JOINT DECREE
GOVERNOR OF BANK INDONESIA AND
CHAIRMAN OF THE BOARD OF COMMISSIONERS, DEPOSIT INSURANCE CORPORATION
No: 11/55/KEP.GBI/2009 No: KEP.026/DK/X/2009
COORDINATED DATA AND INFORMATION EXCHANGE TO SUPPORT THE EFFECTIVENESS OF BANK INDONESIA AND THE DEPOSIT INSURANCE
CORPORATION
Considering:
a. Establishing and maintaining financial system stability requires support from an effective financial system safety net;
b. Bank Indonesia and the Deposit Insurance Corporation play a significant role in the financial system safety net, therefore, comprehensive joint collaboration is required, with synergy, in order to enable each respective institution to effectively implement its core purposes;
c. In order to optimize collaboration between Bank Indonesia and the Deposit Insurance Corporation, existing collaboration requires additional refinement;
e. Based on the above considerations, a Joint Decree between the Governor of Bank Indonesia and the Chairman of the Board of Commissioners of the Deposit Insurance Corporation is required;
In view of:
1. Act No 7 1992 regarding Banks (State Gazette of the Republic of Indonesia 1992 No 31, Amendment to the State Gazette of the Republic of Indonesia No 3472), as amended by Act No 10 1998 (State Gazette of the Republic of Indonesia 1998 No 182, amendment to State Gazette of the Republic of Indonesia No 3790);
2. Act No 23 1999 concerning Bank Indonesia (State Gazette of the Republic of Indonesia 1999 No 66, amendment to the State Gazette of the Republic of Indonesia No 3843), as amended by Act No 6 2009 on Government Regulation In Lieu of a Law No 2, 2008 regarding the enactment of the second amendment to Act No 23 1999 about Bank Indonesia (State Gazette of the Republic of Indonesia 2009 No 7, amendment to the State Gazette of the Republic of Indonesia No 4962); 3. Act No 24 2004 regarding the Deposit Insurance Corporation (State
Gazette of the Republic of Indonesia 2004 No 96, amendment to the State Gazette of the Republic of Indonesia No 4420) as amended by Act No 7 2009 on Government Regulation In Lieu of Law No 3 2008; the enactment of Act No 24 2004 on Deposit Insurance Corporation (State Gazette of the Republic of Indonesia 2009 No 8; amendment to the State Gazette of the Republic of Indonesia No 4963);
HAS DECREED:
To enact: JOINT DECREE BETWEEN THE GOVERNOR OF BANK INDONESIA AND THE CHAIRMAN OF THE BOARD OF
COMMISSIONERS OF THE DEPOSIT INSURANCE
CORPORATION REGARDING COORDINATED DATA AND
INFORMATION EXCHANGE TO SUPPORT THE
EFFECTIVENESS OF BANK INDONESIA AND THE DEPOSIT INSURANCE CORPORATION
CHAPTER I
DEFINITION AND OBJECTIVES Article 1
The terminology used in this Joint Decree is defined as follows:
1. Bank is a Commercial Bank and Rural Bank as defined in Act No 7 1992 on Banking as amended by Act No 10 1998; and Sharia Bank and Sharia Business Unit are defined in Act No 21 2008 on Sharia Banking
2. Problem Bank is a Bank suffering from financial difficulties that endanger its business sustainability and is therefore placed under special surveillance by Bank Indonesia in accordance with the prevailing Bank Indonesia Regulation.
3. Bank Default is a Bank suffering from financial difficulties that endanger its business sustainability and the bank cannot be rescued by Bank Indonesia in accordance with its authority.
address and resolve Bank Default with systemic impact pursuant to the Deposit Insurance Corporation Act.
5. Systemic impact is a difficulty scale and dimension attributable to a Problem Bank that could trigger the subsequent failure of a number of other Banks. This could spur a crisis of confidence in the banking system and has the potential to threaten the financial system as a whole.
Article 2
Coordination and the exchange of information between BI and DIC is designed to support effective:
a. Deposit insurance;
b. Resolution of Problem Banks;
c. Settlement and/or handling of Bank Default;
d. Follow-up actions for Banks that have had their business license revoked;
e. Setting standard interest rates for the payment of insurance claims; and f. Handling other tasks, including data and information confidentiality
issues.
CHAPTER II DEPOSIT INSURANCE
Article 3
(1) BI submits information to DIC regarding Banks that have recently obtained a business license, Bank mergers and Bank that change from conventional to sharia banks.
operational activity report, merger report or report of business activity change from conventional to sharia.
Article 4
DIC coordinates with BI in socialization activities to inform Banks on new regulations appertaining to deposit insurance.
Article 5
(1) DIC must present information to BI regarding any Bank that does not meet its obligations as a participant of deposit insurance.
(2) The information submitted by DIC as referred to in paragraph (1) is subsequently available to BI in the supervision of the respective Bank.
Article 6
(1) DIC is permitted to request the primary financial ratios of any Bank as well as the respective stress test results as part of the Bank’s obligations as a participant of deposit insurance and regarding information to complement the early detection system for the banking industry.
(2) In addition to the financial ratios mentioned in Paragraph (1), DIC can also request data concerning total assets, credit, deposits, equity and profit of Rural Banks.
(3) BI is obliged to submit appropriate data and information to DIC as referred to in Paragraphs (1) and (2)
(4) Primary financial ratios mentioned in Paragraph (1) include capital, asset quality, profitability and liquidity.
Article 7
Based on a request by DIC, BI must submit a list of majority shareholders as recorded at BI.
Article 8
(1) In order to calculate the insurance premium, DIC can request customer deposit data from BI.
(2) BI provides customer deposit data, as mentioned in Paragraph (1), to DIC based on the Bank report submitted to BI.
(3) In order to verify the premium calculation, DIC can request assistance from BI to audit customer deposit data at a Bank.
(4) Prior to the application for a direct audit, as referred to in Paragraph (3), DIC must coordinate with BI.
(5) A direct audit, as referred to in Paragraph (3), is performed based on BI’s audit procedure.
(6) BI can involve DIC in the direct audit mentioned in Paragraph (5).
CHAPTER III
INFORMATION REGARDING PROBLEM BANKS Article 9
(1) BI will provide information regarding a Bank placed under special surveillance to DIC supplemented with:
a. A financial report in the form of a profit and loss statement and the balance of the administrative account;
b. Primary financial ratios including capital, asset quality, profitability and liquidity;
d. Details of the respective Bank’s earning assets, grouped based on quality;
e. List of Directors, Commissioners and shareholders;
f. Details of the problems faced by a Bank and the resolution measures requested by BI, including any regulatory violations and/or suspicion of banking crime;
g. Soundness level or composite rank;
h. Other information required by DIC including:
i. Aggregate customer deposit data grouped by nominal value;
ii. The number of staff; iii. Salary cost; and
iv. Total outstanding salary payments, if applicable.
(2) BI will submit the information referred to in Paragraph (1) no later than 5 (five) business days after the respective Bank is placed under special surveillance.
(3) BI will submit subsequent information regarding a bank placed under special surveillance as referred to in Paragraph (1) to DIC on a monthly basis for the entire period the bank is under special surveillance.
(4) The information referred to in Paragraph (1) will be submitted in writing or at a coordination meeting attended by BI and DIC.
Article 10
CHAPTER IV
COORDINATION TO RESOLVE BANK DEFAULT Article 11
(1) BI will inform DIC of a Bank Default with no systemic impact and subsequently hand over its resolution to DIC no later than 1 (one) business day after the announcement of the Bank Default by Bank Indonesia.
(2) The information referred to in Paragraph (1) is supplemented with the following data:
a. A financial report in the form of a profit and loss statement and the balance of the administrative account;
b. Primary financial ratio including capital, asset quality, profitability and liquidity;
c. The amount of capital required for the respective Bank to meet the Capital Adequacy Ratio and Liquidity Ratio;
d. Details of the respective Bank’s earning assets, grouped based on quality;
e. List of Directors, Commissioners and shareholders;
f. Details of the problems faced by a Bank and the resolution measures requested by BI, including any regulatory violations and/or suspicion of banking crime;
g. Soundness level or composite rank;
h. Aggregate customer deposit data grouped by nominal value; i. The total number of staff;
j. Salary cost;
k. Total outstanding salary payments, if applicable; and
Article 12
(1) DIC will inform BI of their decision to resolve or not to resolve a Bank Default with no systemic impact no later than 1 (one) business day after DIC receive notification of Bank Default from BI.
(2) BI will revoke the business license of Bank if DIC decide not to resolve the Bank Default as mentioned in Paragraph (1).
(3) BI will notify DIC of any Bank whose license has been revoked enabling DIC to take follow-up actions pursuant to prevailing regulations.
Article 13
(1) For a Bank Default with systemic impact whose resolution is passed on to DIC, BI will submit the information referred to in Article 11, Paragraph (2) no later than 1 (one) business day following the handover from the Coordination Committee.
(2) After receiving information regarding a Bank Default with systemic impact, DIC will immediately take resolution measures in accordance to the Deposit Insurance Corporation Act.
(3) DIC will coordinate with BI in the event of staff restructuring at the failed bank.
CHAPTER V
FOLLOW-UP COORDINATION FOR BANK LICENSE REVOCATION Article 14
Article 15
At the behest of BI, DIC will submit information on the performance of a Bank whose license has been revoked.
Article 16
(1) DIC can request assistance from BI to clarify banking regulations in order to reconcile and verify customer deposits at a Bank whose license has been revoked.
(2) BI and DIC will coordinate to resolve any issues regarding the rights and responsibilities of any participating Bank, whose license has been revoked, of BI-Real Time Gross Settlement (BI-RTGS) and clearing. (3) Based on a request by DIC, BI will provide a list of debtors with
non-performing loans in accordance with prevailing Bank Indonesia Regulations in the implementation of the reconciliation and verification process of customer deposits at a Bank whose license has been revoked.
Article 17
(1) BI and DIC will coordinate to compile the closing balance of the Bank. (2) BI and DIC will receive the closing balance from a Bank official.
Article 18
Article 19
BI and DIC will coordinate in the request and extension of overseas travel bans for directors, commissioners, shareholders, including majority shareholders, staff, and/or other parties related to a bank whose license has been revoked.
CHAPTER VI
SETTING THE INTEREST RATE FOR DEPOSIT CLAIMS Article 20
(1) In insuring a conventional bank, DIC will determine the standard interest rate pursuant to the Deposit Insurance Corporation Act.
(2) The standard interest rate as referred to in Paragraph (1) is determined considering the BI-rate.
(3) The standard interest rate as referred to by Paragraph (1) is set by DIC 3 (three) times per 1 (one) year, except under special circumstances.
CHAPTER VII MISCELLANEOUS
Article 21
When paying out deposit claims to a sharia bank, DIC will consider prevailing sharia banking regulations.
Article 22
(1) Bank Indonesia and DIC can utilize information technology to exchange data and information.
Article 23
All data and information submitted by BI to DIC or by DIC to BI is confidential.
Article 24
The implementation of this Joint Decree is further regulated in the BI and DIC Joint Implementation Guide.
CHAPTER VII CONCLUSION
Article 25
The introduction of this Joint Decree supersedes the previous Memorandum of Understanding between Bank Indonesia and the Deposit Insurance Corporation, dated 29th June 2007.
Article 26
This Joint Decree shall become effective as per the date of signature.
Promulgated in Jakarta 22nd October 2009
