Regulatory Alerts2012-12-27
Bank Indonesia Circular Letter No. 14/37/DPNP on Minimum Capital Requirement Based on Risk Profile and CEMA
Bank Indonesia issued Circular Letter No. 14/37/DPNP to amend minimum capital requirements for commercial banks by integrating risk profiles and Capital Equivalency Maintained Assets (CEMA). The regulation mandates that banks implement a comprehensive Internal Capital Adequacy Assessment Process (ICAAP) covering board supervision, risk assessment, monitoring, and internal control, which is subject to supervisory review. Additionally, it establishes specific CEMA fulfillment standards for foreign bank branches, including an 8% liability ratio and a Rp1 trillion floor effective from December 2017.
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