g i n o f m u d h ar ab ah
invest ment t ime deposit report
b. Weekly Period
● Report on Derivat ive Transact ions ● Third Party Funds Report
● Weekly Balance Sheet Report
● M ont hly Report
● M o n t h ly Pu b lish ed St at em en t o n t h e Ban k
Indonesia homepage
● Foreign Exchange Flow s Report ● Credit Report s
- Report of Provision of Funds - Debt Rest ruct uring Report
● Legal Lending Limit Report ● M at urit y Prof ile Report
● Compliance Direct or Progress Report ● M arket Risk Report
d. Quart erly Period
● Report on Act ual Bank Lending Compared t o
Business Plan
● Published Financial St at ement ● Bank Business Plan Progress Report ● Resolut ion of cust omer complaint report
e. Semi-Annually Period
● Report on Implement at ion and Principal Result
of Int ernal Audit
● Report on implement at ion business plan
f. Annually Period
● Business Plan Report ● Annual Financial St at ement ● Annual Report
● IT Technology Report ● Foreign Borrow ing Report
g. Three Year Period
● Report on Ext ernal Part y Reassessment of Bank
Int ernal Audit Perf ormance
2. Other Reports
● Rep o r t s p er t ai n i n g t o b an k l i cen si n g an d
est ablishment of off ices
H. Reporting by Rural Banks
1. Regular Report s
a. M ont hly Period
● M ont hly Report
● Legal Lending Limit Report
b. Semi-Annually Period
● Bank Business Plan Progress Report ● Published Financial St at ement
c. Annually Period
● Bank Business Plan ● Annual Financial St at ement
2. Other Reports
● Rep o r t s p er t ai n i n g t o b an k l i cen si n g an d
est ablishment of off ices
VI. BANKING INDICATORS
A. Number of Banks and Bank Off ices
B. Grow t h in Banking Operat ions
C. Funding
E. Ranking of Banks
VII. OTHER
A. Deposit Insurance Agency
The Deposit Insurance Agency (LPS) is a governm ent
inst it ut ion w it h t he f ollow ing f unct ions:
a. Prot ect ion of deposit or f unds; and
b. Act ive part icipat ion in maint aining banking syst em st abilit y as appropriat e t o it s pow ers.
In perf orming it s f unct ions, LPS has t he f ollow ing t asks:
a. Formulat ing and adopt ing policy f or implement at ion of t he deposit insurance scheme
b. Operat ion of t he deposit insurance scheme by
● Fo rm u lat in g an d ad o p t in g p o licies w it h in t h e
f ramew ork of act ive part icipat ion in maint aining banking syst em st abilit y;
● Formulat ing, adopt ing, and implement ing policies
f or resolut ion of bank f ailures in t he case of
non-syst emically import ant banks; and
● Act ion in t he case of f ailure of any syst emically
important bank.
The LPS can t ake act ion f or resolut ion and rescue of f ailed
banks w it h t he f ollow ing pow ers:
a. Takeover and exercise of all right s and pow ers of
shareholders, including rights and pow ers of a General
M eet ing of Shareholders;
b. Cont rol and management of t he asset s and liabilit ies of a rescued bank;
c. Review, cancellat ion, t erminat ion, and/or amendment
of any cont ract binding a rescued bank w it h any t hird
part y on t erms adverse t o t he bank; and
d. Sale and/or t ransf er of bank asset s w it hout consent
of debtors and/or sale and/or transfer of bank liabilities
B. M oney Laundering
1. M oney Laundering M oney laundering is t he act s of
p l acem en t , t r an sf er, p aym en t , exp en d i t u r e,
endow ment , donat ion, saf ekeeping, cross border
sm uggling, exchange, or ot her act in respect of
asset s know n or reasonably suspect ed t o be t he
proceeds of crime w it h t he int ent of concealing or
disguising t he origin of t hese asset s so t hat t hey
purport edly originat e f rom legit imat e act ivit ies.
2. Suspicious Financial Transact ions are:
a. t r an sact io n s in co n sist en t w it h t h e p ro f ile,
ch ar act er i st i cs, an d cu st o m ar y p at t er n o f
t ransact ions of t he cust omer;
b. cust omer t ransact ions t hat may be reasonably
suspect ed of being conduct ed t o circumvent t he
reporting requirements for such transactions that
apply t o Providers of Financial Services; or
c. t ransact ions concluded or abort ed t ransact ions
using asset s suspect ed t o originat e f rom t he
proceeds of crime.
3. Proceeds of crim e Proceeds of crim e are asset s
o b t ai n ed f ro m t h e f o l l o w i n g cr i m i n al act s:
corrupt ion, bribery, sm uggling of m erchandise/
human labor/immigrant s, banking crimes, capit al
m ar k et cr i m es, i n su r an ce cr i m es, n arco t i cs,
psychot ropic drugs, hum an t raff icking, w eapons
sm u g g l i n g , k i d n ap p i n g , t er ro r i sm , t h ef t ,
em bezzlem ent , f raud, count erf eit ing, gam bling,
p ro st it u t io n , t ax evasio n crim es, f o rest crim es,
environm ent al crim es, m arit im e crim es, or ot her
crimes punishable w it h imprisonment of 4 years or
more, committed w ithin the territory of the Republic
of Indonesia or out side t he t errit ory of t he Republic
of Indonesia and also proscribed as criminal act s
4. Report ing Requirement s f or Providers of Financial
Services
1. Providers of f inancial services are required t o
report t he f ollow ing t o t he Financial Transact ion Report ing and Analysis Cent er (PPATK):
a. Suspicious Financial Transact ions
b. Cash f in an cial t ran sact io n s in cu m u lat ive
am o u n t s o f Rp 5 0 0 m i l l i o n o r m o re o r equivalent value in foreign currency, w hether
in a single t ransact ion or mult iple t ransact ions
during 1 w orking day.
2. Suspicious Transaction Reports shall be submitted no lat er t han 3 w orking days af t er t he element
o f su sp icio u s t r an sact io n h as co m e t o t h e
at t ent ion of t he Provider of Financial Services.
3. Report s of suspicious t ransact ions conduct ed in cash shall be submit t ed no lat er t han 14 w orking
d ays af t er t h e d at e o f t h e t ran sact io n .Th e
report ing requirement s f or Providers of Financial
