OJK Regulation No. 21 of 2025 on Leverage Ratio Compliance Requirements for Sharia Commercial Banks

The Financial Services Authority (OJK) issued Regulation No. 21 of 2025 to mandate Sharia Commercial Banks (BUS) to calculate and maintain a minimum leverage ratio of 3% to strengthen the resilience of the national Sharia banking sector. This regulation requires BUS to report the ratio quarterly starting from the end of the first quarter of 2026 and publish the value on their websites beginning with the September 2026 financial statements. Non-compliance triggers administrative sanctions, including written warnings, business suspension, or downgrade of health status, while the OJK retains the authority to set different ratios based on specific considerations.

Indonesia

Otoritas Jasa Keuangan (Financial Services Authority)

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Sector: Banking

Sub-Sector: Sharia Banking

Type of Regulation: OJK Regulation

Regulation Number: 21 of 2025

Effective Date: 9/17/2025

Attachment 1 POJK 21 of 2025 Compliance Requirements for Leverage Ratio for Sharia Commercial Banks.pdf

Abstract of POJK 21 of 2025 Compliance Requirements for Leverage Ratio for Sharia Commercial Banks.pdf FAQ of POJK 21 of 2025 Compliance Requirements for Leverage Ratio for Sharia Commercial Banks.pdf

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Financial Services Authority Regulation Number 21 of 2025 concerning Compliance Requirements for Leverage Ratio for Sharia Commercial Banks.

Abstract: This POJK is formulated as an effort to strengthen the resilience of the national Sharia banking sector, which is part of the implementation of the Indonesia Sharia Banking Development and Strengthening Roadmap 2023-2027. The Leverage Ratio aims to limit excessive leverage levels that could endanger financial system stability, serving as a complement to the risk-based minimum capital adequacy framework. The Leverage Ratio is set at a minimum of 3% in accordance with applicable international standards, namely Basel III and IFSB-23.

The legal basis for this POJK is: Law No. 21 of 2008 and Law No. 21 of 2011 as amended by Law No. 4 of 2023.

This POJK regulates that Sharia Commercial Banks (BUS) are required to calculate and fulfill the Leverage Ratio at all times with the following provisions:

The Leverage Ratio is calculated as the ratio between Core Tier 1 Capital and Total Exposure, which includes assets in the financial position report, derivative exposures, Sharia securities financing, and administrative account transactions.
The minimum ratio is set at 3%, calculated in Rupiah denomination, and becomes effective starting from the end of the first quarter of 2026. Reporting of the Leverage Ratio is conducted quarterly through the OJK reporting system.
In the event that a BUS fails to meet the ratio, the BUS is required to submit an Action Plan to the OJK containing improvement steps and the timeline for completion.
BUS is required to publish the Leverage Ratio value starting from the September 2026 financial position report via the BUS website.
The OJK may set different ratios based on specific considerations.
BUS that do not comply with the Leverage Ratio provisions will be subject to administrative sanctions, including written warnings, suspension of business activities, downgrade of health status, up to sanctions against principal parties.

This POJK is an important part of creating a healthy, developing, and globally competitive Sharia banking system that aligns with international standard developments, manifested through a strong capital structure of Sharia Commercial Banks.

Notes: This POJK becomes effective on the date of promulgation. This POJK was promulgated on September 17, 2025, and established on September 12, 2025.