Regulatory AlertsMinimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Economic Banks
The Financial Services Authority (OJK) issued Circular Letter No. 2/SEOJK.03/2025 to refine implementation rules for minimum capital and core capital requirements for People's Economic Banks (BPR) in alignment with recent legislation. This circular establishes detailed guidelines for capital components, risk-weighted asset calculations, and capital ratio methodologies, while repealing previous circulars from 2016 and 2019. The new requirements became effective on March 11, 2025, with the first applicable reporting position set for March 2025.
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Sector: Banking
Sub-Sector: BPR (People's Economic Banks)
Regulation Type: OJK Circular Letter
Regulation Number: 2/SEOJK.03/2025
Effective Date: 3/11/2025
Appendix 1 SEOJK 2-SEOJK03-2025 Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Economic Banks.pdf Abstract SEOJK 2-SEOJK03-2025 Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Economic Banks.pdf FAQ SEOJK 2-SEOJK.03-2025 Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Economic Banks.pdf
Page Content Circular Letter of the Financial Services Authority Number 2/SEOJK.03/2025 regarding Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Economic Banks
Abstract: As a follow-up to the issuance of POJK Number 5/POJK.03/2015 regarding Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Credit Banks, POJK Number 7 of 2024 regarding People's Economic Banks and Sharia People's Economic Banks, POJK Number 1 of 2024 regarding Asset Quality of People's Economic Banks, and OJK Circular Letter Number 21 of 2024 regarding Banking Accounting Guidelines for People's Economic Banks, it is necessary to refine the implementation provisions in order to align with existing legislation.
The legal basis for this OJK Circular Letter is: Law No. 7 of 1992 as amended several times, lastly by Law No. 4 of 2023; Law No. 21 of 2011 as amended by Law No. 4 of 2023; POJK Number 5/POJK.03/2015.
This OJK Circular Letter regulates further explanations, including those regarding capital components, risk-weighted asset calculations, procedures for calculating the minimum capital provision ratio and minimum core capital ratio, as well as procedures for requesting approval and submitting reports related to capital.
Notes: This OJK Circular Letter takes effect on the date it is established. This OJK Circular Letter was established on March 11, 2025.
Upon the entry into force of this OJK Circular Letter: a. OJK Circular Letter Number 8/SEOJK.03/2016 regarding Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Credit Banks; and b. OJK Circular Letter Number 24/SEOJK.03/2019 regarding Amendments to OJK Circular Letter Number 8/SEOJK.03/2016 regarding Minimum Capital Provision Requirements and Minimum Core Capital Fulfillment for People's Credit Banks, are repealed and declared invalid.
The calculation of minimum capital requirements refers to Appendix I, which forms an integral part of this OJK Circular Letter. The calculation of risk-weighted assets refers to Appendix II, which forms an integral part of this OJK Circular Letter. The calculation of the minimum capital provision ratio and minimum core capital ratio in accordance with this OJK Circular Letter first becomes effective for the March 2025 position.