OJK Regulation No. 19 of 2024 on Amendments to OJK Regulation No. 42/POJK.03/2015 on Liquidity Coverage Ratio Requirements for Commercial Banks

Abstract: The drafting of this OJK Regulation on Amendments to OJK Regulation No. 42/POJK.03/2015 on Liquidity Coverage Ratio (LCR) Requirements for Commercial Banks (POJK LCR) is motivated by the desire to harmonize with Basel Committee on Banking Supervision (BCBS) standards, particularly regarding liquidity risk monitoring tools and additional explanations of LCR components. In line with the OJK's 2022-2027 Destination Statement to strengthen prudential regulation aligned with international standards while considering national interests, adjustments to the existing LCR regulations are necessary.

The legal basis for this OJK Regulation is:

• Law No. 7 of 1992 as amended several times, most recently by Law No. 4 of 2023;
• Law No. 21 of 2011 as amended by Law No. 4 of 2023; and
• OJK Regulation No. 42/POJK.03/2015.

This regulation expands the scope of LCR monitoring, calculation, and reporting obligations to apply to all Conventional Commercial Banks (CCBs). Previously, CCBs classified as Group 1 Banks based on core capital (KBMI 1), excluding foreign banks, were not subject to LCR regulation. This expansion is implemented because maintaining the LCR ratio aims to strengthen banking liquidity, requiring data that is equivalent, reliable, and comparable across all CCBs.

Notes:

• This OJK Regulation takes effect upon enactment, which is November 8, 2024.
• This OJK Regulation applies to all CCBs, including branches of banks located outside the country.
• This OJK Regulation regulates, among other things, the scope of banks required to report LCR, High-Quality Liquid Asset (HQLA) criteria, obligations related to the Internal Liquidity Adequacy Assessment Process (ILAAP), and reporting procedures.
• The obligation for daily LCR calculation for Banks included in Group 1 based on core capital (excluding foreign banks) is first conducted for the position as of December 1, 2024. Meanwhile, the obligation to submit reports and publish information for the aforementioned Banks is first conducted for the end-of-month position in December 2024.

Explanation: 6 pages.