Regulatory Alerts2012-03-15
Bank Indonesia Circular Letter No. 14/10/DPNP on Risk Management for Housing and Auto Loans
Bank Indonesia issued Circular Letter No. 14/10/DPNP to mandate enhanced prudential risk management for commercial banks lending housing and auto loans. The regulation establishes a maximum Loan-to-Value ratio of 70% for housing loans and sets minimum down payment requirements of 20% to 30% for auto loans depending on vehicle type and usage. Banks violating these limits face administrative sanctions, including written reprimands, reduced soundness ratings, and suspension of lending activities.
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