Implementation of Corporate Governance for Commercial Banks

To:

The Board of Directors of Conventional Commercial Banks; and
The Board of Directors of Sharia Commercial Banks,
At location.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 14/SEOJK.03/2025

CONCERNING

IMPLEMENTATION OF CORPORATE GOVERNANCE FOR COMMERCIAL BANKS

In light of the effectiveness of the Financial Services Authority Regulation Number 17 of 2023 concerning the Implementation of Corporate Governance for Commercial Banks (State Gazette of the Republic of Indonesia Year 2023 Number 30/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 53/OJK) hereinafter referred to as POJK Corporate Governance for Commercial Banks, and the Financial Services Authority Regulation Number 2 of 2024 concerning the Implementation of Sharia Corporate Governance for Sharia Commercial Banks and Sharia Business Units (State Gazette of the Republic of Indonesia Year 2024 Number 4/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 72/OJK) hereinafter referred to as POJK Sharia Corporate Governance for Sharia Commercial Banks and Sharia Business Units, it is necessary to regulate the implementation of the Implementation of Corporate Governance for Commercial Banks in a Circular Letter of the Financial Services Authority as follows:

I. GENERAL PROVISIONS

Commercial Banks, hereinafter referred to as Banks, are banks that conduct business activities conventionally or conduct business activities based on Sharia Principles, which in their activities provide services in payment transactions, including branch offices of banks located outside the country.
Conventional Commercial Banks, hereinafter abbreviated as BUK, are Banks that conduct business activities conventionally, which in their activities provide services in payment transactions.
Sharia Commercial Banks, hereinafter abbreviated as BUS, are Banks that conduct business activities based on Sharia Principles, which in their activities provide services in payment transactions.
Sharia Business Units, hereinafter abbreviated as UUS, are operational units of the BUK headquarters functioning as the parent office of offices or units conducting business activities based on Sharia Principles, or operational units in branch offices of a Bank located outside the country conducting conventional business activities, functioning as the parent office of Sharia sub-branches and/or Sharia business units.
Banking Business Groups, hereinafter abbreviated as KUB, are Banks that are in one group due to ownership and/or Control linkages, consisting of 2 (two) or more Banks as regulated in the Financial Services Authority regulations regarding the consolidation of commercial banks.

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II. IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE ON BANKS

In order to improve Bank performance, protect Stakeholder interests, and increase compliance with applicable laws and regulations and ethical values generally applicable in the banking industry, Banks are required to conduct business activities guided by the principles of Good Corporate Governance as regulated in POJK Corporate Governance for Commercial Banks. The implementation of Corporate Governance in the banking industry must always be based on 5 (five) basic principles of Good Corporate Governance in Banks as follows:
a. Transparency (transparency), namely openness in the decision-making process and openness in the disclosure and provision of relevant information that is easily accessible by Stakeholders. b. Accountability (accountability), namely clarity of function and the execution of responsibility.
c. Responsibility (responsibility), namely the alignment of management with applicable laws and regulations, ethical values, standards, principles, and practices.
d. Independence (independency), namely a state managed independently and professionally, free from conflicts of interest and influence or pressure from any party that is not in accordance with applicable laws and regulations, ethical values, standards, principles, and practices. e. Fairness (fairness), namely equality, balance, and justice in fulfilling the rights of Stakeholders arising from agreements, applicable laws and regulations, and ethical values, standards, principles, and practices.
Banks may apply other principles related to Good Corporate Governance in Banks, adjusted to the development of the banking industry and the Bank's needs in managing corporate governance at the Bank based on generally recognized standards and the Bank's values. Other principles that may be applied by Banks include, for example, the sustainability principle and the ethical behavior principle.
Banks must follow industry dynamics to encourage the implementation of Good Corporate Governance in Banks, including by ensuring that policies and guidelines for implementing corporate governance at the Bank are in line with the development of applicable laws and regulations and are based on generally applicable standards, ethical values, principles, and practices.
For BUS and BUK that have UUS, the implementation of Good Corporate Governance, including the implementation of Sharia corporate governance as regulated in POJK Sharia Corporate Governance for Sharia Commercial Banks and UUS and Circular Letters of the Financial Services Authority regarding the implementation of Sharia corporate governance for Sharia commercial banks and Sharia business units.
In order to ensure the implementation of 5 (five) basic principles of Good Corporate Governance as referred to in item 1, Banks must conduct periodic self-assessments that at least cover 16 (sixteen) assessment factors for the implementation of corporate governance, namely:
a. the execution of duties, responsibilities, and authority of the Board of Directors; b. the execution of duties, responsibilities, and authority of the Board of Commissioners;
c. the completeness and execution of committee duties;
d. the handling of conflicts of interest; https://jdih.ojk.go.id/

e. the application of the compliance function; f. the application of the internal audit function; g. the application of the external audit function; h. the application of risk management, including the internal control system;
i. the provision of remuneration;
j. the provision of funds to related parties and the provision of large funds; k. the integrity of reporting and information technology systems;
l. the Bank's strategic plan;
m. shareholder aspects; n. the application of fraud prevention strategies, including anti-bribery; o. the application of sustainable finance, including the application of social and environmental responsibility; and p. the application of corporate governance in KUB.

For BUS and BUK that have UUS, in addition to the 16 (sixteen) assessment factors for the implementation of corporate governance as referred to in item 5, 1 (one) additional assessment factor for the implementation of corporate governance is added, namely the execution of duties, responsibilities, and authority of the Sharia Supervisory Board (DPS).
In conducting self-assessments, Banks need to pay attention to other information related to the implementation of the Bank's corporate governance outside the assessment factors for the implementation of corporate governance as referred to in items 5 and 6, such as problems arising as a result of remuneration policies at a Bank or internal disputes of the Bank that disrupt operations and/or the continuity of the Bank's business. As an example regarding remuneration, the determination of bonuses based on achieving targets at the end of the year with the determination of very high (ambitious) targets resulting in unhealthy practices by Bank management or employees in achieving those targets.
Assessments of the implementation of corporate governance are based on 5 (five) basic principles and at least cover the assessment factors for the implementation of corporate governance as referred to in items 5 and 6, grouped into 3 (three) aspects of corporate governance (governance), namely governance structure, governance process, and governance outcome, in accordance with the Financial Services Authority regulations regarding the assessment of the health level of Banks and UUS.
Banks apply the principle of Good Corporate Governance in every business activity at all levels or tiers of the organization, including shareholders, Board of Directors, Board of Commissioners, and DPS, down to operational-level employees. The business activities mentioned consist of Bank business activities, for example, in accordance with Financial Services Authority Regulations regarding the provision of commercial bank products, and other activities conducted by Banks, including the procurement of goods and/or services, employee recruitment processes, and/or the distribution of social and environmental responsibility funds.
In conducting business activities as referred to in item 9, Banks must have, evaluate, and update internal procedures regarding the implementation of Good Corporate Governance on each assessment factor for the implementation of corporate governance in accordance with applicable laws and regulations.
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In the implementation of corporate governance, the existence of Independent Commissioners and Independent Parties is required to avoid conflicts of interest (conflict of interest) in the execution of duties at all levels or tiers of the Bank's organization, check and balance, and to protect Stakeholder interests, particularly fund owners and non-controlling shareholders. To support independence in the execution of these duties, regulations regarding the waiting period (cooling off) for parties who will become Independent Parties are necessary in accordance with Article 69 of POJK Corporate Governance for Commercial Banks.
Banks periodically conduct comprehensive self-assessments (self-assessment) regarding the adequacy of corporate governance implementation so that Banks can immediately determine an action plan, including corrective actions required in case there are still weaknesses in the implementation of corporate governance as an effort to improve and increase the quality of corporate governance implementation.
Banks submit reports on corporate governance implementation and publish them on the Bank's website, as an effort to apply the transparency principle as referred to in item II.1 letter a.

III. BOARD OF DIRECTORS

Banks determine in Bank regulations regarding the term of office of the Bank's Board of Directors, along with the organizational structure, division of duties of the Board of Directors, and the mechanism for replacement directors. Bank regulations consist of the articles of association, director charter, work guidelines, and other regulations recognized by the Bank.
Banks may also determine other conditions in fulfilling Board of Directors members, for example, when Board of Directors members whose term has expired have not been replaced by the General Meeting of Shareholders (GMS), the concerned party may still execute the same authority until a replacement is determined by the GMS. The aforementioned other conditions are stated in the Bank's articles of association.
For branch offices of Banks located outside the country (KCBLN), the term of office of the Bank's Board of Directors may be fulfilled in the internal regulations of the KCBLN Headquarters regarding the appointment of KCBLN Directors, letters of decision or appointment from the KCBLN Headquarters and/or other documents that can be equated with appointment documents, which contain the term of office of the Directors.
The determination of the number and division of Board of Directors members is formulated by considering the Bank's business activities and the complexity of business activities, adjusted to the Bank's strategy and development plan.
Banks determine replacement directors (acting members of the Board of Directors or acting members) for each division of the Board of Directors by considering the functions and interests of each director as per applicable laws and regulations. The determination of replacement directors considers aspects of conflicts of interest that may occur in the decision-making process within their authority and the internal control system that divides risk management responsibility into three lines of defense (three line of defence).
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Replacement directors must be fulfilled from internal Bank parties, which can come from directors who are currently serving. In certain conditions as regulated in the Law regarding Limited Liability Companies, the Board of Commissioners may serve as replacement directors. The execution of duties by replacement directors carried out by the Board of Commissioners is guided by the implementation of Good Corporate Governance, including declarations of conflicts of interest made by the Board of Commissioners, while still paying attention to the authority of applicable laws and regulations.
Banks are not permitted to appoint replacement directors from parties outside the Bank and/or parties who have authority below the Board of Directors.
Banks may use replacement directors for a duty period of at most 6 (six) months and can be extended for a certain period based on an analysis of the Bank's needs, which has been approved by the Financial Services Authority by submitting a request letter containing, among other things:
a. reasons for extending the term of office of the replacement director; b. plans or estimated time required by the Bank to fill the director position; and
c. information on replacement director candidates (if already existing and in process in the committee that oversees the nomination function of the Bank).
The submission of requests regarding the extension of replacement directors is submitted by the Bank to the Financial Services Authority at most 1 (one) month before the end of the term of office of the concerned replacement director.
The letter is addressed to the Banking Supervision Department or the local Financial Services Authority Office according to the territory where the Bank's headquarters or KCBLN is located.
In the event that the Board of Directors consists of only 1 (one) director, the duties and responsibilities of the director overseeing the compliance function are executed by the head of the Bank's compliance work unit for at most 6 (six) months.
The President Director or Chief Executive Director must come from a party independent from the controlling shareholders of the Bank. The independence of the President Director or Chief Executive Director can be fulfilled if the concerned party does not have financial relations, management relations, ownership relations, and/or family relations with the controlling shareholders of the Bank.
a. What is meant by controlling shareholders are legal entities, individuals, and/or business groups in accordance with Financial Services Authority Regulations regarding the assessment of competence and propriety for key parties of financial service institutions. Included in the definition of controlling shareholders of Banks are shareholders of the Bank up to the ultimate controlling shareholders (PSPT/ultimate shareholders) determined by the Financial Services Authority based on the results of the assessment of competence and propriety (PKK) and/or based on Financial Services Authority administrative records in the case of determination before the relevant Financial Services Authority Regulation regarding PKK is issued. b. What is meant by having financial relations is in the event that a person receives income, financial assistance, and/or loans from the controlling shareholders of the Bank.
c. What is meant by having management relations is in the event that a person holds a position as a member of the Board of Directors, member of the Board of Commissioners, or Executive Officer at another company controlled by the controlling shareholders of the Bank, which ownership can be done directly or indirectly.
d. What is meant by having ownership relations is in the event that a person becomes:

a shareholder in the company of the controlling shareholders of the Bank; and/or
a shareholder of the Bank together with the controlling shareholders of the Bank.
Bank share ownership resulting from management shares option programs (MSOP) and/or employee share ownership programs (ESOP) which is not more than 5% (five percent) of the Bank's paid-up capital is not included in the aforementioned ownership relations. Share ownership of the Chief Executive Director or directors overseeing the compliance function resulting from management shares option programs (MSOP) and/or employee share ownership programs (ESOP) is not calculated in the assessment of the concerned party's independence as long as:
share ownership is a policy of the controlling shareholders and/or ultimate controlling shareholders of the Bank and is not an initiative of the Chief Executive Director or directors overseeing the compliance function;
share ownership is not for trading; and
the concerned party submits a statement letter that they always act independently while serving as Directors or even if they have shares of controlling shareholders and/or ultimate controlling shareholders of the Bank.
What is meant by share ownership not for trading is shares obtained from management shares option programs (MSOP) and/or employee share ownership programs (ESOP) that are not traded with the aim of obtaining repeated profits from the difference between sales and purchase prices (not for trading purposes). e. What is meant by having family relations is having family relations up to the second degree, both vertical and horizontal relations, including in-laws, sons/daughters-in-law, and siblings, so that what is meant by family includes:
biological/step/adopted parents;
biological/step/adopted siblings together with husbands or wives;
biological/step/adopted children;
biological/step/adopted grandparents;
biological/step/adopted grandchildren;
biological/step/adopted siblings of parents together with husbands or wives;
husbands or wives;
in-laws;
siblings-in-law;
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husbands or wives of biological/step/adopted children; and/or
grandparents of husbands or wives;
husbands or wives of biological/step/adopted grandchildren; and/or
biological/step/adopted siblings of husbands or wives together with husbands or wives.
In the event that the controlling shareholders of the Bank are legal entities, family relations between the President Director or Chief Executive Director and the controlling shareholders of the Bank are viewed from the family relations between a person and the controlling shareholders of the legal entity that is the controlling shareholders of the Bank.

To obtain approval from the Financial Services Authority in accordance with the Financial Services Authority regulations regarding the assessment of competence and propriety, the Chief Executive Director must, among other things, submit a letter of independence with an example format as shown in Appendix I, which is an integral part of this Circular Letter of the Financial Services Authority. The use of the aforementioned example format in its implementation can be adjusted to supervision needs. To ensure this independence, the Financial Services Authority may request other documents needed, for example, a statement letter from the PSP.
The dismissal or replacement of Board of Directors members before the term of office expires prioritizes the main interests of the Bank. Dismissal includes temporary dismissal.
Temporary dismissal of Board of Directors members is followed by restrictions on the authority of the temporarily dismissed Board of Directors in accordance with applicable laws and regulations. The main interests of the Bank are viewed, among other things, from the continuity of business activities and business in line with the Bank's strategic plan. The temporary dismissal of the Bank's Board of Directors is executed in accordance with the authority of the Board of Commissioners as regulated in the Law regarding Limited Liability Companies.
The dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function before the term of office expires, including temporary dismissal, must obtain approval from the Financial Services Authority before being decided in the GMS.
In the event that the dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function before the term of office expires is due to undergoing the consequences of the final results of the re-assessment of key parties with a "fail" rating, the aforementioned is equated with the approval of dismissal or replacement from the Financial Services Authority.
For KCBLN, Banks can coordinate with the KCBLN Headquarters in the event that there are plans to replace the KCBLN Chief Executive Director and/or directors overseeing the compliance function by the KCBLN Headquarters before the term of office expires. Such replacement plans are submitted to the Financial Services Authority to obtain prior approval.
In the event of dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function before the term of office expires, Banks submit requests to the Financial Services Authority at most 1 (one) month before the planned implementation of the GMS containing the agenda of the aforementioned dismissal or replacement.
Requests as referred to in item 12 can be submitted via letters or meetings accompanied by the submission of information and/or documents supporting the dismissal or replacement of the concerned party, including reasons or considerations for the dismissal or replacement along with supporting documents. Banks may also include profiles of replacement candidates deemed to meet the requirements for competence and propriety assessment.
Supporting documents include:
a. legal problems faced or the health condition of the concerned party that affects the Bank's financial condition; b. performance assessment results conducted by the Board of Commissioners that the concerned party is deemed not to support the development of the Bank's business activities and/or does not execute duties and responsibilities optimally;
c. negligence or fraud committed by the concerned party causing the Bank to suffer losses and/or disrupting the continuity of the Bank's business; and/or
d. failure to follow up on supervision results, findings, or audit results conducted by the Board of Commissioners, internal audit work units (SKAI), DPS, Financial Services Authority, or other parties.
In the event that requests are submitted via letters, the submission is addressed to the Banking Supervision Department or the local Financial Services Authority Office according to the territory where the Bank's headquarters or branch offices of Banks located outside the country are located.
Documents containing reasons for the dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function as referred to in item 13 are formulated by the committee that oversees the nomination function and approved by the majority of the Bank's Board of Commissioners.
The Financial Services Authority conducts research on the feasibility of plans for the dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function based on requests submitted by Banks and supervision data owned and other information, including supervision results both onsite or offsite.
In the event that the Financial Services Authority deems the plan feasible, the Financial Services Authority submits an approval letter to the Bank to approve the plan for dismissal or replacement, and the Bank can include the agenda for the dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function in the GMS agenda accompanied by supervision recommendations (if any).
In the event that the Financial Services Authority deems the plan unfeasible, the Financial Services Authority submits a letter to the Bank stating that the plan for the dismissal or replacement of the Chief Executive Director and/or directors overseeing the compliance function is not approved, and the Bank is prohibited from scheduling
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termination or replacement of the relevant party in the agenda of the General Meeting of Shareholders (GMS), accompanied by a supervisory recommendation (if any).

In the event that the Financial Services Authority (OJK) does not approve the plan to terminate or replace the President Director and/or Director overseeing compliance functions, but the Bank has already held a GMS for the termination or replacement of the relevant party before receiving the approval letter from the OJK, the Bank must hold a GMS again to cancel the termination or replacement of the President Director and/or Director overseeing compliance functions.
The resignation of the Board of Directors resulting in the number of Board members becoming less than 3 (three) is considered valid if it has been determined by the GMS, the appointment of new Board members has been carried out, and it has received approval from the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding the assessment of competence and propriety for key parties of financial service institutions.
For Foreign Bank Branches (KCBLN), the provisions in paragraph 19 may be applied if it has been determined by the KCBLN Headquarters (or the relevant party in the organization of Headquarters/KCBLN) and the KCBLN has appointed new Board members.
The provisions referred to in paragraphs 19 and 20 are intended to prevent a shortage of Board positions (minimum 3 people) that could disrupt the Bank's operational activities.

In the event that the Bank's management structure still does not meet all applicable provisions regarding management, the Bank may fulfill the requirements gradually based on approval from the Financial Services Authority by submitting an action plan.

The Financial Services Authority has the authority to evaluate decisions to terminate or replace Board members made before the end of their term of office and/or evaluate the resignation of Board members.

Example: The GMS on May 31, 2025, decided to terminate Mr. X as a Director of PT Bank Y, effective in June 2025, which is before Mr. X's term of office ends (Mr. X's term as Director of PT Bank Y is until June 2026).

Based on this, the Financial Services Authority has the authority to evaluate the GMS decision terminating Mr. X to assess whether the termination meets Article 10 paragraph (2) of the OJK Regulation on General Bank Corporate Governance. In the event that the Financial Services Authority assesses that the termination is not appropriate, the Financial Services Authority issues an educational letter to the Bank and/or orders the Bank to hold a GMS to cancel the termination of Mr. X.

The Board of Directors is required to hold regular meetings, whether conducted online or offline, attended by a majority of Board members, which are held:

a. among the Board at least 1 (one) time every month; b. between the Board and the Board of Commissioners at least 1 (one) time in 4 (four) months; and
c. between the Board and the Sharia Supervisory Board (DPS) at least 1 (one) time in 4 (four) months, for Islamic Commercial Banks (BUS) and Islamic Rural Banks (BUK) that have Sharia Business Units (UUS).

These provisions are minimum obligations that must be fulfilled by the Bank's Board of Directors in conducting meetings among the Board, meetings of the Board of Directors with the Board of Commissioners, and meetings of the Board of Directors with the DPS.

Meeting results must be documented in writing, containing at least the agenda for discussion, attendance list, and decisions/results of the discussion.

For Foreign Bank Branches (KCBLN) that already have several committee meetings and/or monthly coordination meetings attended by all Board members, this can fulfill the obligation of meetings among the Board.

Meetings of the Board of Directors with the Board of Commissioners function for KCBLN can be fulfilled through meetings with officials at regional offices who carry out the Board of Commissioners function for KCBLN in Indonesia (depending on the organization of each KCBLN).

Meeting results must be documented in writing, containing at least the agenda for discussion, attendance list, and decisions/results of the discussion.

Board members are prohibited from holding concurrent positions:

a. as a member of the Board of Directors, member of the Board of Commissioners, member of the Sharia Supervisory Board, or executive officer at a bank, company, and/or other institution; b. in functional task fields at the Bank's financial institution and/or non-bank financial institutions located domestically or abroad;
c. in other positions that may cause a conflict of interest in the implementation of duties as a Board member; and/or
d. in other positions in accordance with applicable legislation.

Concurrent positions are not included in the following cases for Board members:

a. responsible for supervision over the Bank's participation in subsidiary companies, b. carrying out functional tasks as a member of the Board of Commissioners at a non-bank subsidiary company controlled by the Bank;
c. responsible for supervising pension funds or carrying out tasks as a pension supervisory board, which is owned by the Bank;
d. carrying out tasks as a substitute director; and/or e. holding positions in non-profit organizations or institutions, provided that it does not cause the relevant party to neglect the implementation of duties and responsibilities as a Board member.

The Board of Directors discloses to employees the Bank's strategic policies in the field of personnel. The strategic policies in the field of personnel include, among others, policies regarding recruitment systems, promotion systems, remuneration systems, and the Bank's plan to conduct efficiency through employee reduction. Disclosure regarding these policies must be carried out through channels known or easily accessible by employees.
The Board of Directors is prohibited from granting general power of attorney to other parties that results in the transfer of the Board's duties and functions as regulated in the OJK Regulation on General Bank Corporate Governance. Granting general power of attorney is the granting of power to 1 (one) or more employees or other persons that results in the transfer of the Board's duties, authority, and responsibilities entirely, i.e., without limitations on scope and time.
All Board decisions are taken in accordance with guidelines and working rules, which are binding and become the responsibility of all Board members. In the event of a difference of opinion (dissenting opinion), it must be clearly stated in the minutes of the Board of Directors meeting along with the reasons for the difference of opinion. Regarding this matter, copies of the Board of Directors meeting minutes signed by all attending Board members must be distributed to all Board members directly or electronically.
For Islamic Commercial Banks (BUS) and Islamic Rural Banks (BUK) that have Sharia Business Units (UUS), the implementation of duties, responsibilities, and authority of the Board of Directors also refers to the provisions of the Financial Services Authority regarding the corporate governance of Islamic commercial banks and Sharia business units.

IV. BOARD OF COMMISSIONERS

Members of the Board of Commissioners consist of independent commissioners and non-independent commissioners.
Foreign Bank Branches (KCBLN) designate parties to carry out supervisory functions performed by officials at regional offices, headquarters, or as needed, to carry out functions similar to the Board of Commissioners in supervising or supervising KCBLN activities in Indonesia.

Given that these officials are, among others, employees of regional or headquarters offices, the provisions regarding the term of office of Board of Commissioners members do not apply to the designated parties.

The supervisory function for KCBLN is entrusted to the policy of the KCBLN Headquarters, while still considering that the implementation of the supervisory function can be carried out effectively even if not domiciled in Indonesia.

Independent Commissioners are determined to be at least 50% (fifty percent) of the total number of Board of Commissioners members. Independent Commissioners are members of the Board of Commissioners who do not have financial relationships, management relationships, ownership relationships, and/or family relationships with Board members, other Board of Commissioners members, and/or controlling shareholders, including the ultimate controlling shareholder, or relationships with the Bank that can influence the ability to act independently.

The definition of "having financial relationships, management relationships, ownership relationships, and/or family relationships with Board members, other Board of Commissioners members, and/or controlling shareholders or relationships with the Bank that can influence the ability to act independently" is as follows:

a. The term controlling shareholder refers to legal entities, individuals, and/or business groups as referred to in the Financial Services Authority provisions regulating the assessment of competence and propriety for key parties of financial service institutions.

Included in the definition of the Bank's controlling shareholder are the Bank's shareholders up to the ultimate controlling shareholders (PSPT/ultimate shareholders) determined by the Financial Services Authority based on the results of the assessment of competence and propriety (PKK) and/or based on the Financial Services Authority's administrative records in the event of their determination before the Financial Services Authority Regulation regarding the assessment of competence and propriety is issued.

b. The term having financial relationships refers to a situation where a person receives income, financial assistance, or loans from:

Board members, and/or members of the Bank's Board of Commissioners;
companies whose controlling shareholders are Board members, members of the Bank's Board of Commissioners;
and/or
the Bank's controlling shareholders.

c. The term having management relationships refers to a situation where a person holds a position as:

a member of the Board of Directors or member of the Board of Commissioners at a company whose Board of Commissioners members become Board members, and/or members of the Bank's Board of Commissioners;
a member of the Board of Directors or member of the Board of Commissioners, at a company whose controlling shareholder is a Board member, and/or member of the Bank's Board of Commissioners; and/or
a member of the Board of Directors, member of the Board of Commissioners, or Executive Officer at another company controlled by the Bank's controlling shareholder, where ownership can be direct or indirect.

d. The term having ownership relationships refers to a situation where a person becomes a shareholder in:

companies jointly owned by Board members, members of the Board of Commissioners, and/or the Bank's controlling shareholders so that they jointly become controlling shareholders in that company; and/or
the company that is the controlling shareholder of the Bank.

e. The term having family relationships refers to family relationships up to the second degree, both vertical and horizontal relationships, including parents-in-law, children-in-law, and siblings-in-law, so that family includes:

biological/step/adoptive parents;
biological/step/adoptive siblings together with their husbands or wives;
biological/step/adoptive children;
biological/step/adoptive grandparents;
biological/step/adoptive grandchildren;
biological/step/adoptive siblings of parents together with their husbands or wives;
husbands or wives;
parents-in-law;
siblings-in-law;
husbands or wives of biological/step/adoptive children;
grandparents of husbands or wives;
husbands or wives of biological/step/adoptive grandchildren; and/or
biological/step/adoptive siblings of husbands or wives together with their husbands or wives.

In the event that the Bank's controlling shareholder is a legal entity, the family relationship between the Independent Commissioner and the Bank's controlling shareholder is viewed from the family relationship between a person and the controlling shareholder of the legal entity that is the controlling shareholder of the Bank.

f. The term relationships with the Bank that can influence a person's ability to act independently refers to relationships in the form of:

ownership of Bank shares with an ownership amount of more than 5% (five percent) of the Bank's paid-up capital; and/or
receiving or giving income, financial assistance, or loans from or to the Bank that causes the party giving income, financial assistance, or loans to have the ability to influence (controlling influence) the party receiving income, financial assistance, or loans, such as:

a) affiliated parties, i.e., parties providing services to the Bank, including public accountants, appraisers, legal consultants, and other consultants; and/or b) financial transactions with the Bank that can affect the sustainability of the Bank's business and/or the party conducting the financial transaction, including core debtors, core depositors, or companies whose majority of funding sources are obtained from the Bank.

The term core debtors and core depositors refers to core debtors and core depositors as referred to in provisions regulating the reporting of commercial banks through the Financial Services Authority's reporting system.

Candidates for Independent Commissioners must have:

a. adequate knowledge in the banking field that is relevant to the position of Independent Commissioner; and b. experience in the banking and/or financial fields.

Fulfillment of requirements for candidates for Independent Commissioners is cumulative to optimize the presence of Independent Commissioners in the Bank so that they are able to carry out supervision more independently and competently in accordance with their roles and functions.

Termination or replacement before the end of the term of office of Board of Commissioners members prioritizes the main interests of the Bank. Termination includes the temporary dismissal of the Board of Commissioners by the GMS, taking into account the restriction of authority in accordance with applicable legislation.

The temporary dismissal of Bank Board of Commissioners members can be based on personal reasons and other reasons.

a. personal reasons include, among others:

the health condition of the Board of Commissioners member that affects their performance;
conflict of interest in the implementation of duties and responsibilities; and/or
other reasons.

b. other reasons include, among others:

recommendation from Shareholders and/or the Bank's Board of Commissioners;
results of the assessment of the Board of Commissioners member's performance based on internal and/or external assessments (including the Financial Services Authority);
legal issues being faced by the Board of Commissioners member, both criminal and civil, which cause disruption to the implementation of their duties and responsibilities.

Termination or replacement of Independent Commissioners before the end of their term of office must obtain approval from the Financial Services Authority before being decided in the GMS.

In the event that the termination or replacement of Independent Commissioners before the end of their term of office is due to undergoing the consequences of the final result of the re-assessment of key parties with a "fail" predicate, this is equated with approval for the termination or replacement from the Financial Services Authority.

In the context of terminating or replacing Independent Commissioners before the end of their term of office, the Bank submits a request to the Financial Services Authority at the latest 1 (one) month before the planned implementation of the GMS containing the agenda for the termination or replacement in question.
The request referred to in paragraph 7 can be submitted via letter or meeting accompanied by the submission of information and/or documents supporting the termination or replacement in question, such as reasons or considerations for the termination or replacement along with supporting documents. The Bank may also include the profile of the replacement candidate who is assessed to meet the requirements for competence and propriety assessment.

Supporting documents include, among others:

a. legal issues faced or health conditions of the relevant party that affect the Bank's financial condition; b. results of performance assessments conducted by the Bank that the relevant party is assessed to not support the development of the Bank's business activities and/or not carry out duties and responsibilities optimally;
c. negligence or fraud committed by the relevant party causing the Bank to suffer losses and/or disrupting the sustainability of the Bank's business; and/or
d. failure to follow up on audit findings conducted by the Internal Audit Committee (SKAI), Financial Services Authority, or other parties.

In the event that the request is submitted via letter, the letter is addressed to the Bank Supervision Department or the local Financial Services Authority Office according to the area where the Bank's or KCBLN's headquarters is located.

Documents containing the reasons for the termination or replacement of Independent Commissioners as referred to in paragraph 8 are prepared by the committee overseeing the nomination function and approved by a majority of the Bank's Board of Commissioners members.
The Financial Services Authority conducts research on the feasibility of the plan to terminate or replace Independent Commissioners based on the request submitted by the Bank and supervisory data owned and other information, including supervision results both on-site and off-site.
In the event that the Financial Services Authority assesses that the plan is feasible, the Financial Services Authority issues an approval letter to the Bank to approve the plan for termination or replacement, and the Bank may include the agenda for the termination or replacement of Independent Commissioners in the GMS, accompanied by a supervisory recommendation (if any).
In the event that the Financial Services Authority assesses that the plan is not feasible, the Financial Services Authority issues a letter to the Bank stating that the plan for the termination or replacement of Independent Commissioners is not approved, and the Bank is prohibited from placing the termination or replacement of the relevant party in the GMS agenda, accompanied by a supervisory recommendation (if any).
In the event that the Financial Services Authority does not approve the plan for the termination or replacement of Independent Commissioners, but the Bank has already held a GMS for the termination or replacement of Independent Commissioners before receiving the approval letter from the Financial Services Authority, the Bank must hold a GMS again to cancel the termination or replacement of the Independent Commissioner.
Independent Commissioners who have not obtained approval from the Financial Services Authority are prohibited from taking actions, duties, and functions as Independent Commissioners of the Bank even if they have received approval and have been appointed by the GMS.
Cooling-off period is the interval between the effective end of the relevant party's term of office as declared in writing as a member of the Bank's Board of Directors or Executive Officer of the Bank or other parties having a relationship with the Bank, with the effective appointment of the relevant party as an Independent Commissioner. The cooling-off period for candidates for Independent Commissioners is carried out outside the relevant Bank.
Former members of the Bank's Board of Directors or former Executive Officers of the Bank or parties having a relationship with the Bank that can influence the ability to act independently as in item IV.3.f, can become Independent Commissioners at the relevant Bank, after undergoing a cooling-off period of at least 1 (one) year. Cooling-off can also be applied to candidates for Independent Commissioners coming from parties having a conflict of interest with the Bank in accordance with Article 38 paragraph (7) of the OJK Regulation on General Bank Corporate Governance.
Former presidents, former members of the Board of Directors overseeing supervisory functions, or Executive Officers carrying out supervisory functions at the relevant Bank can become Independent Commissioners at the relevant Bank after undergoing a cooling-off period of at least 6 (six) months with a working period in the said position of at least 1 (one) year before finishing work.
Non-Independent Commissioners can transition to Independent Commissioners at the relevant Bank or Islamic Rural Bank (KUB) by meeting the requirements as Independent Commissioners, after undergoing a cooling-off period of at least 1 (one) year.
Independent Commissioners can be reappointed after obtaining GMS approval for a maximum of 2 (two) consecutive terms of office. Extension of the term of office for more than 2 (two) periods is possible after there is a recommendation from the committee overseeing the nomination function that has considered:

a. the results of the relevant party's performance assessment; b. the results of the Board of Commissioners meeting assessment stating that the relevant party can still act independently;
c. the results of the assessment by the head of the Internal Audit Committee (SKAI) and Executive Officers overseeing the HR function stating that the Independent Commissioner can still act independently; and
d. the relevant party's statement regarding their independence.

Requests for competence and propriety assessment for candidates for Independent Commissioners are submitted at the earliest 90 (ninety) days after the relevant party starts carrying out the cooling-off period.
Changes in job status from Non-Independent Commissioner to Independent Commissioner at the same Bank must obtain approval from the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding the assessment of competence and propriety for key parties of financial service institutions. To obtain approval, candidates for Independent Commissioners must, among others, submit a letter of independence statement with a sample format as in Appendix I, which is an integral part of this Financial Services Authority Circular. The use of the sample format in implementation can be adjusted to supervisory needs. To ensure this independence, the Financial Services Authority may request other documents needed, for example, a letter of statement from controlling shareholders.
Members of the Board of Commissioners are prohibited from holding concurrent positions:

a. as a member of the Board of Directors, member of the Board of Commissioners, member of the Sharia Supervisory Board, or executive officer at a financial institution or financial company, whether a Bank or non-bank; b. as a member of the Board of Directors, member of the Board of Commissioners, member of the Sharia Supervisory Board, or executive officer at more than 1 (one) non-financial institution or company, whether located domestically or abroad;
c. in functional task fields at the Bank's financial institution and/or non-bank financial institutions located domestically or abroad;
d. in other positions that may cause a conflict of interest in the implementation of duties as a member of the Board of Commissioners; and/or e. in other positions in accordance with applicable legislation.

Concurrent positions are not included in the following cases:

a. members of the Board of Commissioners serve as members of the Board of Directors, members of the Board of Commissioners, or executive officers carrying out supervisory functions at 1 (one) non-bank subsidiary company controlled by the Bank; b. Non-Independent Commissioners carry out functional tasks from the Bank's controlling shareholder in the form of a legal entity at the Bank and/or KUB; and/or
c. members of the Board of Commissioners hold positions in non-profit organizations or institutions,

provided that it does not cause the relevant person to neglect the implementation of duties and responsibilities as members of the Board of Commissioners.

Independent Commissioners are prohibited from holding concurrent positions as public officials. This prohibition applies to both structural and functional officials in public bodies.

Public officials are persons appointed and given tasks to hold specific positions or offices in public bodies.

Public bodies are executive, legislative, and judicial institutions, and other bodies whose main functions and tasks are related to the administration of the state, whose funds are partially or wholly sourced from the State Budget and/or Regional Budgets.

The prohibition on Independent Commissioners who are public officials is intended to avoid conflicts of interest that may arise, and to ensure that the position of Independent Commissioner at the Bank is held by parties with the competence and ability as required by the Bank. The Bank needs to further examine the profile and background of prospective Independent Commissioners before they are submitted to the General Meeting of Shareholders (GMS) and to the Financial Services Authority (OJK).

For Large and Systemically Important Banks (KCBLN), parties appointed to carry out supervisory functions for KCBLN must not hold concurrent positions that could influence the implementation of supervisory functions at KCBLN and/or harm or have a negative impact on KCBLN.
The Board of Commissioners is prohibited from participating in decision-making on the Bank's operational activities, except for:

a. provision of funds to related parties; and b. matters regulated in the Bank's Articles of Association or legislation.

The involvement or approval of the Board of Commissioners in decision-making on operational activities as referred to in letters a and b is part of the early supervision efforts carried out by the Board of Commissioners. The involvement or approval of the Board of Commissioners does not negate the responsibility of the Board of Directors in managing the Bank.

The Board of Commissioners must notify the Financial Services Authority (OJK) no later than 5 (five) working days from the discovery of:

a. violations of legislation in the field of finance and banking; and/or b. conditions or anticipated conditions that may endanger the continuity of the Bank's business,

among others based on recommendations from committees that assist in the effectiveness of the implementation of the Board of Commissioners' duties. The reported matters are findings as referred to in letters a and b that have not been or were not reported by the Bank and/or by the director overseeing the compliance function to the Financial Services Authority (OJK).

Board of Commissioners meetings are held periodically at least once every 2 (two) months and attended in person by all members of the Board of Commissioners at least 2 (two) times in 1 (one) year, preferably for the purpose of evaluating or setting strategic policies and evaluating the realization of the Bank's Business Plan (RBB). In the event that Non-Independent Commissioners cannot attend Board of Commissioners meetings in person, they may attend Board of Commissioners meetings using teleconferencing technology.
In the event that Board of Commissioners meetings are held using teleconferencing technology, they must be accompanied by:

a. the basis for the decision to hold meetings using teleconferencing technology, among others such as the Bank's internal regulations and the minutes of the Board of Commissioners meeting; b. proof of recording of the meeting held, which is stored or accounted for in accordance with legislation and/or Bank policies; and
c. minutes of the meeting referred to, which are signed by all participants present in person or via teleconferencing technology.

Copies of the Board of Commissioners meeting minutes that have been signed by all attending members of the Board of Commissioners must be distributed to all members of the Board of Commissioners directly or electronically.
The implementation of Inter-Board of Commissioners meetings is intended as a communication medium between members of the Board of Commissioners in the implementation of supervisory functions in an orderly manner, and this forum can be used, among others, to decide on policies, actions, and/or resolve issues at KCBLN related to the implementation of the Board of Commissioners' functions.
For Commercial Banks (BUS) and Rural Banks (BUK) that have Sharia Business Units (UUS), the implementation of duties, responsibilities, and authorities of the Board of Commissioners also refers to the regulations of the Financial Services Authority (OJK) regarding the governance of Sharia commercial banks and Sharia business units.

V. SHARIA SUPERVISORY BOARD

For Commercial Banks (BUS) and Rural Banks (BUK) that have Sharia Business Units (UUS), the implementation of duties, responsibilities, and authorities of the Sharia Supervisory Board (DPS) refers to the regulations of the Financial Services Authority (OJK) regarding the governance of Sharia commercial banks and Sharia business units.
The dismissal or replacement of DPS members prioritizes the Bank's main interests. Dismissal, including temporary dismissal, takes into account the restriction of authorities in accordance with the provisions of legislation.

Temporary dismissal of DPS members can be based on personal reasons and other reasons.

a. personal reasons include:

the health condition of the DPS member that affects the performance of the relevant person;
conflict of interest in the implementation of duties and responsibilities; and/or
other reasons.

b. other reasons include:

recommendation from Shareholders and/or the Bank's Board of Commissioners;
results of DPS member performance assessments based on internal and/or external assessments (including the Financial Services Authority);
legal issues being faced by the DPS member, whether criminal or civil, that disrupt the implementation of their duties and responsibilities.

Dismissal or replacement of DPS members before the end of their term of office must obtain approval from the Financial Services Authority (OJK) before being decided in the GMS.

In the event that the dismissal or replacement of the DPS before the end of the term of office is due to undergoing the consequences of the final result of a re-evaluation of key parties with a "failed" rating, this is equated with the approval of dismissal or replacement from the Financial Services Authority (OJK).

In the context of dismissal or replacement of DPS members before the end of their term of office, the Bank submits a request to the Financial Services Authority (OJK) no later than 1 (one) month before the planned implementation of the GMS containing the agenda of such dismissal or replacement.
The request as referred to in item 4 can be submitted via letter or meeting accompanied by the submission of information and/or documents supporting the dismissal or replacement of the relevant person, among others reasons or considerations for the dismissal or replacement along with supporting documents. The Bank can also include the profile of the replacement candidate who is deemed to meet the requirements for competency and propriety assessment.

Supporting documents include:

a. legal issues faced or health conditions of the relevant person that affect the financial condition of the Bank; b. results of performance assessments conducted by the Bank that the relevant person is deemed not to support the development of the Bank's business activities and/or does not perform duties and responsibilities optimally;
c. negligence or fraud committed by the relevant person causing the Bank to incur losses and/or disrupt the continuity of the Bank's business; and/or
d. failure to follow up on audit findings conducted by the Internal Audit Unit (SKAI), the Financial Services Authority (OJK), or other parties.

In the event that the request is submitted via letter, the submission of the letter is addressed to the Sharia Banking Department or the Financial Services Authority (OJK) Office in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province or Banten Province, or the local Financial Services Authority (OJK) Office, for Banks headquartered outside the Special Capital Region of Jakarta Province or Banten Province.

The Financial Services Authority (OJK) conducts research on the feasibility of the plan for dismissal or replacement of DPS based on the request submitted by the Bank and supervisory data owned and other information, among others supervision results both onsite and offsite.
Documents containing reasons for the dismissal or replacement of DPS as referred to in item 5 are prepared by the committee overseeing the nomination function and approved by the majority of members of the Bank's Board of Commissioners.
In the event that the Financial Services Authority (OJK) deems the plan feasible, the Financial Services Authority (OJK) sends an approval letter to the Bank to approve the plan for dismissal or replacement, and the Bank can include the agenda for dismissal or replacement of DPS members in the GMS accompanied by supervisory recommendations (if any).
In the event that the Financial Services Authority (OJK) deems the plan not feasible, the Financial Services Authority (OJK) sends a letter to the Bank stating that the plan for dismissal or replacement of DPS members is not approved and the Bank is prohibited from including the dismissal or replacement of the relevant person in the GMS agenda accompanied by supervisory recommendations (if any).
In the event that the Financial Services Authority (OJK) does not approve the plan for dismissal or replacement of DPS members but the Bank has already held the GMS for dismissal or replacement of DPS members before receiving the approval letter from the Financial Services Authority (OJK), the Bank must hold a GMS again to cancel the dismissal or replacement of the DPS.
DPS members who have not obtained approval from the Financial Services Authority (OJK) are prohibited from taking actions, performing duties, and functions as DPS even if they have obtained approval and been appointed by the GMS.
The DPS can submit reports to the Financial Services Authority (OJK) if significant violations of Sharia Principles are found, among others that have the potential to affect the financial condition and/or reputation of the bank.
DPS meetings are held periodically at least once every 1 (one) month and attended by the majority of DPS members.

Physical DPS meetings are attended by all DPS members at least 2 (two) times in 1 (one) year, preferably for the purpose of evaluating or setting strategic policies and evaluating the realization of the RBB.

In the event that DPS meetings are held using teleconferencing technology, they must be accompanied by:

a. the basis for the decision to hold meetings using teleconferencing technology, among others such as the Bank's internal regulations and the minutes of the DPS meeting; b. proof of recording of the meeting held, which is stored or accounted for in accordance with legislation and/or Bank policies; and
c. minutes of the meeting referred to, which are signed by all participants present in person or via teleconferencing technology.

Copies of DPS meeting minutes that have been signed by all attending DPS members must be distributed to all DPS members directly or electronically.

VI. COMMITTEES

The Board of Directors forms committees that support the implementation of its duties and functions in accordance with the regulations of the Financial Services Authority (OJK), at least including the risk management committee, credit or financing policy committee, credit or financing committee, and information technology steering committee. The Board of Directors can form other committees adjusted to the needs and/or complexity of the Bank. The membership and responsibilities of each committee are in accordance with the relevant Financial Services Authority (OJK) Regulations. Example: membership of the risk management committee in accordance with the Financial Services Authority (OJK) Regulation regarding the implementation of risk management for commercial banks and the Financial Services Authority (OJK) Regulation regarding the implementation of risk management for Sharia commercial banks and Sharia business units. In addition, a Bank Human Resources Policy Committee can also be formed, with committee membership adjusted to the needs of the Bank, among others the HR Director, Executive Officials in the field of HR, and/or Executive Officials in other fields deemed relevant.
The Board of Commissioners forms at least the audit committee, risk monitoring committee, and remuneration and nomination committee, to support the effectiveness of the implementation of the duties and responsibilities of the Board of Commissioners. The Board of Commissioners can form other committees adjusted to the needs and/or complexity of the Bank and/or expand the scope of implementation of duties, responsibilities, and authorities of committees to support the implementation of the supervisory duties and responsibilities of the Board of Commissioners. Example: Sustainable Finance Monitoring Committee.
KCBLN can make adjustments to the organization applicable to committees at KCBLN.
The membership of the audit committee must be entirely independent, consisting of at least:

a. 1 (one) Independent Commissioner who also serves as chairman; b. 1 (one) Independent Party who has expertise in the field of finance or accounting; and
c. 1 (one) Independent Party who has expertise in the field of law or banking for Banks conducting conventional business activities or 1 (one) Independent Party who has expertise in the field of Sharia banking for Banks conducting Sharia business activities or Banks that have UUS.

For BUS and BUK that have UUS, 1 (one) DPS member can become a member of the audit committee.

Members of the audit committee from Independent Parties are deemed to have expertise in the field of finance or accounting if they meet the criteria:

a. have a competency certificate in the field of finance and/or accounting issued by a domestic or international recognized institution; and b. have at least 5 (five) years of work experience in the field of finance and/or accounting.

Members of the audit committee from Independent Parties are deemed to have expertise in the field of law or banking if they meet the criteria:

a. have a competency certificate in:

the field of law, among others legal auditors, notaries, and/or contract experts; and/or
the field of banking, among others risk management as applicable to the Board of Commissioners, compliance, public accountants, accountants, general banking, wealth management, strategic planning, information technology, treasury, banking-related audit, corporate finance, payment systems and rupiah money management, consumer protection, and capital market aspects,
which are issued by domestic or international recognized institutions; and b. have at least 5 (five) years of work experience in the field of law and/or banking.

Members of the audit committee from Independent Parties are deemed to have expertise in the field of Sharia banking if they meet the criteria:

a. have a competency certificate in the field of Sharia banking issued by a domestic or international recognized institution; and b. have at least 5 (five) years of work experience in the field of Sharia banking.

The membership of the risk monitoring committee consists of at least:

a. 1 (one) Independent Commissioner who also serves as chairman; b. 1 (one) Independent Party who has expertise in the field of risk management; and
c. 1 (one) Independent Party who has expertise in the field of finance for Banks conducting conventional business activities or 1 (one) Independent Party who has expertise in the field of Sharia banking for BUS or BUK that have UUS.

For BUS and BUK that have UUS, 1 (one) DPS member can become a member of the risk monitoring committee.

Members of the risk monitoring committee from Independent Parties are deemed to have expertise in the field of risk management if they meet the criteria:

a. have a competency certificate in risk management applicable to the Board of Directors and a competency certificate in among others public accountants, accountants, treasury, and corporate finance issued by domestic or international recognized institutions; and b. have at least 2 (two) years of work experience in the field of risk management.

Members of the risk monitoring committee from Independent Parties are deemed to have expertise in the field of finance if they meet the criteria:

a. have a competency certificate in risk management applicable to the Board of Directors and a competency certificate in among others public accountants, accountants, treasury, and corporate finance issued by domestic or international recognized institutions; and b. have at least 5 (five) years of work experience in the field of economics, finance, and/or banking.

Members of the risk monitoring committee from Independent Parties are deemed to have expertise in the field of Sharia banking if they meet the criteria:

a. have a competency certificate in risk management applicable to the Board of Directors and a competency certificate in among others Sharia supervisor certification issued by domestic or international recognized institutions; and b. have at least 5 (five) years of work experience in the field of Sharia banking.

The membership of the remuneration and nomination committee consists of at least:

a. 1 (one) Independent Commissioner serving as Chairman; b. 1 (one) Non-Independent Commissioner; and
c. 1 (one) Executive Official who oversees human resources or 1 (one) representative of Bank employees.

For BUS and BUK that have UUS, 1 (one) DPS member can become a member of the remuneration and nomination committee.

In the event that the Bank does not have an Independent Commissioner, the remuneration and nomination committee consists of at least 2 (two) Independent Commissioners and 1 (one) Executive Official who oversees human resources or 1 (one) representative of Bank employees with non-contract employee status.

Executive Officials overseeing HR or employee representatives who are members of the committee must have knowledge of the Bank's remuneration and/or nomination systems and succession plans.

In the event that the Bank forms separate remuneration and nomination committees, the Executive Official or employee representative who is a member of the remuneration committee must have knowledge of the Bank's remuneration system, and the Executive Official or employee representative who is a member of the nomination committee must have knowledge of the nomination system and succession plans of the Bank.

In the event that the membership of the committee overseeing the nomination function does not meet the minimum requirements as referred to in item 6, the recommendation of the committee performing the nomination function regarding proposals for the replacement and/or appointment of Board of Directors members and/or Board of Commissioners members to the GMS as referred to in Article 9 paragraph (1) and Article 41 paragraph (1) of OJK Regulation on General Bank Governance:

a. can be accepted, in the event that the membership of the remuneration and nomination committee has at least 1 (one) Independent Commissioner or 1 (one) Non-Independent Commissioner; or b. is exempted, in the event of a vacancy in the Board of Commissioners.

The committee overseeing the nomination function is tasked and responsible for at least implementing nomination policies as in Article 73 of OJK Regulation on General Bank Governance, including in providing recommendations for the extension of the term of office of Independent Commissioners of the Bank for more than 2 (two) terms.
Independent Party is a party outside the Bank that does not have financial, managerial, ownership, and/or family relationships with members of the Board of Directors, members of the Board of Commissioners, and/or controlling shareholders including ultimate shareholders (PSPT), or relationships with the Bank, that could influence the ability to act independently.

As for what is meant by relationships with the Bank that can influence a person's ability to act independently, it is relationships in the form of:

a. ownership of Bank shares with an ownership amount of more than 5% (five percent) of the Bank's paid-up capital; and/or b. receiving or giving income, financial assistance, or loans from or to the Bank that causes the party giving income, financial assistance, or loans to have the ability to influence (controlling influence) the party receiving income, financial assistance, or loans, such as:

affiliated parties, namely parties that provide services to the Bank, among others public accountants, appraisers, legal consultants, and other consultants;
receiving income from the Bank, except for income received by Independent Parties due to holding concurrent positions as members of other committees at the same Bank; and/or
financial transactions with the Bank that can affect the continuity of the Bank's business and/or the party conducting the financial transaction, among others core debtors, core depositors, or companies whose majority of funding sources are obtained from the Bank.

What is meant by core debtors and core depositors are core debtors and core depositors as referred to in the regulations of the Financial Services Authority (OJK) regarding the reporting of commercial banks through the OJK reporting system.

Former members of the Board of Directors, Executive Officials, or parties who have relationships with the Bank that can influence the relevant person's ability to act independently, can become Independent Parties on the audit committee and/or risk monitoring committee members at the relevant Bank, after serving a waiting period (cooling off) of at least 6 (six) months.
The waiting period (cooling off) provisions to become an Independent Party on committees at the Bank as referred to in item 10 do not apply to former members of the Board of Directors who oversee supervisory functions or Executive Officials who perform supervisory functions with a working period in the relevant position of at least 1 (one) year before being appointed.
The Bank must verify the truthfulness of all documents or supporting data for the fulfillment of Independent Party requirements, among others personal statements regarding the integrity of Independent Parties.
The chairman of the committee can only hold concurrent positions as chairman of at most 1 (one) other committee at the same Bank.
Committee members from Independent Parties can hold concurrent positions as Independent Party members of other committees at the same Bank, other Banks, and/or other companies, provided that:

a. they meet all required competencies; b. they meet the independence criteria;
c. they are able to maintain Bank confidentiality;
d. they observe the applicable code of ethics; and e. they do not neglect the implementation of duties and responsibilities as committee members.

Members of the audit committee, risk monitoring committee, and remuneration and nomination committee are prohibited from being members of the Board of Directors, both at the same Bank and at other Banks.
In the implementation of their duties and responsibilities, the audit committee, risk monitoring committee, and remuneration and nomination committee must have internal policies, at least including:

a. the purpose of forming the committee; b. duties, responsibilities, and authorities of the committee;
c. structure and membership of the committee;
d. committee meetings, quorum, and decision-making; https://jdih.ojk.go.id/

e. the term of office of members of the Independent Committee; f. the performance evaluation mechanism; and g. the period for periodic review of the committee's guidelines and code of conduct, which must be known and binding on every committee member.

Committee meeting decisions are made based on deliberation for consensus. In the event that consensus cannot be reached, decision-making is conducted based on a majority vote with the principle of 1 (one) person 1 (one) vote.
For Commercial Banks (BUS) and Universal Banks (BUK) that have Sharia Business Units (UUS), the completeness and implementation of the committee's duties also refer to the regulations of the Financial Services Authority (OJK) regarding the governance of Sharia commercial banks and Sharia business units.

VII. CONFLICT OF INTEREST

Members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board (DPS), Executive Officials, and Bank employees must avoid all forms of conflict of interest in the implementation of their duties in managing and supervising the Bank.
The Bank must have and implement a conflict of interest policy aimed at identifying, reducing, and managing potential conflicts of interest that may arise in the Bank due to the implementation of business activities, to avoid decision-making that has the potential to harm or reduce the Bank's profits. This conflict of interest policy is an internal Bank policy regarding:
a. the prevention and handling of conflicts of interest that bind every member of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the DPS, Executive Officials, and Bank employees, including regarding the procedure for decision-making, including mitigation steps taken in the event of a potential conflict of interest; and b. the administration of recording, documentation, and disclosure of conflicts of interest in meeting minutes.
In the event of a conflict of interest, members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the DPS, Executive Officials, and Bank employees must disclose the conflict of interest in every decision that meets the conditions of a conflict of interest. In addition to disclosing, members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the DPS, Executive Officials, and Bank employees are prohibited from taking actions that could harm or reduce the Bank's profits.
The disclosure of conflicts of interest as referred to in item 3 is documented in conflict of interest discussion documents, including meeting minutes that contain decisions on conflicts of interest, which must at least include the name of the party with the conflict of interest, the main issue of the conflict of interest, and the basis for decision-making. The level of authorization for the meeting minutes document is adjusted to the disclosure of the conflict of interest; for example, if the party involved in the conflict of interest is at the staff/assistant manager level, the party authorizing the meeting minutes document must be at least 1 (one) level above them.
In order to prevent and handle conflicts of interest as referred to in item 2 letter a, the Bank ensures that every transaction with parties having a special relationship with the Bank is not more favorable than transactions with other parties under similar conditions or is conducted fairly. Parties having a special relationship with the Bank are:
a. Parties that control or are controlled by the Bank, whether companies or individuals, directly or indirectly, including controlling shareholders and ultimate shareholders (PSPT); b. Majority shareholders of the Bank;
c. Companies affiliated with the Bank, including:

subsidiary companies, in accordance with the Financial Services Authority Regulation regarding capital participation activities by commercial banks;
sister companies of the Bank, which are several companies that are institutionally and/or legally separate but owned and/or controlled by the same controlling shareholder;
children of the Bank's affiliated companies; and
entities established by the Bank and/or companies affiliated with the Bank for a specific purpose.
d. Members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and Executive Officials of the Bank; e. Members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and/or controlling shareholders (PSPT/ultimate shareholders) of companies affiliated with the Bank; f. Parties that have influence over members of the Board of Directors, members of the Board of Commissioners, and/or members of the DPS of the Bank; g. Parties that have direct and/or indirect interests from individuals who are controllers or controlled by the Bank, controlling shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and/or Executive Officials of the Bank, as well as members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and/or shareholders of companies affiliated with the Bank, and parties that have influence over members of the Board of Directors or members of the Board of Commissioners of the Bank; and/or h. Parties who have family relationships up to the second degree with the controllers of the Bank or those controlled by the Bank, controlling shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the DPS and/or Executive Officials of the Bank, as well as members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and/or shareholders of companies affiliated with the Bank, and parties that can influence members of the Board of Directors and/or members of the Board of Commissioners of the Bank. Family relationships up to the second degree include both vertical and horizontal relationships as explained in Article 17 of the OJK Regulation on Commercial Bank Governance.

Transactions with parties having a special relationship are transactions or agreements between the Bank and parties having a special relationship, regardless of whether the transaction is charged a price or not. Transactions with parties having a special relationship include:
a. Credit exposure or financing and claims, including on and off-balance sheet write-offs; b. Consulting, professional, agency, and other service arrangement contracts;
c. Purchase and sale of assets, including technology transfer and intangible goods (e.g., research and development, trademarks, and license agreements);
d. Construction agreements or contracts; e. Lease agreements or contracts; f. Trade and derivative transactions; g. Loans, commitments, fund transfers, and guarantees; h. Sale, purchase, or provision of goods; and/or
i. Formation of joint venture entities.
The Bank formulates and has policies and procedures for transactions with parties having a special relationship and ensures the effective implementation of these policies and procedures, to ensure that transactions with parties having a special relationship as referred to in item 5 are conducted without any conflict of interest. The policies and procedures for transactions with parties having a special relationship aim to:
a. provide guidance for the Bank to control or reduce risks and/or eliminate the Bank's exposure to related parties, if necessary; and b. prevent specific parties from benefiting from transactions with parties having a special relationship (and/or other parties related to the party having a special relationship) or having conflicts of interest from being involved in the process of granting and managing transactions with parties having a special relationship.
The policies and procedures for transactions with parties having a special relationship must at least include:
a. Definition of parties having a special relationship. The Bank's policies and procedures must clearly define "parties having a special relationship" and require the Bank to conduct periodic review and identification of the list of parties having a special relationship. The Bank must also identify all parties that potentially have a conflict of interest with the Bank, even if the said parties are not yet within the scope of parties having a special relationship; b. Scope of transactions with parties having a special relationship. Transactions with parties having a special relationship must have a broader scope, not limited to credit or financing transactions and/or counterparty risk, but also including other exposures and transactions between the Bank and parties having a special relationship;
c. Obligations of the Board of Directors and Board of Commissioners to periodically monitor transactions with parties having a special relationship;
d. Process for identifying transactions and individual exposures with parties having a special relationship, as well as identifying total exposure to parties having a special relationship; e. Guidelines for conducting transactions fairly (arm's length principle):

The Bank's policies and procedures must provide guidance for conducting transactions fairly and with treatment that is not more favorable than transactions with parties not having a special relationship under the same conditions or conducted fairly. Several aspects that need to be considered in determining fair treatment include price, commissions, interest rates or rates of return, service fees, tenor, guarantees, credit or financing assessment, and amortization;
These guidelines must also include guidance for effective procurement or pricing mechanisms to ensure that transactions are conducted with terms that prioritize the best interests of the Bank. Procurement or pricing mechanisms may include the process of engaging external experts or opening transactions for bidding;
Exceptions to this principle may be made for certain transactions between entities within a group conducted in accordance with group-wide risk management, and exceptions to favorable provisions that are part of remuneration policies. Example: policies regarding specific interest rates for employee loans;
f. Monitoring of risks arising from transactions and the Bank's exposure to parties having a special relationship, as well as the reporting process for transactions and exposures with parties having a special relationship through independent review or audit processes; g. Identification and prevention or mitigation of potential and existing conflicts of interest. Members of the Board of Directors, members of the Board of Commissioners, and members of the DPS who have interests must be excluded from the approval and/or management process of transactions with parties having a special relationship. In addition, transactions with parties having a special relationship and the elimination of exposure to parties having a special relationship must receive approval from the Bank's Board of Commissioners; h. Limits on exposure to parties having a special relationship according to the Bank's complexity. The Bank may formulate thresholds (threshold) for aggregate transaction exposure or more granular thresholds (threshold). Example: granular thresholds can be formulated based on the type of exposure or based on the counterparty depending on the nature of the transaction and risks that may arise. If the limit is only set on aggregate exposure to parties having a special relationship, the limit must be at least as strict as that applicable to exposure to a single party or a group of interconnected borrowers; and
i. Reporting mechanism to the Board of Directors or, if necessary, to the Board of Commissioners for every exception to policies and procedures and exposure limits in the implementation of transactions with parties having a special relationship, other than as referred to in letter e item 3), to be subsequently reviewed in the event of conflict of interest risks.

VIII. COMPLIANCE FUNCTION

The Bank has a director who oversees the compliance function and forms a compliance work unit.
In the event that the Board of Directors consists of only 1 (one) director, the duties and responsibilities of the director overseeing the compliance function are carried out by the head of the Bank's compliance work unit for a maximum of 6 (six) months.
The Bank ensures that the director overseeing the compliance function meets independence requirements.

The independence requirement means not having financial, managerial, ownership, and/or family relationships up to the second degree with members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and/or controlling shareholders, or relationships with the Bank that could affect the individual's ability to act independently.

The implementation of the duties of the director overseeing the compliance function and the compliance work unit, as well as the implementation of the Bank's compliance function, are carried out in accordance with the Financial Services Authority Regulation regarding the implementation of the compliance function for commercial banks.
For Commercial Banks (BUS) and Universal Banks (BUK) that have Sharia Business Units (UUS), the implementation of the compliance function, including the implementation of the Sharia compliance function, applies. The implementation of the Sharia compliance function refers to the regulations of the Financial Services Authority regarding Sharia governance for Sharia commercial banks and Sharia business units.

IX. INTERNAL AUDIT FUNCTION

The internal audit function acts independently and objectively in the implementation of its duties.
Members of the Board of Directors are responsible for:
a. developing an internal control framework to identify, measure, monitor, and control all risks faced by the Bank; b. ensuring that the Internal Audit Unit (SKAI) obtains information regarding developments, initiatives, projects, products, and operational changes as well as identified and anticipated risks;
c. ensuring that optimal corrective actions are taken against all findings and recommendations from the Internal Audit Unit (SKAI); and
d. ensuring that the head of the Internal Audit Unit (SKAI) has the necessary resources and budget to carry out duties and functions according to the annual audit plan.
Members of the Board of Commissioners are responsible for:
a. ensuring that members of the Board of Directors formulate and maintain an adequate, effective, and efficient internal control system; b. reviewing the effectiveness and efficiency of the internal control system based on information obtained from the Internal Audit Unit (SKAI) at least once in 1 (one) year; and
c. appointing an independent external quality controller to review the performance of the Internal Audit Unit (SKAI), considering the recommendations of the Audit Committee.
In the implementation of the internal audit function, the Bank communicates with the Financial Services Authority at least 1 (one) time in 1 (one) year. The implementation of communication can be conducted online and/or offline. The said communication is conducted by the head of the Internal Audit Unit (SKAI) to discuss at least:
a. risk areas identified by the Financial Services Authority and the Internal Audit Unit (SKAI); b. understanding of risk mitigation actions taken by the Bank;
c. monitoring of the Bank's follow-up on identified weaknesses;
d. findings and recommendations from the implementation of internal audit in the current year; and e. the annual audit plan.
The Bank follows up on recommendations provided by the Financial Services Authority to the Bank to improve the effectiveness and efficiency of the implementation of the internal audit function.
The implementation of the internal audit function, including the structure, authority, and main duties of the Internal Audit Unit (SKAI) and other aspects in the implementation of the internal audit function, is carried out in accordance with the Financial Services Authority Regulation regarding the implementation of the internal audit function in commercial banks.
For Commercial Banks (BUS) and Universal Banks (BUK) that have Sharia Business Units (UUS), the implementation of the internal audit function, including the implementation of the Sharia internal audit function, applies. The implementation of the Sharia internal audit function refers to the regulations of the Financial Services Authority regarding Sharia governance for Sharia commercial banks and Sharia business units.

X. EXTERNAL AUDIT FUNCTION

The Bank uses external audit service providers, namely public accountants and/or public accounting firms, in providing financial information that is integrated, transparent, and of high quality.
The use and appointment of public accountants and/or public accounting firms in the Bank are in accordance with the Financial Services Authority Regulation regarding the use of public accountant and public accounting firm services in financial service activities.
The use and appointment of public accountants and/or public accounting firms in the Bank by the Board of Commissioners consider the recommendations of the audit committee.
For Commercial Banks (BUS) and Universal Banks (BUK) that have Sharia Business Units (UUS), the implementation of the external audit function includes the implementation of external review of Sharia Governance. The implementation of external review of Sharia Governance refers to the regulations of the Financial Services Authority regarding Sharia governance for Sharia commercial banks and Sharia business units.

XI. RISK MANAGEMENT IMPLEMENTATION

The Bank implements appropriate and effective risk management and internal control systems, has an early warning system for risks, and conducts evaluation of risk management implementation in accordance with the Financial Services Authority Regulation regarding risk management implementation for commercial banks and the Financial Services Authority Regulation regarding risk management implementation for Sharia commercial banks and Sharia business units.
The Bank implements integrated governance, risk management, and compliance, supported by digitalization, technological innovation, and necessary systems and procedures. The implementation of integrated governance, risk management, and compliance is carried out by the Bank, among others, in the form of policies and procedures, coordination mechanisms, and/or integrated reporting over the 3 lines of defense, covering the business management line, the risk and compliance management line, and the internal audit line, so as to support the decision-making process.
Regulations on country risk and transfer risk in the OJK Regulation on Commercial Bank Governance complement, among others, the provisions regarding the functions of members of the Board of Directors and members of the Board of Commissioners in the implementation of risk management that includes country risk and transfer risk in accordance with Article 87 and Article 88 of the OJK Regulation on Commercial Bank Governance, as well as considering the Financial Services Authority Regulation regarding risk management implementation for commercial banks and the Financial Services Authority Regulation regarding risk management implementation for Sharia commercial banks and Sharia business units.
The Bank has policies and procedures to identify credit risks arising from country risk. For Banks exposed to country risk that directly or indirectly affect the financial position report or administrative accounts, credit risk policies and procedures contain methods formed for each funding portfolio or for each country.
For Banks that conduct partnerships and/or cooperation with parties outside the Bank related to the Bank's business activities, the Bank considers the principle of prudence and risk management as per statutory regulations, including the Banking Law.
The Bank implements an Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing of Weapons of Mass Destruction (AML, CFT, and CFPWM) program by conducting prevention and handling to ensure that the Bank's business activities are not utilized in activities related to criminal acts. The implementation of the AML, CFT, and CFPWM program is in accordance with the Financial Services Authority Regulation regarding the implementation of anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction programs in the financial services sector.
For Commercial Banks (BUS) and Universal Banks (BUK) that have Sharia Business Units (UUS), the implementation of risk management, including the implementation of the Sharia risk management function, applies. The implementation of the Sharia risk management function refers to the regulations of the Financial Services Authority regarding Sharia governance for Sharia commercial banks and Sharia business units.

XII. REMUNERATION

The Bank has policies and regulations regarding governance in the provision of remuneration.
The Bank may defer the payment of variable remuneration that is deferred (malus) or withdraw variable remuneration that has already been paid (clawback) under certain conditions established by the Bank.
Provisions regarding the implementation of governance in the provision of remuneration are in accordance with the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for Banks and Sharia Business Units.
The Bank discloses remuneration policy information in the annual report on the Bank's governance implementation. Disclosure of remuneration policies and the implementation of Good Corporate Governance for Banks that are Public Companies also considers the Financial Services Authority Regulation regarding the implementation of guidelines for public company governance.
For Commercial Banks (BUS) and Universal Banks (BUK) that have Sharia Business Units (UUS), the provision of remuneration to members of the DPS also refers to the regulations of the Financial Services Authority regarding Sharia governance for Sharia commercial banks and Sharia business units.

XIII. PROVISION OF FUNDS TO RELATED PARTIES AND LARGE FUNDS

The Bank applies the principle of prudence in the provision of funds by at least implementing the diversification of the funding portfolio provided, including the establishment of limits on the provision of funds and large funds to certain parties and/or business groups.
The implementation of the principle of prudence in the provision of funds is carried out in accordance with the Financial Services Authority Regulations regarding maximum limits for credit provision and large funds for commercial banks and the Financial Services Authority Regulations regarding maximum limits for fund disbursement and large fund disbursement for Sharia commercial banks.

XIV. REPORTING INTEGRITY AND INFORMATION TECHNOLOGY SYSTEMS

The Bank has an integrated financial reporting process to ensure the truthfulness, accuracy, and transparency of information and/or financial reports generated, with reference to the Financial Services Authority Regulation regarding the integrity of the Bank's financial reporting.
Controlling Shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the DPS, Executive Officials, and affiliated parties must avoid actions intentionally taken to cause information and/or financial reports to not reflect the Bank's actual conditions, manipulation of information and/or financial reports, Bank financial reports that do not comply with accounting standards, and Bank information and/or financial reports that do not comply with statutory regulations.
The Bank formulates, publishes, and/or implements transparency of financial and non-financial reports to all Stakeholders accurately, timely, reliably, and using generally accepted reporting standards, with reference to:
a. Financial Services Authority Regulation regarding transparency and publication of bank reports; b. Financial Services Authority Regulation regarding the organization of commercial bank products;
c. Financial Services Authority Regulation regarding consumer and public protection in the financial services sector;

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d. Financial Services Authority Regulations regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies; e. Financial Services Authority Regulations regarding bank reporting through the Financial Services Authority reporting system; and f. Financial Services Authority Regulations regarding the integrity of bank financial reporting.

In the implementation of information technology, Banks shall refer to the Financial Services Authority Regulations regarding the implementation of information technology by commercial banks, including by:
a. implementing good information technology governance in the implementation of information technology; b. implementing risk management for the implementation of information technology;
c. maintaining cyber resilience and security; and
d. developing an information technology architecture that covers the planning, design, implementation, and control processes.

XV. BANK STRATEGIC PLAN

Banks shall prepare and submit strategic plans in the form of corporate plans and business plans, including long-term business development strategies for UUS (Sharia Business Units) for Banks that have UUS, periodically, in accordance with the procedures set forth in the Financial Services Authority Regulations regarding commercial banks, Financial Services Authority Regulations regarding Sharia commercial banks, Financial Services Authority Regulations regarding bank business plans, and Financial Services Authority Regulations regarding Sharia business units.
Banks shall implement plans to address financial problems and/or strengthen the Bank's capital and UUS funds for Banks that have UUS, as stated in the RBB (Business Plan), and inform the controlling shareholders of such plans. Information to controlling shareholders may be conveyed, among other ways, through meetings and/or the Annual General Meeting of Shareholders (AGMS).
Banks shall prepare, submit, and implement plans to address potential financial problems that may occur in the Bank in the form of a recovery action plan that has obtained shareholder approval in the AGMS, in accordance with the Financial Services Authority Regulations regarding the determination of supervisory status and handling of commercial bank problems.

XVI. SHAREHOLDER ASPECTS

Bank shareholders have a role in supporting the implementation of healthy business activities of the Bank and maintaining the sustainability of the Bank's business, and are responsible for handling and resolving Bank problems. The shareholders' responsibilities are demonstrated, among others, through commitments and approvals for capital planning to strengthen capital in order to support the continuity of the Bank's business and/or the resolution of Bank problems (including capital and liquidity problems).
Shareholders shall not intervene, seek personal or specific group benefits, or have conflicts of interest in determining strategic decisions, including the appointment, replacement, and/or dismissal of members of the Board of Directors, members of the Board of Commissioners, and/or members of the Sharia Supervisory Board (DPS) before their terms end. They shall not intervene in operational activities by playing a role to maintain independence in the Bank's intermediation function so that it remains in accordance with applicable prudential principles.

Example: shareholders use and/or exploit Bank assets and/or provide special treatment outside of regulations to debtors/customers for personal interests.

Banks shall have and formulate dividend policies and conduct periodic reviews. The aforementioned dividend policies shall be communicated to all shareholders. The delivery of dividend policies may be conducted, among other ways, through the Bank's website, meetings, AGMS, and/or other media.
The Financial Services Authority has the authority to instruct and/or order the Bank to:
a. postpone, limit, and/or prohibit the distribution of Bank dividends; and/or b. hold an AGMS for the cancellation of Bank dividend distribution.
The Financial Services Authority's authority is exercised by considering external and internal aspects in accordance with the POJK on General Bank Corporate Governance.
Banks shall consider the interests or rights of shareholders, including protection for minority shareholders. Shareholder rights include, among others:
a. receiving reports on the Bank's financial condition in a timely manner; b. resolution if shareholders disagree with the Bank's activities and corporate actions;
c. voting in the AGMS; and
d. receiving dividends based on AGMS decisions in accordance with applicable legislation.
To support the protection of minority shareholders, the Bank has a communication policy that facilitates shareholders to consult on such shareholder rights, as well as shareholder efforts to support the continuity of the Bank's business.

XVII. IMPLEMENTATION OF ANTI-FRAUD STRATEGY

Banks shall have, formulate, and implement anti-fraud strategies, including implementing an anti-bribery management system, and form a working unit or function tasked with handling the implementation of anti-fraud strategies in the bank organization, which shall be carried out in accordance with the Financial Services Authority Regulations regarding the implementation of anti-fraud strategies for financial service institutions.
Banks shall avoid pressure from any party in the disbursement and approval of credit or financing, as well as the write-off of credit or financing. Credit or financing decisions shall be based on the application of the principle of separation of functions (four eyes principle) between business and risk functions in accordance with the Financial Services Authority Regulations regarding the implementation of risk management for commercial banks and Financial Services Authority Regulations regarding the implementation of risk management for Sharia commercial banks and Sharia business units.
Banks shall have and implement policies regarding the procurement of goods and/or services at the Bank and conduct periodic reviews.
Policies regarding the procurement of goods and/or services shall consider the application of Good Corporate Governance at the Bank, regardless of conflicts of interest, and consider the separation of functions and clear authority in each process to minimize fraud incidents.
The Bank's budgeting and expenditure implementation shall be carried out by considering Good Corporate Governance at the Bank and shall be based on the Bank's needs.
The allocation and use of the Bank's social and environmental responsibility funds shall be independent from:
a. the personal interests of any party internally at the Bank, including shareholders, the Board of Directors, the Board of Commissioners, DPS, Executive Officials, and Bank employees; and b. external parties to the Bank, such as vendors and other parties outside the Bank.
Members of the Board of Directors, members of the Board of Commissioners, members of Bank Committees, members of DPS, Executive Officials, and/or Bank employees are required to reject and/or prohibited from accepting orders or requests from Bank shareholders, affiliated parties, and/or other parties to:
a. carry out actions related to the Bank's business activities and/or other activities that are not in accordance with the application of Good Corporate Governance at the Bank; b. commit criminal acts and/or acts suspected of being criminal acts; and/or
c. carry out actions and matters that can harm, potentially harm, and/or reduce the Bank's profits.
Bank shareholders, affiliated parties, and/or other parties are prohibited from requesting and/or ordering Members of the Board of Directors, members of the Board of Commissioners, members of Bank Committees, members of DPS, Executive Officials, and/or Bank employees to:
a. carry out actions related to the Bank's business activities and/or other activities that are not in accordance with the application of Good Corporate Governance at the Bank; b. commit criminal acts and/or acts suspected of being criminal acts; and/or
c. carry out actions and matters that can harm, potentially harm, and/or reduce the Bank's profits. Example: one of the largest depositors requests the use of Bank facilities for personal interests.
The term "affiliated parties" as referred to in items 7 and 8 is in accordance with the Banking Law as amended by the Law on the Development and Strengthening of the Financial Sector. The term "other parties" as referred to in items 7 and 8 refers to parties that have a relationship with the Bank, including legal, ownership (direct or indirect), and/or financial relationships with the Bank, whether individuals, legal entities, non-legal entities, associations, and organized groups.

XVIII. IMPLEMENTATION OF SUSTAINABLE FINANCE

Banks shall implement sustainable finance in the Bank's business activities and formulate a sustainable finance action plan for the Bank, referring to the Financial Services Authority Regulations regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.
Banks shall have and allocate part of their funds as social and environmental responsibility funds to support the implementation of sustainable finance. The allocation and use of the Bank's social and environmental responsibility funds shall only be used to support sustainable finance implementation activities and can provide added value to the Bank, both directly and indirectly.
In the implementation of sustainable finance, Banks shall carry out business practices and investment strategies by considering, applying, and integrating environmental, social, and governance values to support at least:
a. a sustainable business ecosystem; b. product development;
c. transactions;
d. financing services for sustainable activities and financing for the transition to sustainable economic growth; e. the development of sustainable finance programs and the implementation of environmentally conscious bank operational activities; and f. social and community empowerment.
Banks shall consider climate-related risks that can have short-term, medium-term, and long-term impacts on the Bank's business and calculate these risks in business strategies and risk management frameworks.
The determination of the time horizon used by the Bank in analyzing the impact of climate-related risks shall consider, among others, the RBB (Business Plan) and government targets as stated in the Nationally Determined Contribution (NDC) document and commitments to achieve net zero emission, and/or other latest documents established or equated by the relevant ministries and/or agencies.
In managing climate-related risks, Banks shall establish roles and responsibilities for the Board of Directors, Board of Commissioners, and working units at the Bank in accordance with the organizational structure, coordination mechanisms in managing climate-related risks, and effective supervision implementation.
Banks shall have appropriate policies, procedures, and controls for effective climate-related risk management. The aforementioned policies and procedures are part of the risk management implementation policies in accordance with the Financial Services Authority Regulations regarding the implementation of risk management for commercial banks.
Banks shall consider climate-related risks in the internal control framework through 3 (three) lines of defense (three lines of defence), which include the business management line, the risk and compliance management line, and the internal audit line, to ensure that the identification, measurement, and mitigation of climate-related risks are carried out accurately, comprehensively, and effectively.
Banks shall identify, monitor, and manage climate-related risks that can affect financial conditions, including capital and liquidity. Banks must ensure that the risk appetite and risk management framework are adequate to address climate-related risks and determine approaches to identify, measure, monitor, and manage such risks.
Banks shall ensure the division of roles, responsibilities, and transparency at each layer of defense in the application of 3 (three) lines of defense (three lines of defence) in managing risks related to the impact of climate change.

XIX. GOVERNANCE IN BANK BUSINESS GROUPS

The Bank, as the parent company or the executor of the parent company in a Business Group (KUB), shall conduct periodic coordination and evaluation regarding the implementation of Good Corporate Governance at the Bank by the KUB member banks. The implementation of such coordination and evaluation is carried out to encourage the improvement of governance implementation quality for KUB member banks.
The Bank may conduct banking synergy in the form of committee support from the Bank as the parent company or the executor of the parent company. For example, Bank Aulia is the parent company of Bank Rian and Bank Surya. Ms. Yenny is a member of the integrated audit committee at Bank Aulia. As a form of banking synergy, Ms. Yenny may be seconded as a member of the Audit Committee at Bank Rian and Bank Surya.
Banks that conduct synergy in the form of committee support shall include 1 (one) employee at the level of an Executive Official who is relevant in every decision taken by its subsidiaries.
Besides the form of committee support, Banks that are part of a KUB may conduct synergy in the form of, among others, resource sharing, office networks, and/or information technology in accordance with the Financial Services Authority Regulations regarding commercial banks.
The Bank shall submit to the Financial Services Authority information regarding the implementation of such synergy, which includes a cooperation agreement document as regulated in the Financial Services Authority Regulations regarding commercial banks.

XX. REPORT ON GOVERNANCE IMPLEMENTATION AND ASSESSMENT OF GOVERNANCE IMPLEMENTATION

Banks shall prepare a report on governance implementation at the end of each fiscal year.
The governance implementation report shall consist of at least:
a. Transparency of the Bank's governance implementation; b. A self-assessment report on governance implementation according to the assessment period of the Bank's health level in the last 1 (one) year, in the format as shown in Appendix IV, which is an integral part of this Financial Services Authority Circular; and
c. An action plan and the implementation of the action plan, including completion timeframes and obstacles or hindrances to completion (if any).
The Bank shall submit the governance implementation report as referred to in item 2 to the Financial Services Authority as part of the annual financial publication report and financial performance information, with the submission procedure in accordance with the Financial Services Authority Regulations regarding bank reporting through the Financial Services Authority reporting system.
The Bank shall publish the governance implementation report containing information as referred to in item 2 letters a and b as part of the annual financial publication report and financial performance information in accordance with the Financial Services Authority Regulations regarding transparency and publication of bank reports.
The Financial Services Authority requests the Bank to revise the governance implementation report if, based on the evaluation conducted by the Financial Services Authority, the report does not match the Bank's actual condition. The revision of the governance implementation report shall be submitted completely to the Financial Services Authority and published on the Bank's website.
The Bank shall conduct a self-assessment of the implementation of Good Corporate Governance periodically in accordance with the Bank's health level assessment period.
If necessary, the Bank shall conduct a review of the self-assessment of governance implementation in accordance with the Financial Services Authority Regulations regarding the assessment of the health level of commercial banks.
The self-assessment of the implementation of Good Corporate Governance shall be conducted using the self-assessment worksheet for governance implementation as shown in Appendix III, which is an integral part of this Financial Services Authority Circular.
For Sharia Commercial Banks (BUS), the assessment of the health level of BUS for the good corporate governance factor as regulated in the Financial Services Authority Regulations regarding the assessment of the health level of Sharia commercial banks and Sharia business units shall refer to the self-assessment worksheet for governance implementation as shown in Appendix III, which is an integral part of this Financial Services Authority Circular.
In conducting the self-assessment as referred to in item 2 letter b, the Bank must first understand the purpose of the governance implementation assessment, which covers 3 (three) governance aspects, namely governance structure, governance process, and governance outcome, as well as criteria or indicators for each assessment factor.
The self-assessment of governance implementation shall be conducted by formulating an analysis of the adequacy and effectiveness of the implementation of Good Corporate Governance principles, which is documented in the self-assessment worksheet for governance implementation, with the following steps:
a. collecting relevant data and information to assess the adequacy and effectiveness of the implementation of Good Corporate Governance principles, such as management data, ownership data, business group structure, Board of Directors meeting minutes, Board of Commissioners meeting minutes, DPS meeting minutes, committee meeting minutes and reports, including annual reports, special reports from directors overseeing compliance functions, reports related to the duties of the Internal Audit Supervisory Committee (SKAI), public accountant reports especially regarding comments on the reliability of the Bank's internal control system, reports on the results of the self-assessment of the Bank's health level or RBBR, RBB reports, and RBB realization reports, Board of Commissioners reports, DPS supervision result reports, and other reports related to the implementation of Good Corporate Governance principles. b. assessing the adequacy and effectiveness of the implementation of Good Corporate Governance principles comprehensively and structurally across the three governance aspects, namely governance structure, governance process, and governance outcome, while considering the principle of significance or materiality.
c. concluding positive factors and negative factors for each governance aspect.
In concluding the positive and negative factors of the three governance aspects, the following matters shall be considered, among others:
a. The assessment must focus on the substance of governance implementation and not merely on the fulfillment of formal procedural (normative) requirements.
In assessing governance implementation, it is also necessary to consider, among others, whether governance policies and procedures have been implemented well.
Thus, in conducting the assessment of governance implementation, the Bank should not only answer questions with "yes" or "no," but must disclose the substance of the Bank's answers.
Example: when assessing the fulfillment of the completeness of organs in the Bank's organizational structure, it is also necessary to evaluate whether those organs have functioned as they should. b. The assessment of governance structure, governance process, and governance outcome is an integrated, comprehensive, and structured assessment series, so that the conclusion of the governance outcome reflects the extent to which the governance process and adequate support from the governance structure have been applied, which needs to be tested and proven further. Example: there is a problem in the governance structure, such as the absence of a director overseeing the compliance function. The absence of a director overseeing the compliance function results in a weakness in the governance process in implementing the Bank's compliance function, namely the absence of preventive actions against policies and/or Board of Directors decisions in the credit or financing field that deviate from Financial Services Authority regulations. Furthermore, the weakness in the governance process impacts the governance outcome in the form of violations of the maximum credit granting limit (BMPK) or maximum fund disbursement limit (BMPD).
c. The assessment of governance outcome includes not only qualitative aspects but also quantitative aspects, including:

Bank performance such as profitability, efficiency, and capitalization; and
improvement or decline in compliance with applicable legislation and the resolution of problems faced by the Bank, such as fraud, violations of BMPK/BMPD, and violations of regulations related to Bank reporting to the Financial Services Authority.
In this regard, the Bank must consider whether such violations occur repeatedly and/or the materiality or significance of the problems to the Bank's performance, both currently and in the future.
Furthermore, the Bank must also consider that the assessment of governance outcome has included follow-up actions that the Bank needs to take to address current problems and anticipate the emergence of problems in the future. d. In determining the ranking of the governance factor, the Bank must consider the alignment of the governance factor ranking with the significance level of the problems faced by the Bank as obtained from the conclusion of the governance implementation assessment. e. The assessment of governance structure, governance process, and governance outcome must be supported by adequate data, information, and documents.

Based on the self-assessment worksheet for governance implementation, the Bank shall make a general conclusion of the self-assessment results of governance implementation and determine the Governance Factor Ranking by referring to the Governance Factor Ranking Matrix as shown in Appendix II, which is an integral part of this Financial Services Authority Circular.
In conducting the assessment of governance implementation, the Bank must consider the assessment of the quality of risk management implementation in the context of assessing the Bank's risk profile, given that the governance factor generally has a correlation with the quality of risk management implementation. Generally, the implementation of Good Corporate Governance will ensure good risk management as reflected in the assessment of the quality of risk management implementation.
Subsequently, the Bank shall prepare the self-assessment report on governance implementation as shown in Appendix IV, which is an integral part of this Financial Services Authority Circular, which shall include at least:
a. governance factor ranking and ranking definitions; and b. ...

b. analysis of governance factors, which consists of:

identification of problems in the form of weaknesses and causes of problems (root cause); and
strengths in the implementation of governance.
In the event that based on the results of the self-assessment of governance implementation, the governance factor rank is rank 3, rank 4, or rank 5, the Bank prepares and submits an action plan containing comprehensive and systematic improvement steps and the implementation timeline of the action plan to the Financial Services Authority.

The self-assessment report on the implementation of governance is signed by the Bank's Board of Directors.
The Bank submits the self-assessment report on the implementation of the Bank's governance, both individually and on a consolidated basis, to the Financial Services Authority as set forth in Appendix IV, accompanied by the self-assessment working papers on the implementation of governance as set forth in Appendix III, simultaneously with the submission of the self-assessment results of the Bank's health level.
The Bank submits the self-assessment report on the implementation of governance with a scope in accordance with this Financial Services Authority Circular for the first time for the December 2025 position.
The Financial Services Authority conducts an assessment or evaluation of the self-assessment results of governance implementation submitted by the Bank. In the event there is a material difference between the Bank's self-assessment results of governance implementation, namely resulting in a different governance factor rank compared to the assessment or evaluation results conducted by the Financial Services Authority, the Bank must revise the self-assessment results of governance implementation.
In the event the governance factor rank results by the Financial Services Authority are classified as worse, namely rank 3, rank 4, or rank 5, the Financial Services Authority may request the Bank to submit an action plan containing comprehensive and systematic improvement steps and the implementation timeline of the action plan.
If necessary, the Financial Services Authority may request the Bank to adjust the action plan that has been submitted by the Bank.
The action plan referred to in numbers 12 is submitted in accordance with the submission procedures in accordance with the Financial Services Authority Regulation regarding the assessment of the health level for Banks and Sharia Business Units. The Bank may submit the action plan earlier, simultaneously with the submission of the self-assessment report on the implementation of governance individually. The implementation report of the governance action plan, along with the completion time and obstacles or hindrances to the completion of the action plan (if any), is submitted to the Financial Services Authority by referring to the submission procedures for the implementation report of the action plan in accordance with the Financial Services Authority Regulation regarding the assessment of the health level for Banks and Sharia Business Units. https://jdih.ojk.go.id/
Documents related to the self-assessment of governance implementation, such as the self-assessment working papers on governance implementation and the self-assessment report on governance implementation, must be properly documented.
In the event there is a difference in the governance factor rank from the Bank's self-assessment of governance implementation in the governance implementation report with the results of the governance implementation assessment by the Financial Services Authority, the Bank must revise the governance implementation report related to the Bank's self-assessment results of governance implementation. The revision of the governance implementation report:
a. is immediately submitted in full to the Financial Services Authority and published on the Bank's website; and b. is immediately published in the Bank's public financial report in the nearest period, at least covering the governance factor rank accompanied by an explanation of the rank definition.
The submission of reports to the Financial Services Authority as referred to in this Financial Services Authority Circular is addressed to:
a. The Department of Supervision of the relevant Bank for Banks with headquarters or Large Branch Offices (KCBLN) located in the Special Capital Region of Jakarta Province; or b. The local Financial Services Authority Office according to the region where the Bank's headquarters is located.

XXI. IMPLEMENTATION OF GOVERNANCE AT BRANCH OFFICES OF BANKS LOCATED ABROAD

Branch Offices of Banks Located Abroad (KCBLN) implement Good Governance at all levels or stages of the organization.
The implementation of the functions of the Board of Commissioners and the formation of committees are adjusted to the organizational structure applicable at the KCBLN and its headquarters.
In the event the organization of the KCBLN and its headquarters does not have the function of the Board of Commissioners and committees, or has the function of the Board of Commissioners and committees but does not yet comply with the provisions in accordance with the POJK on General Bank Governance, the Financial Services Authority is authorized to request adjustments to the organizational structure of the KCBLN to ensure the implementation of Good Governance in accordance with the POJK on General Bank Governance provisions.

XXII. GENERAL PRINCIPLES OF GOVERNANCE FACTOR ASSESSMENT

The Bank conducts a self-assessment of the Bank's health level using a risk-based approach or RBBR, both individually and on a consolidated basis, conducted at least every semester for the end of June and end of December positions in accordance with the Financial Services Authority Regulation regarding the assessment of the health level for Banks and Sharia Business Units.
One of the factors in the assessment of the Bank's health level is the governance factor, including Sharia Governance for Sharia Commercial Banks (BUS) and Sharia Business Units (UUS). In this regard, the Bank conducts a self-assessment of the implementation of governance in accordance with the assessment period of the Bank's health level.
The assessment of governance factors is an assessment of the quality of the Bank's management in the implementation of the principles of Good Governance, taking into account the significance or materiality of a problem to the implementation of governance in the Bank on a bank-wide basis, in accordance with the scale, characteristics, and complexity of the Bank's business. In order to ensure the implementation of the 5 (five) basic principles of Good Governance as referred to in item II.1., the Bank conducts periodic self-assessments at least on the governance factor assessment factors as referred to in item II.5. and item II.6. and other information related to the Bank's governance implementation, as referred to in item II.7. Such self-assessment is conducted comprehensively and structurally integrated into 3 (three) aspects of governance, namely governance structure, governance process, and governance outcome, as a continuous process.
The assessment of governance structure aims to assess the adequacy of the Bank's governance structure and infrastructure so that the process of implementing the principles of Good Governance produces outcomes in accordance with the expectations of the Bank's Stakeholders.
Included in the Bank's governance structure and infrastructure are, among others, composition, criteria, planning documents, organizational structure, Bank policies and procedures, management information systems, and the main duties and functions of each organizational structure, or fulfillment of other requirements.
The assessment of governance process aims to assess the effectiveness of the process of implementing the principles of Good Governance supported by the adequacy of the Bank's governance structure and infrastructure so as to produce outcomes in accordance with the expectations of the Bank's Stakeholders.
The assessment of governance outcome aims to assess the quality of outcomes that meet the expectations of the Bank's Stakeholders, which are the results of the process of implementing the principles of Good Governance and supported by the adequacy of the Bank's governance structure and infrastructure.
Included in the outcome covers qualitative aspects and quantitative aspects, among others:
a. adequacy of report transparency; b. compliance with statutory regulations;
c. consumer protection;
d. objectivity in conducting assessment or audit; e. Bank performance such as profitability, efficiency, and capitalization; and/or f. increase or decrease in compliance with regulations, compliance with Sharia Principles for BUS and BUKs that have UUS, and resolution of problems faced by the Bank, such as fraud, BMPK or BMPD, and violations of regulations related to bank reports to the Financial Services Authority.
The results of the assessment of the three aspects of governance (governance) which at least cover the governance factor assessment factors as referred to in item II.5. and item II.6. and other information related to the Bank's governance implementation as referred to in item II.7., are conducted based on a comprehensive and structured analysis framework established in the governance factor rank. The assessment of the three aspects of governance (governance) is a unity so that in the event one aspect is assessed as inadequate, weaknesses in one aspect can affect the governance factor rank.
For Banks that conduct control over subsidiaries, in conducting the assessment of governance implementation and establishing the governance factor rank on a consolidated basis, must pay attention to the following:
a. The establishment of subsidiaries to be consolidated refers to the provisions regarding the implementation of consolidated risk management for Banks that conduct control over subsidiaries. b. The governance factor assessment factors of the Bank individually can be used by the Bank when assessing governance on a consolidated basis. The governance factor assessment factors of the subsidiary used for the assessment of governance implementation on a consolidated basis are established by taking into account the scale, characteristics, and complexity of the subsidiary's business and supported by adequate data and information.
c. The establishment of the governance factor rank of the Bank on a consolidated basis is conducted by taking into account:

the significance and materiality of the Subsidiary's share to the Bank on a consolidated basis; and/or
problems related to the implementation of the principles of Good Governance in the subsidiary that significantly affect the implementation of the principles of Good Governance on a consolidated basis.
d. The establishment of the significance and materiality of the subsidiary's share can be determined through a comparison of the subsidiary's total assets to the Bank's total assets on a consolidated basis, or the significance of certain positions in the subsidiary that affect the Bank's performance on a consolidated basis.

The establishment of the governance factor rank is categorized into 5 (five) ranks, namely rank 1, rank 2, rank 3, rank 4, and rank 5. The order of the governance factor rank with a smaller number reflects better governance implementation. The establishment of the governance factor rank is conducted with reference to the governance factor rank matrix as set forth in Appendix II, which is an integral part of this Financial Services Authority Circular.

XXIII. TRANSPARENCY OF GOVERNANCE IMPLEMENTATION
Transparency of governance implementation, at least covering the disclosure of all aspects of the implementation of the principles of Good Governance, namely:

Disclosure of governance implementation at least covers:
a. Implementation of duties and responsibilities of the Board of Directors, Board of Commissioners, and DPS consists of:

number, composition, criteria, and independence of members of the Board of Directors, members of the Board of Commissioners, and members of the DPS;
duties and responsibilities of the Board of Directors, members of the Board of Commissioners, and members of the DPS; and
recommendations of the Board of Commissioners and DPS.
b. Completeness and implementation of committee duties, consisting of:
structure, membership, expertise, and independence of committee members;
duties and responsibilities of the committee;
frequency of committee meetings; and
committee work program and realization of the committee work program.
c. Implementation of compliance, internal audit, and external audit functions. The information disclosed is the performance of the implementation of the compliance, internal audit, and external audit functions, among others:
Compliance Function
The Bank's level of compliance with all statutory regulations and fulfillment of commitments with competent authorities.
Internal Audit Function
The effectiveness and scope of internal audit in assessing all aspects and elements of the Bank's activities.
External Audit Function
The effectiveness of the implementation of external audit and the Bank's compliance with regulations regarding the relationship between the Bank, public accountants and/or public accounting firms, and the Financial Services Authority for the Bank. For BUS and BUKs that have UUS, the implementation of the compliance function, internal audit function, and external audit function includes the implementation of the Sharia compliance function, Sharia internal audit function, and external review of Sharia Governance. The implementation of the Sharia compliance function, Sharia internal audit function, and external review of Sharia Governance refers to the Financial Services Authority regulations regarding Sharia governance for Sharia commercial banks and Sharia business units. d. Implementation of risk management, at least covering:
active supervision by the Board of Directors, Board of Commissioners, and DPS;
adequacy of risk management policies and procedures and the establishment of risk limits;
adequacy of the process of risk identification, measurement, monitoring, and control as well as the risk management information system; and
comprehensive internal control system.
For BUS and BUKs that have UUS, the implementation of risk management includes the implementation of the Sharia risk management function. The implementation of the Sharia risk management function refers to the Financial Services Authority regulations regarding Sharia governance for Sharia commercial banks and Sharia business units. e. Provision of remuneration which includes information on remuneration policies in accordance with the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for general banks. For BUS and BUKs that have UUS, the provision of remuneration for DPS members also refers to the Financial Services Authority regulations regarding Sharia governance for Sharia commercial banks and Sharia business units. f. Provision of funds to related parties and large exposure. The information to be disclosed is the total debit balance or recorded value of the provision of funds to related parties and to core debtors (individuals or groups) per the report position, as set forth in Appendix V, which is an integral part of this Financial Services Authority Circular. g. Transparency of the Bank's financial and non-financial conditions not yet disclosed in other reports, among others, reports that need to be disclosed other than as regulated in the provisions related to transparency and publication of Bank reports. h. Bank strategic plan includes:
Corporate plan; and
RBB.
i. Shareholder aspects, among others, covering information regarding the role of shareholders in supporting the implementation of healthy business activities of the Bank and maintaining the sustainability of the Bank's business.
j. Implementation of anti-fraud strategy, including anti-bribery, which includes information regarding the anti-fraud strategy contained in 4 (four) pillars in accordance with the Financial Services Authority Regulation regarding the implementation of anti-fraud strategy for financial service institutions. k. Implementation of sustainable finance, including the implementation of social responsibility, among others, information related to the summary of the sustainable finance action plan that has been implemented by the Bank.
l. Implementation of governance in KUB (Banking Group), among others, covering the structure of the latest KUB period consisting of the parent company and subsidiaries. Information regarding subsidiaries contains the name of the company and the percentage of share ownership of the parent company to the subsidiary as set forth in Appendix V, which is an integral part of this Financial Services Authority Circular.
m. Other information related to the Bank's governance, among others, in the form of owner intervention, internal disputes, or problems arising as a result of remuneration policies at the Bank.

Share ownership of members of the Board of Directors, members of the Board of Commissioners, and members of the DPS reaching 5% (five percent) or more of paid-up capital, which includes the type and number of share certificates in:
a. the Bank in question; b. other banks;
c. non-bank financial institutions; and
d. other companies, which are located both domestically and abroad.
Financial relationships and family relationships of members of the Board of Directors, members of the Board of Commissioners, and members of the DPS with other members of the Board of Directors, other members of the Board of Commissioners, other members of the DPS, and/or controlling shareholders of the Bank.
Frequency of Board of Commissioners Meetings and DPS Meetings
Disclosure regarding the frequency of Board of Commissioners meetings and DPS meetings for BUS and BUKs that have UUS, at least covers:
a. the number of meetings held in 1 (one) year; b. the number of meetings attended physically and/or through teleconference technology facilities; and
c. the attendance of each member at each meeting.
Number of Deviations (Internal Fraud)
Deviations (internal fraud) are fraud committed by members of the Board of Directors, members of the Board of Commissioners, members of the DPS, permanent employees, non-permanent employees (casual), and/or outsourced labor. The definition of fraud is in accordance with the Financial Services Authority Regulation regarding the implementation of anti-fraud strategy for financial service institutions. The nominal deviation (internal fraud) disclosed is deviations valued at more than Rp100,000,000.00 (one hundred million rupiah). Disclosure regarding deviations (internal fraud) is as set forth in Appendix V, which is an integral part of this Financial Services Authority Circular.
Legal Issues
a. Legal issues are civil legal problems and criminal legal problems faced by the Bank during the reporting year period and have been submitted through the legal process. b. Disclosure regarding legal issues at least covers:

the number of civil and criminal problems faced and have received a final and binding decision; and
the number of civil and criminal problems faced and are still in the process of resolution, as set forth in Appendix V, which is an integral part of this Financial Services Authority Circular.

Transactions Containing Conflicts of Interest
Disclosure regarding transactions containing conflicts of interest, at least covers the name and position of the party having a conflict of interest, the name and position of the decision-maker for the transaction containing a conflict of interest, the type of transaction, the value of the transaction, and notes, as set forth in Appendix V, which is an integral part of this Financial Services Authority Circular.
Share and/or Bond Buy Back of the Bank
a. Share or bond buy back of the Bank is an effort to reduce the number of shares or bonds issued by the Bank by buying back the shares or bonds with payment procedures implemented in accordance with statutory regulations. b. Disclosure of share or bond buy back of the Bank at least covers:

policy in conducting share or bond buy back of the Bank;
number of share and/or bond certificates bought back;
buy back price per share and/or bond certificate; and
increase in earnings per share and/or bond.

Provision of Funds for Social and/or Political Activities During the Reporting Period.
Disclosure regarding the provision of funds for social activities, including in the framework of implementing sustainable finance and/or political activities, at least covers the recipient of the funds and the amount of funds provided.

https://jdih.ojk.go.id/

This copy is in accordance with the original
Director of Legal Development
Legal Department signed
Aat Windradi

XXIV. CLOSING

At the time this Financial Services Authority Circular takes effect:
a. Financial Services Authority Circular Number 13/SEOJK.03/2017 regarding the Implementation of Governance for General Banks; b. Bank Indonesia Circular No. 12/13/DPbS regarding the Implementation of Good Corporate Governance for Sharia Commercial Banks and Sharia Business Units; and
c. Appendix II of Financial Services Authority Circular Number 10/SEOJK.03/2014 regarding the Assessment of the Health Level of Sharia Commercial Banks and Sharia Business Units,
are revoked and declared invalid.
The provisions in this Financial Services Authority Circular take effect on the date of determination.

Determined in Jakarta on June 24, 2025
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
DIAN EDIANA RAE signed https://jdih.ojk.go.id/

APPENDIX I
FINANCIAL SERVICES AUTHORITY CIRCULAR
REPUBLIC OF INDONESIA
NUMBER 14/SEOJK.03/2025
REGARDING
GOVERNANCE IMPLEMENTATION FOR GENERAL BANKS

INDEPENDENCE STATEMENT FORM
(applicable to the President Director, Directors overseeing the compliance function, Independent Commissioners, Independent Parties, or other parties whose independence is required based on Financial Services Authority regulations) PT BANK ………………………………. I, the undersigned:
Name :
Place/date of birth :
Domicile address (copy of ID card/Driver's license attached) :
Home phone number :
Position :
Company name :
Company phone number :
Hereby declare that I:

Do not have financial, managerial, ownership, and/or family relationships with members of the Board of Directors, members of the Board of Commissioners, and/or controlling shareholders or relationships with the Bank, which can influence my ability to act independently as regulated in the Financial Services Authority Regulation regarding the implementation of governance for general banks.
Do not hold dual positions in accordance with Article 15/Article 46 *) of the Financial Services Authority Regulation regarding the implementation of governance for general banks.
Have not had relationships with the Bank during the last 1 (one) year/6 (six) months *) that can influence my ability to act independently.
If it is later found that I have relationships as referred to in number 1 and dual positions as referred to in number 2, I am willing to resign from my position as President Director, Director overseeing the compliance function, Independent Commissioner, Independent Party*) and am willing to be replaced.
Thus, this is my independence statement, which I have made truthfully.
Jakarta, …………………….
Acknowledged: Stamp Duty
Full Name
Position - PT Bank ….
Full Name
*) strike out what is not needed.

This copy is in accordance with the original
Director of Legal Development
Legal Department signed
Aat Windradi

Determined in Jakarta on June 24, 2025
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
DIAN EDIANA RAE signed

APPENDIX II
FINANCIAL SERVICES AUTHORITY CIRCULAR
REPUBLIC OF INDONESIA
NUMBER 14/SEOJK.03/2025
REGARDING
GOVERNANCE IMPLEMENTATION FOR GENERAL BANKS

This copy is consistent with the original
Director of Legal Development
Legal Department signed
Aat Windradi
CORPORATE GOVERNANCE FACTOR RATING MATRIX
RATING DEFINITION
1 Reflects that the Bank's management has implemented corporate governance that is generally very good. This is reflected in the very adequate fulfillment of corporate governance principles. In the event there are weaknesses in the implementation of corporate governance principles, generally such weaknesses are not significant and can be immediately improved by the Bank's management. 2 Reflects that the Bank's management has implemented corporate governance that is generally good. This is reflected in the adequate fulfillment of corporate governance principles. In the event there are weaknesses in the implementation of corporate governance principles, generally such weaknesses are less significant and can be resolved with normal actions by the Bank's management. 3 Reflects that the Bank's management has implemented corporate governance that is generally fairly good. This is reflected in the fairly adequate fulfillment of corporate governance principles. In the event there are weaknesses in the implementation of corporate governance principles, generally such weaknesses are fairly significant and require fairly close attention from the Bank's management. 4 Reflects that the Bank's management has implemented corporate governance that is generally less good. This is reflected in the less adequate fulfillment of corporate governance principles. There are weaknesses in the implementation of corporate governance principles that are generally significant and require comprehensive improvement by the Bank's management. 5 Reflects that the Bank's management has implemented corporate governance that is generally not good. This is reflected in the inadequate fulfillment of corporate governance principles. There are weaknesses in the implementation of corporate governance principles that are generally very significant and difficult to be fixed by the Bank's management. Determined in Jakarta on the date of June 24, 2025 CHIEF EXECUTIVE OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, DIAN EDIANA RAE signed

APPENDIX III
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 14/SEOJK.03/2025 CONCERNING THE IMPLEMENTATION OF CORPORATE GOVERNANCE FOR COMMERCIAL BANKS

SELF-ASSESSMENT WORK PAPER
ON THE IMPLEMENTATION OF CORPORATE GOVERNANCE
Assessment of the implementation of Good Corporate Governance is conducted by evaluating 3 (three) governance aspects, namely governance structure, governance process, and governance outcome, with the following objectives:

The assessment of governance structure aims to evaluate the adequacy of the Bank's corporate governance structure and infrastructure so that the implementation process of Good Corporate Governance principles produces outcomes that align with the expectations of the Bank's Stakeholders. Included in the Bank's corporate governance structure are the Board of Directors, Board of Commissioners, committees, and work units within the Bank. Included in the Bank's corporate governance infrastructure, among others, are the Bank's policies and procedures, management information systems, and the main duties and functions of each organizational structure.
The assessment of the governance process aims to evaluate the effectiveness of the implementation process of Good Corporate Governance principles supported by the adequacy of the Bank's corporate governance structure and infrastructure, thereby producing outcomes that align with the expectations of the Bank's Stakeholders.
The assessment of the implementation of corporate governance outcomes aims to evaluate the quality of outcomes that meet the expectations of the Bank's Stakeholders, which are the results of the implementation process of Good Corporate Governance principles supported by the adequacy of the Bank's corporate governance structure and infrastructure.
Included in the outcomes are qualitative and quantitative aspects, among others:
a. adequacy of report transparency; b. compliance with statutory regulations;
c. consumer protection;
d. objectivity in conducting assessments or audits; e. Bank performance such as profitability, efficiency, and capitalization; and/or f. increase or decrease in compliance with regulations, compliance with Sharia Principles for Islamic Commercial Banks (BUS) and Islamic Business Units (BUK) that have Sharia Business Units (UUS), and resolution of problems faced by the Bank such as fraud, violations of BMPK/BMPD, and violations of regulations related to bank reporting to the Financial Services Authority.

No Criteria/Indicator Analysis

Implementation of duties, responsibilities, and authority of the Board of Directors
a. Governance Structure (Governance Structure)

The number of Board of Directors members is at least 3 (three) persons.
All Board of Directors members reside in Indonesia.
The majority of Board of Directors members have at least 5 (five) years of experience in the operational field as Executive Officials of the Bank.
The Bank has policies regarding:
a) the term of office of the Board of Directors, b) the division of tasks for directors along with the mechanism for their successors, and c) criteria, mechanisms, and procedures for the appointment, replacement, dismissal, and/or resignation of Board of Directors members.
Board of Directors members have met the concurrent position regulations as regulated in the POJK on Corporate Governance of Commercial Banks.
Board of Directors members, individually or collectively, do not hold shares amounting to 25% (twenty-five percent) or more of the paid-up capital in another company.
The majority of Board of Directors members do not have family relationships up to the second degree with other Board of Directors members and/or with Board of Commissioners members.
The Board of Directors has working guidelines and house rules that include regulations on:
a) the organization of the Bank and the division of tasks for the Board of Directors; b) the duties, responsibilities, and authority of the Board of Directors; c) the regulation of authority and decision-making procedures; d) the regulation of the Board of Directors' work ethics; e) the regulation of Board of Directors meetings; f) prohibitions for the Board of Directors; g) the evaluation of the Board of Directors' performance; and h) the working relationship pattern between the Board of Directors and the Board of Commissioners.
The Board of Directors does not use individual advisors and/or professional services as experts or consultants unless for projects that are special, are based on clear contracts covering the scope of work, responsibilities, duration of work, and costs, and the consultant is an Independent Party with qualifications to handle special projects.
All Board of Directors members have adequate integrity, competence, and financial reputation.
The President Director or Chief Director originates from a party independent from controlling shareholders, meaning they do not have financial relationships, management relationships, ownership relationships, and family relationships.
All Board of Directors members have been approved as the Bank's main parties based on the Financial Services Authority's assessment of capability and propriety.
Board of Directors members have adequate and relevant competence for their positions to carry out duties and responsibilities and are able to implement the competencies possessed in the execution of duties and responsibilities.
Board of Directors members have the willingness and ability regarding knowledge of banking and recent developments related to the financial field or other fields that support the execution of their duties and responsibilities.
The Board of Directors has committee devices, namely the risk management committee, credit or financing policy committee, credit or financing committee, and information technology steering committee as regulated in Financial Services Authority Regulations that support the execution of the Board of Directors' role and functions.
For Islamic Commercial Banks (BUS) and Islamic Business Units (BUK) that have Sharia Business Units (UUS):
The majority of Board of Directors members do not have family relationships up to the second degree with Sharia Supervisory Board (DPS) members.
The Board of Directors has working guidelines and house rules that consider, among others, the working relationship pattern with the DPS.
b. Governance Process (Governance Process)
The dismissal and/or replacement of Board of Directors members is carried out based on the Bank's primary interests in accordance with the POJK on Corporate Governance of Commercial Banks.
The dismissal and/or replacement of the Chief Director and/or directors who oversee the compliance function, carried out before the end of the term of office, is implemented in accordance with the POJK on Corporate Governance of Commercial Banks.
The replacement and/or appointment of Board of Directors members has considered the recommendations of the nomination committee or remuneration and nomination committee, and has obtained approval from the General Meeting of Shareholders (GMS).
Concurrent positions of directors in certain positions as determined in the POJK on Corporate Governance of Commercial Banks have obtained approval from the Board of Commissioners meeting or have been reported in the Board of Commissioners meeting.
Board of Directors members do not grant general power of attorney to other parties that results in the transfer of duties and functions of the Board of Directors.
The Board of Directors is fully responsible for the implementation of the Bank's management.
The Board of Directors manages the Bank according to the authority and responsibilities as regulated in the articles of association and statutory regulations.
The Board of Directors carries out duties and responsibilities independently from shareholders.
The Board of Directors applies Good Corporate Governance principles in every business activity of the Bank at all levels or organizational tiers.
Board of Directors members cultivate continuous learning to increase knowledge about banking and recent developments related to the financial field or other fields that support the execution of duties and responsibilities at all levels or organizational tiers.
The Board of Directors follows up on audit findings and recommendations from the Internal Audit Unit (SKAI), external auditors, and the results of supervision by the Financial Services Authority and/or the results of supervision by other authorities.
The Board of Directors provides complete, accurate, up-to-date, and timely data and information to the Board of Commissioners.
Decision-making in Board of Directors meetings has been carried out based on deliberation for consensus or majority vote in the event that deliberation for consensus does not occur.
Decision-making in Board of Directors meetings has been in accordance with applicable policies, guidelines, and house rules.
The Board of Directors establishes strategic policies and decisions through the Board of Directors meeting mechanism.
The Board of Directors does not utilize the Bank for personal, family, and/or other parties' interests that can harm or reduce the Bank's profits.
The Board of Directors does not take and/or receive personal benefits from the Bank other than remuneration and other facilities determined by the General Meeting of Shareholders (GMS).
The Board of Directors appoints committee members, based on the decision of the Board of Commissioners meeting.
For Islamic Commercial Banks (BUS) and Islamic Business Units (BUK) that have Sharia Business Units (UUS):
The Board of Directors applies Sharia Governance in every business activity of the BUS and UUS at all levels or organizational tiers.
The Board of Directors follows up on audit findings or examinations and recommendations from the DPS, the Bank's SKAI, external auditors, the results of supervision by the Financial Services Authority, and/or the results of supervision by other authorities and/or institutions, regarding the implementation of Sharia Principles.
The Board of Directors provides accurate, relevant, and timely data and information to the DPS in the execution of the DPS's duties.
The Board of Directors ensures the availability and adequacy of internal reporting supported by adequate management information systems to support the process of executing the DPS's duties.
The Board of Directors provides adequate facilities and infrastructure to support the process of executing the DPS's duties.
The Board of Directors attends DPS meetings together with the Board of Directors at least 1 (one) time in 4 (four) months.
c. Implementation of Corporate Governance Outcomes (Governance Outcome)
The Bank's GMS is carried out with good preparation and meets regulations as regulated in the POJK on Corporate Governance of Commercial Banks and other Financial Services Authority Regulations.
The Board of Directors has accounted for the implementation of their duties to shareholders through the GMS.
The Board of Directors' accountability for the implementation of their duties is accepted by shareholders through the GMS.
The Board of Directors has disclosed the Bank's strategic policies in the personnel field to employees through media easily accessible to employees.
The Board of Directors has communicated to employees regarding the Bank's business direction in the context of achieving the Bank's mission and vision.
The results of Board of Directors meetings have been recorded in meeting minutes and documented well, including the clear disclosure of dissenting opinions that occurred in the Board of Directors meetings.
Every decision taken by the Board of Directors can be implemented effectively.
In the corporate governance implementation report, all Board of Directors members have at least disclosed:
a) shareholdings reaching 5% (five percent) located domestically and abroad; b) financial relationships and family relationships with other Board of Directors members, Board of Commissioners members, and/or controlling shareholders of the Bank; c) remuneration and other facilities; d) share options owned by Directors.
Increased knowledge, skills, and abilities of Board of Directors members in managing the Bank, demonstrated among others by improved Bank performance, resolution of problems faced by the Bank, and achievement of results according to the expectations of the Bank's Stakeholders.
Increased knowledge, skills, and abilities of all Bank employees at all levels or organizational tiers, demonstrated among others by improved individual performance according to duties and responsibilities.
Increased culture of continuous learning to increase knowledge about banking and recent developments related to the financial field or other fields that support the execution of duties and responsibilities at all levels or organizational tiers, demonstrated among others by increased participation of Bank employees in banking certification and/or education or training for the purpose of individual quality development.
For Islamic Commercial Banks (BUS) and Islamic Business Units (BUK) that have Sharia Business Units (UUS):
In the corporate governance implementation report, all Board of Directors members have disclosed financial relationships and family relationships up to the second degree with DPS members.

Implementation of duties, responsibilities, and authority of the Board of Commissioners
a. Governance Structure (Governance Structure)

The number of Board of Commissioners members is at least 3 (three) persons and does not exceed the number of Board of Directors members.
At least 1 (one) Board of Commissioners member resides in Indonesia.
The Bank has policies regarding:
a) the term of office of Board of Commissioners members, and b) criteria, mechanisms, and procedures for the appointment, replacement, dismissal, and/or resignation of Board of Commissioners members.
At least 50% (fifty percent) of the number of Board of Commissioners members are Independent Commissioners.
Board of Commissioners members have met the concurrent position regulations as regulated in the POJK on Corporate Governance of Commercial Banks.
Independent Commissioners can concurrently serve as committee chairs for at most 2 (two) committees in the same Bank.
The majority of Board of Commissioners members do not have family relationships up to the second degree with Board of Directors members and/or with other Board of Commissioners members.
The Board of Commissioners has working guidelines and house rules that include regulations on:
a) the duties, responsibilities, and authority of the Board of Commissioners. b) the regulation of authority and decision-making procedures for the Board of Commissioners; c) the regulation of the Board of Commissioners' work ethics; d) the regulation of Board of Commissioners meetings; e) prohibitions for the Board of Commissioners; f) the evaluation of the Board of Commissioners' performance; and g) the working relationship pattern between the Board of Commissioners and the Board of Directors.
All Board of Commissioners members have adequate integrity, competence, and financial reputation.
Independent Commissioners who originate from former Board of Directors members of the Bank or former Executive Officials of the Bank or parties who have relationships with the Bank that can influence the ability to act independently have undergone a cooling-off period of at least 1 (one) year.
Independent Commissioners who originate from former chief directors at the relevant Bank and former Board of Directors members who oversee the supervision function or Executive Officials who perform the supervision function at the relevant Bank have undergone a cooling-off period of at least 6 (six) months with a working period in the relevant position of at least 1 (one) year.
Independent Commissioners who originate from Non-Independent Commissioners after meeting the requirements as Independent Commissioners have undergone a cooling-off period of at least 1 (one) year.
The reappointment of Independent Commissioners after serving for 2 (two) consecutive terms of office has been established in the Board of Commissioners meeting that the relevant person can still act independently, and there is a statement regarding their independence in the GMS in accordance with Article 40 paragraph (2) of the POJK on Corporate Governance of Commercial Banks.
All Independent Commissioners do not have financial relationships, management relationships, ownership relationships, and/or family relationships with other Board of Commissioners members, Board of Directors members and/or controlling shareholders or relationships with the Bank, which can influence the ability to act independently.
All Board of Commissioners members have been approved as the Bank's main parties based on the Financial Services Authority's assessment of capability and propriety.
Board of Commissioners members have adequate and relevant competence for their positions to carry out duties and responsibilities and are able to implement the competencies possessed in the execution of duties and responsibilities.
Board of Commissioners members have the willingness and ability to conduct continuous learning to increase knowledge about banking and recent developments related to the financial field or other fields that support the execution of their duties and responsibilities.
The Board of Commissioners has committee devices, namely the audit committee, risk monitoring committee, and remuneration and nomination committee as regulated in Financial Services Authority regulations that support the execution of the Board of Commissioners' role and functions.
For Islamic Commercial Banks (BUS) and Islamic Business Units (BUK) that have Sharia Business Units (UUS):
The majority of Board of Commissioners members do not have family relationships up to the second degree with Sharia Supervisory Board (DPS) members.
The Board of Commissioners has working guidelines and house rules that consider, among others, the working relationship pattern with the DPS.
b. Governance Process (Governance Process)
The dismissal and/or replacement of Board of Commissioners members is carried out based on the Bank's primary interests in accordance with the POJK on Corporate Governance of Commercial Banks.
The dismissal and/or replacement of Independent Commissioners carried out before the end of the term of office is implemented in accordance with the POJK on Corporate Governance of Commercial Banks.
The replacement and/or appointment of Board of Commissioners members has considered the recommendations of the nomination committee or remuneration and nomination committee, and has obtained approval from the GMS.
Concurrent positions of Board of Commissioners members in certain positions as determined in the POJK on Corporate Governance of Commercial Banks have been reported in the Board of Commissioners meeting.
The Board of Commissioners carries out duties to ensure the implementation of Good Corporate Governance principles in every business activity of the Bank at all levels or organizational tiers.
The Board of Commissioners carries out supervision over the implementation of duties and responsibilities of the Board of Directors periodically and ad hoc, and provides advice to the Board of Directors.
In carrying out supervisory duties, the Board of Commissioners has directed, monitored, and evaluated the implementation of the Bank's strategic policies.
The Board of Commissioners does not get involved in decision-making for the Bank's operational activities, except in the case of providing funds to related parties and other matters determined in the Bank's articles of association and/or statutory regulations in the context of carrying out supervisory functions.
The Board of Commissioners ensures that the Board of Directors has followed up on audit findings and recommendations from the Bank's SKAI, external auditors, the results of supervision by the Financial Services Authority, and/or the results of supervision by other authorities and/or institutions.
The Board of Commissioners notifies the Financial Services Authority within a maximum of 5 (five) working days since the discovery of violations of statutory regulations in the financial and banking fields, and conditions or estimated conditions that can endanger the continuity of the Bank's business.
The Board of Commissioners carries out duties and responsibilities in conducting supervision independently.
The appointment of committee members has been carried out by the Board of Directors based on the decision of the Board of Commissioners meeting.
The Board of Commissioners ensures that the formed committees have carried out their duties effectively.
The Board of Commissioners provides sufficient time to carry out duties and responsibilities optimally.
Board of Commissioners meetings discuss issues according to the meeting agenda and are held periodically, at least 1 (one) time in 2 (two) months, and attended physically at least 2 (two) times in 1 (one) year, or via teleconference technology for Non-Independent Commissioners in the event that Non-Independent Commissioners cannot attend meetings physically.
Joint meetings of the Board of Commissioners and the Board of Directors are held periodically, at least 1 (one) time in 4 (four) months.
Decision-making in Board of Commissioners meetings has been carried out based on deliberation for consensus or majority vote in the event that deliberation for consensus does not occur.
Board of Commissioners members do not utilize the Bank for personal, family, and/or other parties' interests that can harm or reduce the Bank's profits.
Board of Commissioners members do not take and/or receive personal benefits from the Bank other than remuneration and other facilities determined by the GMS.

No Criteria/Indicator Analysis
For BUS and BUK having UUS:
20) The Board of Commissioners ensures that the Board of Directors has followed up on recommendations from the results of the Sharia Supervisory Board (DPS) supervision.
21) The Board of Commissioners attends DPS meetings together with the Board of Commissioners at least 1 (one) time in 4 (four) months.
22) The Board of Commissioners appoints public accountants (AP) and/or public accounting firms (KAP) to conduct external reviews, taking into account the recommendations of the audit committee.
c. Governance Outcome Implementation Results

Board of Commissioners meeting results have been recorded in meeting minutes and documented well, including dissenting opinions that occurred clearly.
Board of Commissioners meeting results have been distributed to all Board of Commissioners members and relevant parties.
Board of Commissioners meeting results are recommendations and/or directives that can be implemented by the General Meeting of Shareholders (GMS) and/or Board of Directors.
In the governance implementation report, Board of Commissioners members have at least disclosed:
a) share ownership reaching 5% (five percent) or more in the relevant Bank as well as in other Banks and companies located domestically and abroad; b) financial relationships and family relationships with Board of Directors members, other Board of Commissioners members, and/or controlling shareholders of the Bank; c) remuneration and other facilities; d) share options owned by the Board of Commissioners.
Enhancement of knowledge, expertise, and abilities of Board of Commissioners members in Bank supervision, demonstrated among others by improved Bank performance, resolution of problems faced by the Bank, and achievement of results according to Stakeholder expectations. Continuous learning culture enhancement to increase knowledge about banking and recent developments related to financial fields or other fields supporting the implementation of duties and responsibilities of Board of Commissioners members.
For BUS and BUK having UUS:
In the governance implementation report, all Board of Commissioners members have disclosed financial relationships and family relationships up to the second degree with DPS members.

Implementation of duties, responsibilities, and authority of DPS
a. Governance Structure

The number of DPS members meets the provisions as regulated in the POJK on Sharia Governance for BUS and UUS.
The Bank has policies regarding:
a) the term of office of DPS members, and b) criteria, mechanisms, and procedures for appointment, replacement, dismissal, and/or resignation of DPS members.
DPS members meet the concurrent position provisions as regulated in the POJK on Sharia Governance for BUS and UUS.
The majority of DPS members do not have family relationships up to the second degree with Board of Directors members, Board of Commissioners members, and/or other DPS members.
DPS has guidelines and rules of procedure that include regulations on:
a) duties, responsibilities, and authority of DPS; b) authority and DPS decision procedures; c) DPS work ethics; d) DPS meetings; e) prohibitions for DPS; f) DPS performance evaluation; and g) DPS working relationship patterns with the Board of Directors and Board of Commissioners.
All DPS members have integrity, competence, and good reputation.
Reappointment of DPS members after serving for 2 (two) consecutive terms of office considers the results of external reviews regarding the implementation of DPS members' duties and includes a statement regarding their independence in the GMS in accordance with Article 14 paragraph (4) of the POJK on Sharia Governance for BUS and UUS.
All DPS members have been approved as Bank key parties based on the fit and proper assessment by the Financial Services Authority (for DPS members nominated after January 1, 2025).
DPS members have adequate and relevant competence for their positions to perform duties and responsibilities and are able to implement the competencies they possess in carrying out their duties and responsibilities.
DPS members have the willingness and ability to learn continuously to increase knowledge about Sharia banking and recent developments related to financial fields or other fields supporting the implementation of their duties and responsibilities.
The Bank has adequate support functions for DPS as regulated in Financial Services Authority provisions supporting the implementation of DPS duties and responsibilities.
b. Governance Process
Dismissal and/or replacement of DPS members is carried out based on the best interests of the Bank in accordance with the POJK on Sharia Governance for BUS and UUS.
Dismissal and/or replacement of DPS conducted before the end of the term of office is carried out in accordance with the POJK on Sharia Governance for BUS and UUS.
Replacement and/or appointment of DPS members considers recommendations from the nomination committee or remuneration and nomination committee, and obtains approval from the GMS.
DPS supervises policies and the course of management by the Board of Directors to ensure compliance with Sharia Principles and is responsible for such supervision, and provides advice to the Board of Directors, including providing Sharia opinions regarding BUS and UUS activities, considering the Sharia Governance framework and Good Governance principles.
In carrying out supervisory duties, DPS has directed, monitored, and evaluated the implementation of Sharia governance, including the application of Sharia risk management, Sharia compliance, and Sharia internal audit in an integrated manner, as well as the Bank's strategic policies that are part of RBB (Risk-Based Supervision).
DPS ensures that the Board of Directors has followed up on audit or examination findings and recommendations from the Bank's Internal Audit Unit (SKAI), external auditors, results of Financial Services Authority supervision, and/or results of supervision by other authorities and/or institutions regarding the application of Sharia Principles.
DPS provides sufficient time to carry out duties and responsibilities optimally.
DPS meetings discuss issues according to the meeting agenda and are held periodically, at least 1 (one) time in 1 (one) month, and attended physically at least 2 (two) times in 1 (one) year.
DPS meetings together with the Board of Directors are held periodically, at least 1 (one) time in 4 (four) months.
DPS meetings together with the Board of Commissioners are held periodically, at least 1 (one) time in 4 (four) months.
DPS meeting decisions are made based on deliberation for consensus or majority vote in case consensus cannot be reached.
DPS members do not utilize the Bank for personal, family, and/or other interests that can harm or reduce the Bank's profits.
DPS members do not take and/or receive personal benefits from the Bank, other than remuneration and other facilities established by the GMS.
In cases where DPS members are not part of a committee, DPS provides opinions regarding the application of Sharia Principles in committee meetings.
c. Governance Outcome Implementation Results
DPS meeting results have been recorded in meeting minutes and documented well, including dissenting opinions that occurred clearly.
DPS meeting results have been distributed to all Board of Directors and followed up according to agreed commitments.
In the governance implementation report, DPS members have at least disclosed:
a) share ownership reaching 5% (five percent) or more, in the relevant Bank and/or other companies; b) financial and/or family relationships up to the second degree with Board of Directors members, Board of Commissioners members, other DPS members, and/or controlling shareholders of the Bank; c) concurrent positions of DPS members; and d) remuneration and other facilities established by the GMS.
Enhancement of knowledge, expertise, and abilities of DPS members in supervising the conformity of BUS or UUS activities with Sharia Principles, demonstrated among others by a decrease in violations or non-compliance with Sharia Principles, and resolution of problems related to violations of Sharia Principles, as well as continuous learning culture enhancement to increase knowledge about Sharia banking and recent developments related to financial fields or other fields supporting the implementation of duties and responsibilities of DPS members.
DPS opinions are submitted within the time limits regulated in the DPS guidelines and rules of procedure.
DPS supervision results reports are submitted to the Financial Services Authority completely, accurately, currently, wholly, and on time as regulated in Financial Services Authority provisions regarding Sharia governance for BUS and UUS.

Completeness and implementation of committee duties
a. Governance Structure

Audit Committee
a) Audit committee members consist of at least one Independent Commissioner, one Independent Party expert in finance or accounting, and one Independent Party expert in law or banking (for BUK) or in Sharia banking (for BUS or BUK having UUS). b) The audit committee is chaired by an Independent Commissioner. c) All audit committee members are independent commissioners and independent parties. d) Audit committee members have good integrity, ethics, and morality.
Risk Monitoring Committee
a) Risk Monitoring Committee members consist of at least one Independent Commissioner, one Independent Party expert in risk management, and one Independent Party expert in finance (for BUK) or in Sharia banking (for BUS or BUK having UUS). b) The Risk Monitoring Committee is chaired by an Independent Commissioner. c) The majority of Risk Monitoring Committee members are Independent Commissioners and Independent Parties. d) Risk Monitoring Committee members have good integrity, ethics, and morality.
Remuneration and Nomination Committee
a) Remuneration and nomination committee members consist of at least:
(1) one Independent Commissioner, one Non-Independent Commissioner, and one Executive Officer who manages human resources or one employee representative; or (2) 2 (two) Independent Commissioners and one Executive Officer who manages human resources or one employee representative, in case the Bank does not have Non-Independent Commissioners. b) Executive Officers or employee representatives on the committee must have knowledge and understand the remuneration and/or nomination systems and the Bank's succession plan. c) The Remuneration and Nomination Committee is chaired by an Independent Commissioner. d) In case the number of Remuneration and Nomination Committee members established is more than 3 (three) people, Independent Commissioner members must be at least 2 (two) people. e) In case the Bank establishes these committees separately:
(1) Executive Officers or employee representatives on the remuneration committee must have knowledge of the Bank's remuneration system; and (2) Executive Officers or employee representatives on the nomination committee must have knowledge of the nomination system and the Bank's succession plan.
Audit committee, Risk Monitoring Committee, and Remuneration and Nomination Committee members from Independent Parties carry out duties, responsibilities, and authority with integrity, independence, competence, and maintain reputation.
Audit committee, Risk Monitoring Committee, and Remuneration and Nomination Committee members are not members of the same Bank's Board of Directors nor other Banks' Boards of Directors.
Concurrent positions of Independent Party committee members on the same Bank, other Banks, and/or other companies consider competence, independence criteria, confidentiality, code of ethics, and the implementation of duties and responsibilities.
All Independent Party committee members do not have financial, managerial, ownership, and/or family relationships with the Board of Directors, Board of Commissioners, and/or controlling shareholders or relationships with the Bank, which could affect the ability to act independently.
All Independent Party members who are former Board of Directors members or former Executive Officers from the relevant Bank and do not perform supervisory functions or other parties having relationships with the Bank that could affect the ability to act independently have undergone a cooling-off period of at least 6 (six) months.
The Bank has guidelines and rules of procedure for each committee, including the implementation of periodic evaluations of committee performance.
Audit committee and Risk Monitoring Committee meetings are attended by at least a majority of the number of members including Independent Commissioners and Independent Parties.
Remuneration and Nomination Committee meetings are attended by at least a majority of the number of members including one Independent Commissioner and an Executive Officer managing HR functions or employee representatives.
For BUS and BUK having UUS:
There are DPS members as members of committees supporting the implementation of Board of Commissioners duties.
b. Governance Process
Audit Committee
To provide recommendations to the Board of Commissioners:
a) The audit committee monitors and evaluates audit planning and implementation and monitors follow-up of audit results to assess the adequacy of internal controls, including the adequacy of financial reporting processes. b) The audit committee conducts reviews on:
(1) the implementation of SKAI duties;
(2) the conformity of audit implementation by public accounting firms with audit standards; (3) the conformity of financial reports with accounting standards; and (4) the implementation of follow-up by the Board of Directors on SKAI findings, AP results, and Financial Services Authority supervision results, and/or supervision results by other authorities and/or institutions. c) The audit committee has played a role and carried out duties as regulated in Financial Services Authority Regulations regarding the use of public accountants and public accounting firms in financial services activities, including providing recommendations on proposals for appointment, dismissal, and/or replacement of public accountants and/or public accounting firms and evaluating the implementation of audit services on annual historical financial information by public accountants and/or public accounting firms, and providing recommendations on proposals for the appointment of public accountants and/or public accounting firms to conduct external reviews for BUS and BUK having UUS.
Risk Monitoring Committee
To provide recommendations to the Board of Commissioners:
a) The Risk Monitoring Committee evaluates the conformity between risk management policies and the Bank's implementation of policies. b) The Risk Monitoring Committee monitors and evaluates the implementation of Risk Management Committee and Risk Management Unit (SKMR) duties.
Remuneration and Nomination Committee
To provide recommendations to the Board of Commissioners:
a) The remuneration committee evaluates remuneration policies for:
(1) Board of Directors, Board of Commissioners, and DPS, which have been submitted to the GMS; (2) Executive Officers and employees, which have been submitted to the Board of Directors. b) Regarding nomination policies, the committee has established systems, as well as procedures for the selection and/or replacement of Board of Directors members, Board of Commissioners members, and DPS members to be submitted to the GMS. c) The nomination committee provides recommendations for candidates for Board of Directors members, Board of Commissioners members, and/or DPS members to be submitted to the GMS. d) The nomination committee provides recommendations for candidate Independent Parties who can become committee members to the Board of Commissioners. e) The nomination committee establishes mechanisms and conducts performance evaluations of the Board of Directors, Board of Commissioners, and DPS.
Meeting decisions are taken based on deliberation for consensus or majority vote in case consensus cannot be reached.
Committee meeting results are recommendations that can be utilized optimally by the Board of Commissioners.
For BUS and BUK having UUS:
In case there are support committees for Board of Commissioners duties that do not include DPS members, such support committees for Board of Commissioners duties request DPS opinions on every discussion related to Sharia Principles.
c. Governance Outcome Implementation Results
Preparation of meeting minutes including the disclosure of dissenting opinions clearly and documented well.
Each committee has carried out functions according to provisions.

Handling conflicts of interest
a. Governance Structure

The Bank has policies, systems, and procedures for resolution regarding:
a) conflicts of interest binding every Board of Directors member, Board of Commissioners member, Bank committee member, DPS member, Executive Officers, and Bank employees; b) administration, documentation, and disclosure of such conflicts of interest in meeting minutes.
The Bank has policies and procedures for Bank transactions with parties having special relationships.
b. Governance Process
In case conflicts of interest occur, Board of Directors members, Board of Commissioners members, Bank committee members, DPS members, Executive Officers, and Bank employees do not take actions that can harm or reduce the Bank's profits.
The Bank identifies, reduces, and manages potential conflicts of interest in accordance with internal Bank policies and statutory regulations.
The Bank ensures the implementation of transactions with parties having special relationships in accordance with established policies and procedures.
c. Governance Outcome Implementation Results
Conflicts of interest that can harm the Bank or reduce its profits have been disclosed in every decision and documented well.
The Bank's operational activities are free from interventions by owners or related parties or other parties that can cause conflicts of interest that can harm the Bank or reduce its profits.
The Bank has successfully identified, reduced, and managed conflicts of interest that occurred.
The Bank's transactions with parties having special relationships are conducted fairly (arm’s length principle).

Implementation of compliance functions
a. Governance Structure

The Bank has a director overseeing compliance functions and establishes a compliance unit.
The compliance unit is independent from operational units.
The director overseeing compliance functions meets independence requirements, and has integrity and adequate knowledge of Financial Services Authority provisions and statutory regulations.
The Bank has provided quality human resources in the compliance unit to complete tasks effectively.
For BUS and BUK having UUS:
The Bank has Sharia compliance functions which are separate units or can be part of the compliance unit under Board of Directors members overseeing compliance functions.
The director overseeing compliance functions is responsible for the effectiveness of Sharia compliance function implementation in maintaining compliance with Sharia Principles.
Sharia compliance functions are supported by officials at least at the Executive Officer level who are directly responsible to Board of Directors members overseeing compliance functions.
Executive Officers in Sharia compliance functions have knowledge and/or understanding of Sharia banking operations, including knowledge and/or understanding of DSN MUI fatwas in Sharia banking, to support the implementation of Sharia compliance functions.
b. Governance Process
The director overseeing compliance functions carries out duties and responsibilities in implementing compliance functions on the Bank in accordance with Financial Services Authority Regulations regarding the implementation of compliance functions for commercial banks, including:
a) ensuring the Bank's compliance with Financial Services Authority provisions and statutory regulations, by:
(1) establishing necessary steps considering prudence principles; (2) monitoring and maintaining that the Bank's business activities do not deviate from provisions; (3) monitoring and maintaining the Bank's compliance with all agreements and commitments made by the Bank to the Financial Services Authority and competent authority institutions; b) submitting reports on the implementation of duties and responsibilities at least quarterly to the President Director with copies to the Board of Commissioners or competent parties according to the Bank's organizational structure; c) formulating strategies to encourage the creation of the Bank's compliance culture; d) proposing compliance policies or compliance principles to be established by the Board of Directors; e) establishing systems and procedures for compliance to be used to formulate the Bank's internal regulations and guidelines; f) ensuring that all policies, provisions, systems, procedures, and business activities conducted by the Bank are in accordance with Financial Services Authority provisions and statutory regulations; g) minimizing the Bank's Compliance Risk; h) taking preventive actions so that policies and/or decisions taken by the Bank's Board of Directors or KCBLN management do not deviate from Financial Services Authority provisions and statutory regulations; i) carrying out other tasks related to compliance functions.
Procedures for the appointment, dismissal, and/or resignation of the director overseeing compliance functions are in accordance with Financial Services Authority provisions.
Temporary replacement of the director overseeing compliance functions has been in accordance with provisions.
Board of Directors members:
a) approve the Bank's compliance policies in the form of formal documents on effective compliance functions;

No Kriteria/Indikator Analisis b) responsible for communicating all policies, guidelines, systems, and procedures to all levels of the relevant organization; c) responsible for creating an effective and permanent compliance function as part of the Bank's overall compliance policy.
5) The compliance unit executes tasks and responsibilities including:
a) taking steps to support the creation of a compliance culture in all business activities of the Bank at every level of the organization; b) identifying, measuring, monitoring, and controlling Compliance Risk with reference to the Financial Services Authority Regulation regarding the implementation of risk management for general banks and the Financial Services Authority Regulation regarding the implementation of risk management for Sharia commercial banks and Sharia business units; c) assessing and evaluating the effectiveness, adequacy, and alignment of the Bank's policies, regulations, systems, and procedures with applicable laws and regulations; d) conducting reviews and/or recommending revisions and improvements to the Bank's policies, regulations, systems, and procedures to align with Financial Services Authority regulations and applicable laws and regulations; e) taking efforts to ensure that the Bank's policies, regulations, systems, procedures, and business activities are in accordance with Financial Services Authority regulations and applicable laws and regulations; f) performing other tasks related to the compliance function.
6) The Board of Commissioners conducts active supervision of the compliance function.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
7) The Sharia compliance function coordinates with the Sharia Supervisory Board (DPS) in carrying out tasks and responsibilities.
8) The Sharia compliance function has tasks and responsibilities including:
a) conducting reviews and providing input on the application of Sharia Principles regarding the effectiveness, adequacy, and alignment of policies, regulations, systems, and procedures for the development of new products and business activities, including profit-sharing policies, Sharia accounting treatment, zakat calculation, and the use of funds that cannot be recognized as income; b) recommending revisions and improvements to the Bank's policies, regulations, systems, and procedures to align with Sharia Principles; c) reviewing documents (including promotional and marketing materials, whether for the Bank's own products or in cooperation with Bank partners) and business transactions, either initiated independently or upon request from the DPS, Board of Commissioners, or Board of Directors; d) identifying, measuring, monitoring, and controlling Sharia compliance risk with reference to the Financial Services Authority Regulation regarding the implementation of risk management for Sharia commercial banks and Sharia business units; e) developing a sustainable Sharia compliance program in accordance with a structured plan; and f) performing other tasks related to the Sharia compliance function. For example, ensuring the Bank's compliance with commitments made by the Bank to the Financial Services Authority and/or other competent supervisory authorities.
c. Governance Outcome

The Bank has submitted the main report on the implementation of duties of the director overseeing the compliance function and special reports to the Financial Services Authority.
The scope of the report on the implementation of duties of the director overseeing the compliance function is in accordance with Financial Services Authority regulations.
There are no violations of applicable laws and regulations.
The Bank has successfully built a compliance culture in decision-making and in the Bank's operational activities.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
The DPS receives copies of the results of the Sharia compliance function's implementation submitted to the Director overseeing the compliance function.

Implementation of Internal Audit Function
a. Governance Structure

The Bank's Internal Audit Unit (SKAI) organizational structure is in accordance with regulations.
The Bank has Internal Audit Function Standards (SPFAIB), including:
a) drafting an Internal Audit Charter; b) establishing an SKAI; and c) drafting internal audit guidelines.
The SKAI institution is independent from operational units.
The Bank provides qualified human resources for the SKAI to complete tasks effectively, with a composition appropriate to the complexity of the business activities owned.
The Head of SKAI has adequate competence and ability to lead the independent and objective internal audit function.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
The Bank has a Sharia internal audit function which is a separate unit or can be part of the SKAI under a Director overseeing the internal audit function.
The Director overseeing the internal audit function is responsible for the effectiveness of the Sharia internal audit function in ensuring compliance with Sharia Principles.
The Sharia internal audit function is supported by officials at least at the Executive level who are directly responsible to the Director overseeing the internal audit function.
Executive officials in the internal audit function have knowledge and/or understanding of Sharia banking operations, including knowledge and/or understanding of DSN MUI fatwas in the field of Sharia banking, in order to support the implementation of the Sharia internal audit function.
b. Governance Process
The Board of Directors is responsible for:
a) creating an internal control structure, and ensuring the implementation of the Bank's internal audit function at every level of management; and b) following up on internal audit findings in accordance with policies and directives of the Board of Commissioners.
The Bank implements the internal audit function effectively across all aspects and elements of activities that are directly estimated to affect the interests of the Bank and the public.
The Bank communicates with the Financial Services Authority at least 1 (one) time every

No Kriteria/Indikator Analisis year regarding the implementation of the internal audit function with a scope in accordance with regulations.
4) The Bank's SKAI examination plan, adequacy of the examination scope, and depth of examination are adequate.
5) The SKAI examination plan is effectively realized.
6) The Bank plans and realizes the periodic and continuous improvement of human resource skills.
7) The SKAI performs independent supervision with adequate task scope and in accordance with the plan, executes and monitors audit results, makes analysis, assessment, and evaluation of other activities through audit, improves and increases the efficiency of the use of human resources and funds, and provides objective improvement suggestions and information at all levels of management.
8) The SKAI implements activities covering the examination and evaluation of Bank activities in accordance with the Financial Services Authority Regulation regarding the implementation of the internal audit function in Banks, including regarding:
a) the effectiveness, efficiency, and adequacy of the Bank's internal control system; b) the reliability, effectiveness, and integrity of information management processes and systems; c) compliance with applicable laws and regulations, including compliance with Sharia Principles for BUS and BUK that have UUS; and d) organizational performance quality.
9) The SKAI reports all examination findings in accordance with regulations.
10) The SKAI monitors, analyzes, and reports on the development of follow-up improvements made by the auditee.
11) The SKAI compiles and updates work guidelines, systems, and procedures to execute tasks for internal auditors periodically in accordance with applicable laws and regulations.
12) The Bank periodically reviews the effectiveness of the SKAI's work implementation and compliance with SPFAIB by external parties every 3 (three) years.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
13) The Sharia internal audit function coordinates with the DPS in carrying out tasks and responsibilities.
14) The Sharia internal audit function has tasks and responsibilities including:

No Kriteria/Indikator Analisis a) compiling and establishing clearly documented audit plans to guide Sharia internal auditors in collecting information, audit procedures, and audit assessments, in consultation with the DPS and considering audit committee recommendations; b) conducting structured and systematic Sharia internal audit activities in coordination with the DPS and audit committee; c) making analysis and assessments regarding compliance with Sharia Principles in finance, accounting, operations, and other activities through Sharia internal audit; d) providing objective improvement suggestions and information about examined activities at all levels of management regarding compliance with Sharia Principles; e) communicating Sharia internal audit results to the DPS and Board of Directors, detailing Sharia internal audit findings and recommendations for improvement actions, as well as auditee responses and action plans; f) submitting Sharia internal audit results reports regarding the implementation of Sharia Principles compliance to the DPS, the director overseeing the internal audit function, and the Board of Commissioners; and g) monitoring improvement actions and reporting monitoring results of follow-up improvements on Sharia internal audit findings to the DPS, Board of Directors, and Board of Commissioners, with copies to the audit committee and the director overseeing the compliance function.
c. Governance Outcome

SKAI examination findings have been followed up and no recurring findings have occurred.
The internal audit function has been implemented adequately, considering among others:
a) audit programs have covered all work units, with implementation considering the risk level of each work unit; b) audit programs and audit scope are adequate in accordance with SPFAIB principles, including the fulfillment of independence, objectivity, and no restrictions in the scope and scope of internal audit; and

No Kriteria/Indikator Analisis c) the fulfillment of the number and quality of internal auditors.
3) The Bank has followed up on Financial Services Authority recommendations to improve the effectiveness and efficiency of the internal audit function implementation.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
4) The DPS receives copies of the results of the Sharia internal audit function's implementation submitted to the Director overseeing the internal audit function.
8. Implementation of External Audit Function
a. Governance Structure

The assignment of audits to public accountants and public accounting firms must at least meet the aspects:
a) the capacity of the designated public accounting firm; b) the legality of the employment agreement; c) the scope of the audit; d) the professional standards of public accountants and auditor service standards; and e) the communication of public accountants with the Financial Services Authority.
Public accountant independence statement.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
Assignments to public accountants and/or public accounting firms regarding external reviews of Sharia governance implementation must meet the aspects of the legality of the employment agreement, scope of review, professional standards of public accountants, target time for completion of review, and consider the adequacy of the capacity of the public accounting firm (including public accountants).
b. Governance Process
In the implementation of the Bank's financial statement audit, the Bank uses public accountants and/or public accounting firms registered with the Financial Services Authority, listed in the list of active public accountants and/or public accounting firms at the Financial Services Authority, and have competence appropriate to the complexity of the Bank's business.
The appointment of the same public accountant and/or public accounting firm by the Bank is in accordance with applicable laws and regulations.
The appointment of public accountants and/or public accounting firms must first obtain approval from the General Meeting of Shareholders (RUPS) based on recommendations from the audit committee through the Board of Commissioners.
The designated public accountants and/or public accounting firms are able to work and implement audits independently, meet the professional standards of public accountants and employment agreements, and meet the scope of audit established.
Public accountants have communicated with the Financial Services Authority regarding the condition of the audited Bank in the preparation and implementation of the audit.
The Bank limits the use of audit services for historical financial information from the same public accountant in accordance with the Financial Services Authority Regulation regarding the use of public accountants and/or public accounting firms in financial services activities.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
The Bank conducts external reviews of Sharia governance implementation.
In the implementation of external reviews of Sharia governance implementation, the Bank appoints public accountants and/or public accounting firms registered with the Financial Services Authority in accordance with regulations regarding Sharia governance for Sharia commercial banks and Sharia business units.
c. Governance Outcome
The Bank has submitted audit results reports and management letters to the Financial Services Authority.
Audit results and management letters have accurately described material information regarding the Bank's condition and were submitted on time to the Financial Services Authority by the designated public accounting firm.
The scope of audit results is at least in accordance with the scope of audit in accordance with applicable laws and regulations.
The Bank has followed up on recommendations from external audit results.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
The Bank submits reports on the results of external reviews of Sharia governance implementation to the Financial Services Authority in accordance with Financial Services Authority regulations regarding Sharia governance for Sharia commercial banks and Sharia business units.

Implementation of Risk Management including Internal Control Systems
a. Governance Structure

The Bank has an adequate organizational structure to support the implementation of good risk management and internal control, including SKAI, SKMR (Risk Management Unit), risk management committees, and compliance units.
The Bank has adequate policies and procedures for risk management and the establishment of risk limits, including those related to country risk and transfer risk.

No Kriteria/Indikator Analisis
3) The Bank has policies and procedures to identify and manage non-performing assets, asset classification, calculations related to provisions and reserves, and asset write-offs.
4) The Bank has policies, procedures, and/or systems for the implementation of integrated governance, risk management, and compliance.
5) The Bank has an early warning system for risks.
For Sharia Commercial Banks (BUS) and Sharia Foreign Bank Branches (BUK) that have Sharia Business Units (UUS):
6) The Bank has a Sharia risk management function which is a separate unit or can be part of the risk management unit under a Director overseeing the risk management function.
7) The Director overseeing the risk management function is responsible for the effectiveness of the Sharia risk management function in ensuring compliance with Sharia Principles.
8) The Sharia risk management function is supported by officials at least at the Executive level who are directly responsible to the Director overseeing the risk management function.
9) Executive officials in the Sharia risk management function have knowledge and/or understanding of Sharia banking operations, including knowledge and/or understanding of DSN MUI fatwas in the field of Sharia banking, in order to support the implementation of the Sharia risk management function.
b. Governance Process

The Bank implements appropriate and effective risk management and internal control systems, and conducts periodic evaluations of risk management implementation.
The Bank implements integrated governance, risk management, and compliance in decision-making processes in accordance with internal Bank policies and applicable laws and regulations.
The Board of Directors executes tasks and responsibilities, including:
a) formulating risk management policies including strategies and risk management frameworks in writing and comprehensively, including the establishment of overall risk limits and per risk type, considering the level of risk taken and risk tolerance regarding capital adequacy. After receiving approval from the Board of Commissioners, the Board of Directors establishes the aforementioned policies, strategies, and risk management frameworks; b) formulating, establishing, and updating procedures and tools to identify, measure, monitor, and control risks; c) formulating and establishing transaction approval mechanisms, including those exceeding limits and authority for each job level; d) evaluating and/or updating risk management policies, strategies, and frameworks at least 1 (one) time in 1 (one) year or more frequently in the event of changes in factors affecting the Bank's business activities, risk exposures, and/or risk profiles significantly; e) establishing organizational structures including clear authorities and responsibilities at each job level related to the implementation of risk management; f) being responsible for the implementation of risk management policies, strategies, and frameworks approved by the Board of Commissioners, and evaluating and providing directives based on reports submitted by SKMR, including reports on risk profiles; g) ensuring that all material risks and their impacts have been followed up and submitting accountability reports to the Board of Commissioners periodically. The aforementioned reports include reports on developments and issues related to material risks, along with improvement steps that have been, are being, and will be taken; h) ensuring the implementation of improvement steps for problems or deviations in the Bank's business activities found by SKAI; i) developing a risk management culture, including risk awareness at all levels of the organization, including adequate communication to all levels of the organization about the importance of effective internal controls; j) ensuring adequate financial and infrastructure support to manage and control risks;

No Kriteria/Indikator Analisis k) ensuring that the risk management function is implemented independently, reflected by the separation of functions between SKMR which identifies, measures, monitors, and controls risks, and units that conduct and complete transactions.
4) The Board of Commissioners has clear tasks and responsibilities, including:
a) approving risk management policies including strategies and risk management frameworks established in accordance with the level of risk taken (risk appetite) and risk tolerance (risk tolerance); b) evaluating risk management policies and risk management strategies at least 1 (one) time in 1 (one) year or more frequently in the event of changes in factors significantly affecting the Bank's business activities; and c) evaluating the Board of Directors' accountability and providing improvement directives regarding the implementation of risk management policies periodically. Evaluations are conducted to ensure that the Board of Directors manages Bank activities and risks effectively.
5) The Bank has implemented comprehensive and reliable internal control systems.
6) To support the APU, PPT, and PPPSPM programs, the Bank prevents and handles business activities so that they are not utilized in activities related to criminal acts, including:
a) evaluating the alignment of APU, PPT, and PPPSPM policies and procedures with changes and developments including products, services, and technology in the financial services sector, activities, business scale, business complexity, business characteristics, financial services provider transaction volumes, and/or money laundering, terrorism financing, and proliferation financing weapons of mass destruction modus operandi; b) evaluating the results of customer transaction monitoring and analysis to ensure the presence or absence of suspicious financial transactions, cash financial transactions, and/or financial transactions transferring funds from and to abroad; c) identifying high-risk areas related to the implementation of APU, PPT, and PPPSPM programs with reference to applicable laws and regulations and adequate information sources; d) providing training on the implementation of APU, PPT, and PPPSPM programs for officials and/or financial services providers; e) having systems that can effectively identify, analyze, monitor, and provide reports on customer profiles, characteristics, or transaction pattern habits.
7) The Board of Commissioners and Board of Directors have ensured that risk management implementation covers country risk and transfer risk.
8) In the implementation of risk management related to country risk and transfer risk, the Board of Directors:
a) formulates and establishes strategies for managing country risk and transfer risk in accordance with the Bank's characteristics and complexity; b) establishes risk limits and monitors compliance with country risk and transfer risk exposure limits; c) formulates, establishes, and ensures the implementation of policies and procedures to identify, measure, monitor, and control risks related to country risk and transfer risk in bank business activities; d) monitors the development of country risk and transfer risk, and implements adequate follow-up; e) controls credit risk against country risk and transfer risk exposures for each country, including intragroup exposures, exposures based on specific regions, exposures based on individuals, and exposures based on counterparties; f) has and develops management information systems for country risk and transfer risk capable of providing accurate, complete, informative, timely, and reliable data so that adequate reports can be provided; g) conducts periodic evaluations and testing (stress testing) at least 1 (one) time in 1 (one) year or

No Kriteria/Indikator Analisis more frequently in the event of changes in factors significantly affecting the Bank's business activities, risk exposures, and/or risk profiles;

No Criteria/Indicator Analysis based on certain conditions that will significantly affect the Bank; and h) ensuring adequate internal control and review of country risk and transfer risk.
9) In the implementation of risk management related
to country risk and transfer risk, the Board of Commissioners:
a) evaluates the strategies and policies related to country risk and transfer risk established by the Board of Directors; and b) evaluates the accountability of the Board of Directors and provides improvement guidance on the implementation of policies related to country risk and transfer risk on a periodic basis.
10) The Board of Directors performs at least:
a) formulating policies and procedures for identifying and managing non-performing assets, asset classification, calculations related to provisions and reserves, and write-off of assets; b) conducting periodic reviews of asset classification and reserves for non-performing loans and/or financing, as well as identifying and managing non-performing assets adequately, including reserves that align with the risks incurred; and c) conducting periodic reviews of the reserves formed to ensure they are in line with current conditions, in accordance with standards and regulatory provisions.
11) The Bank implements integrated governance, risk
management, and compliance, supported by digitalization, technological innovation, as well as the necessary systems and procedures.
12) The Board of Commissioners actively supervises the implementation of
non-performing asset management, provisions, and reserves conducted by the Bank in credit risk management.
13) Banks engaging in partnerships in business activities implement partnerships in accordance
with prudential principles, risk management, and healthy Bank management.
For BUS and BUK that have UUS:
14) The Sharia risk management function coordinates
with the DPS in carrying out tasks and responsibilities.
15) The Sharia risk management function has tasks
and responsibilities including:
a) monitoring the implementation of the risk management strategy approved by

No Criteria/Indicator Analysis the Board of Directors, particularly risks related to the fulfillment of Sharia Principles; b) identifying, measuring, monitoring, and reporting risk exposures related to the fulfillment of Sharia Principles in operations, business, and all Sharia banking activities; c) integrating risk considerations related to the fulfillment of Sharia Principles with risk management in the bank; d) establishing risk mitigation steps related to the fulfillment of Sharia Principles; e) periodic review of the risk management process related to the fulfillment of Sharia Principles; and f) studying new product proposals, particularly in terms of risk management related to the fulfillment of Sharia Principles.
c. Governance Outcome

The Bank implements risk management effectively, which is adjusted to the objectives,
policies, size, and complexity of business as well as the Bank's capabilities.
The Board of Directors and Board of Commissioners are able
to actively supervise the implementation of risk management policies and strategies, including those related to country risk and transfer risk as well as non-performing asset management, provisions, and reserves in credit risk management.
The Bank does not engage in business activities
that exceed its capital capacity to absorb losses.
Decision-making in the implementation of the Bank's business activities is supported
by the implementation of integrated governance, compliance, and risk management.
The Bank implements AML, CFT, and PPPSPM programs in carrying out business activities.
The Bank's risk profile report contains the results
of identification, measurement, monitoring, and control of country risk and transfer risk.
The Board of Commissioners through the Risk Monitoring Committee is able to supervise
the implementation of risk management related to country risk and transfer risk conducted by the Bank, including the implementation of evaluation and testing (stress testing).
For BUS and BUK that have UUS:
The DPS receives copies of the results of the implementation of tasks of the Sharia risk management function
submitted to the Board of Directors that oversees the risk management function.

Remuneration
a. Governance Structure

No Criteria/Indicator Analysis
The Bank has formulated and possesses policies related to remuneration for members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and Bank employees. b. Governance Process

The implementation and monitoring of the implementation
of remuneration policies is carried out by considering at least performance aspects, risk aspects, fairness with peer groups, targets, and the Bank's long-term strategy by applying prudential principles and risk management.
The Board of Directors has formulated remuneration policies
with coverage in accordance with the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for banks and Sharia business units.
The Board of Commissioners has implemented:
a) supervision of the implementation of remuneration policies; and b) periodic evaluation of remuneration policies based on supervision results.
c. Governance Outcome
Remuneration is provided by
considering prudent risk taking so that the Bank's business continuity can be maintained.
The Bank has disclosed information related
to remuneration policies in the Bank's governance report.
Adequate quality of remuneration policy information reports.
The Bank has implemented Good Corporate Governance
in the provision of remuneration.
For BUS and BUK that have UUS:
The remuneration policy for DPS members
considers the risks and complexity of tasks and responsibilities of DPS members as well as considers proportionality against remuneration of the Board of Commissioners.

Provision of funds to related parties and large exposure provision
a. Governance Structure
The Bank has adequate written policies, systems, and procedures for the provision of funds to related parties and large exposure provision, including monitoring and problem resolution. b. Governance Process

The Bank periodically evaluates and
updates the aforementioned policies, systems, and procedures to align with regulatory provisions.
The Bank implements diversification or diversification
of the portfolio of funds provided.

No Criteria/Indicator Analysis
3) There is an adequate process to
ensure that the provision of funds to related parties and large exposure provision have complied with prudential principles.
4) The provision of funds to related
parties has gone through the approval of the Board of Commissioners.
c. Governance Outcome

The Bank's implementation of fund provision to
related parties and/or large exposure provision has met the Financial Services Authority regulations regarding maximum limits for credit provision and large exposure provision for commercial banks and the Financial Services Authority regulations regarding maximum limits for fund disbursement and large exposure provision for Sharia commercial banks, as well as considering prudential principles and regulatory provisions;
Reports on the provision of funds to related
parties have been submitted periodically to the Financial Services Authority on time.

Reporting integrity and information technology systems
a. Governance Structure

The Bank has policies and procedures
for internal control in the financial reporting process.
The Bank has policies and procedures
regarding the procedures for implementing transparency of financial and non-financial conditions.
The Bank formulates governance implementation reports
at the end of each fiscal year with coverage in accordance with the POJK General Commercial Bank Governance.
Complete, accurate, and timely internal reporting is available, supported by
adequate management information systems.
There is a reliable information system supported by competent human resources
and information technology in the form of adequate security systems.
There are information dissemination channels
that are reliable for Stakeholders. b. Governance Process
The Bank has an integrity financial reporting process
to ensure the truthfulness, accuracy, and transparency of the financial information/reports produced.
The Board of Directors, Board of Commissioners, and Audit Committee
carry out tasks and responsibilities to support integrity financial reporting in accordance with regulatory provisions.
The Bank has made financial and non-financial conditions
transparent to Stakeholders, including announcing quarterly published financial reports and reporting to the Financial Services Authority or Stakeholders in accordance with the Financial Services Authority Regulation regarding transparency and publication of Bank financial reports.
The Bank makes Bank product information
transparent in accordance with the Financial Services Authority Regulation regarding the provision of general commercial bank products and uses consumer and/or customer data in accordance with the Financial Services Authority Regulation regarding consumer and community protection in the financial services sector and the Law on personal data protection.
The Bank makes transparent the procedures for customer complaints
and dispute resolution to customers in accordance with the Financial Services Authority Regulation regarding consumer and community protection in the financial services sector and the Financial Services Authority Regulation regarding consumer complaint services in the financial services sector.
The Bank formulates and presents reports
with procedures, types, and coverage in accordance with the Financial Services Authority Regulation regarding transparency and publication of Bank reports.
The Bank formulates and publishes sustainability reports in accordance with the Financial Services Authority Regulation
regarding the implementation of sustainable finance for financial services institutions, issuers, and public companies.
The Bank formulates and submits structured and unstructured reports in accordance with
the Financial Services Authority Regulation regarding reporting of general commercial banks through the Financial Services Authority reporting system.
The Bank has formulated governance implementation reports with content and coverage at least
in accordance with the POJK General Commercial Bank Governance and POJK Sharia Governance for BUS and UUS.
In the event that the governance implementation report does not
match the Bank's actual conditions, the Bank immediately submits a complete revision to the Financial Services Authority, and publishes the aforementioned revision on the Bank's website.
In the event of a difference in the governance factor rating in the results of the self-assessment in the governance implementation report
of the Bank with the results of the governance implementation assessment by the Financial Services Authority, the Bank:
a) revises at least the governance factor rating and the definition of the rating of the self-assessment results to the public through the published financial report in the nearest period; b) immediately submits a complete revision of the Bank's self-assessment results of governance to the Financial Services Authority, and publishes the revision of the self-assessment results on the Bank's website.
In the implementation of information technology, the Bank refers to the Financial Services Authority
regulations regarding the implementation of information technology by general commercial banks.
c. Governance Outcome
The Bank has implemented an integrity financial reporting process in accordance with
internal policies and regulatory provisions.
Annual reports, structured reports, unstructured reports, and/or sustainability reports have been submitted by the Bank completely and on time to the Financial Services Authority and the Bank's shareholders.
Report transparency has been carried out in reporting media and deadlines in accordance with
the Financial Services Authority regulations governing transparency and publication of bank reports, including:
a) quarterly published financial reports; and b) annual reports.
The governance implementation report has
reflected the Bank's actual conditions or in accordance with the Bank's self-assessment results and is attached with the self-assessment results and at least covers:
a) Good Governance principles as referred to in the POJK General Commercial Bank Governance and POJK Sharia Governance for BUS and UUS, as well as self-assessment results on the implementation of governance; b) share ownership of Board of Directors members as well as financial relationships and family relationships of Board of Directors members with other Board of Directors members, Board of Commissioners members, DPS members, and/or Bank shareholders; c) share ownership of Board of Commissioners members as well as financial relationships and family relationships of Board of Commissioners members with other Board of Commissioners members, Board of Directors members, DPS members, and/or Bank shareholders; d) frequency of Board of Commissioners meetings and DPS meetings in accordance with regulations; e) the number of deviations (internal fraud) that occurred and the Bank's resolution efforts; f) legal issues; g) transactions containing conflicts of interest; h) share buyback and/or Bank bonds; i) provision of funds for social activities and/or political activities, both nominal and receipts.
The governance implementation report has
been submitted completely and on time to the Financial Services Authority and the Bank's shareholders.
The governance implementation report has been presented
on the website on time.
Mediation in the resolution of customer complaints
of the Bank is carried out well in accordance with the Bank's policies and regulatory provisions.
The Bank implements transparency of information
regarding products and the use of consumer and/or customer data.
The Bank implements information technology in accordance with the Financial Services Authority
regulations regarding the implementation of information technology by general commercial banks.

Bank Strategic Plan
a. Governance Structure

The Bank's strategic plan has been formulated in the form of a corporate plan and
business plan.
The Bank's strategic plan is fully supported by the owners, as reflected in
the owners' commitment and efforts to strengthen the Bank's capital, as well as efforts to handle and/or resolve the Bank's financial problems.
The Bank has a plan to overcome potential financial problems at
the Bank contained in a recovery action plan that has received approval from shareholders in the GMS in accordance with the Financial Services Authority Regulation regarding the determination of supervision status and handling of general commercial bank problems. For BUK that have UUS:
The Bank's strategic plan has included a long-term strategy for UUS business development.

No Criteria/Indicator Analysis
5) The Bank's strategic plan is fully supported
by the owners, as reflected in the owners' commitment and efforts to strengthen UUS business funds. b. Governance Process

The Bank has formulated RBB realistically, comprehensively, measurably (achievable) by considering prudential principles and
responsive to internal and external changes.
The Bank ensures the alignment of the Bank's strategic plan, including RBB and the Bank's corporate plan.
RBB is approved by the Board of Commissioners.
The Board of Directors has communicated RBB to:
a) the Bank's shareholders; and b) all organizational levels within the Bank.
The Board of Directors has effectively implemented RBB.
In the formulation and submission of RBB, reference is made to the Financial Services Authority Regulation
regarding the business plan of general commercial banks, and the Bank has considered:
a) external factors and internal factors that can affect the Bank's business continuity; b) prudential principles; c) implementation of risk management; and d) the principle of healthy banking.
The Board of Commissioners has implemented
supervision of the implementation of RBB.
Owners show seriousness and/or have taken necessary steps
in supporting the Bank's strategic plan, as reflected in the owners' commitment and efforts to strengthen the Bank's capital, as well as efforts to handle or Bank problems.
The Bank implements the plan to handle financial problems and/or strengthen the Bank's capital contained in RBB.
The Bank implements recovery options in accordance with the Bank's recovery action plan.
c. Governance Outcome
Corporate plan and RBB are
formulated by the Board of Directors and approved by the Board of Commissioners.
Corporate plan and RBB
along with their implementation have been communicated by the Board of Directors to controlling shareholders and all organizational levels within the Bank.
The Bank's strategic plan has been formulated in the form of Corporate Plan and
Business Plan in accordance with the Bank's vision and mission.

No Criteria/Indicator Analysis
4) RBB describes the Bank's sustainable growth.
5) The Bank's growth provides economic and non-economic benefits to Stakeholders.
6) The Bank's strategic plan is formulated based on
a comprehensive study by considering business opportunities and strengths owned by the Bank and identifying weaknesses and threats through SWOT Analysis (Strength, Weakness, Opportunity, Threat).
7) The Bank's strategic plan has been supported by adequate infrastructure preparation including
among others human resources, information technology, office networks, as well as policies and procedures.
8) The Bank's strategic plan has been communicated
to shareholders and all organizational levels within the Bank.
9) There is owner intervention if the Bank's profit distribution is carried out
without considering efforts to increase capital to support the Bank's strategic plan.
10) Owners are able to overcome worsening capital conditions or the Bank's capital is
less than the amount established in accordance with the Financial Services Authority Regulation regarding minimum capital provision requirements and minimum core capital fulfillment for general commercial banks.
11) There is support from Controlling Shareholders in handling and/or resolving financial problems that
occur at the Bank.
14. Shareholder Aspects
a. Governance Structure

Bank shareholders support
the implementation of healthy Bank business activities and maintain the Bank's business continuity, as well as being responsible for handling and resolving Bank problems.
The Bank has formulated and possesses policies
related to dividends that include content in accordance with regulations.
The Bank has formulated and possesses policies
related to the management of fair relationships with all shareholders.
The Bank has policies related to ownership
and release of shares that are the result of ESOP/MSOP.
The dividend distribution plan has been included in RBB.
b. Governance Process

No Criteria/Indicator Analysis

The Bank communicates policies related
to dividends to shareholders and conducts periodic reviews of dividend policies.
The dividend distribution plan is based on
the fulfillment of shareholder rights by prioritizing the Bank's interests.
The Bank's dividend distribution is based on
the dividend policy that has been formulated.
The Bank considers external and
internal aspects in determining dividend distribution to shareholders.
The Bank considers the Bank's profitability performance generated fairly in
performing dividend calculations.
The Bank considers the interests or rights
of shareholders including protection for minority shareholders in accordance with the Bank's internal policies.
The release of shares carried out by members
of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of DPS, Executive Officials, and/or Bank employees considers the Bank's conditions and is carried out with prudential principles.
Shareholders do not intervene, take personal or group benefits, and have conflicts of interest
in determining strategic decisions including among others appointment, replacement, and/or dismissal of Board of Directors members, Board of Commissioners members, and/or DPS members and do not intervene in the Bank's operational activities.
The Bank implements Good Corporate Governance and adequate risk management in
implementing the Bank's capital participation activities in subsidiary companies and investees in accordance with the Financial Services Authority Regulation regarding capital participation activities by general commercial banks.
c. Governance Outcome
There is support from all shareholders
for the implementation of healthy Bank business activities in accordance with prudential principles and Sharia Principles for BUS and BUK that have UUS.
The release of shares carried out by members
of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of DPS, Executive Officials, and/or Bank employees does not disrupt the Bank's business continuity or cause the Bank to experience financial problems and/or losses.
The dividend distribution carried out by the Bank
to the Bank's shareholders does not

No Criteria/Indicator Analysis disrupt the Bank's business continuity or cause the Bank to experience financial problems and/or losses.
4) There is no insider trading and/or
insider information.
5) The rights of all Bank shareholders are protected,
at least to obtain reports regarding the Bank's financial conditions on time, resolution if shareholders do not agree with the Bank's corporate activities and actions, voting in the GMS, as well as receiving dividends based on GMS decisions in accordance with regulatory provisions.
15. Implementation of anti-fraud strategy, including anti-bribery
a. Governance Structure

The Bank has an adequate organizational structure to support the implementation of anti-fraud strategies in accordance with the Financial Services Authority
Regulation regarding the implementation of anti-fraud strategies for financial services institutions.
The Bank has an adequate anti-bribery management system.
The Bank has policies and/or
guidelines for the implementation of anti-fraud strategies for the Bank with coverage in accordance with the Financial Services Authority Regulation regarding the implementation of anti-fraud strategies for financial services institutions.
Unit leaders or officials who oversee functions responsible for handling the implementation of anti-fraud strategies have:
a) expertise certificates in the field of anti-fraud; b) experience in the field of anti-fraud; and/or c) adequate experience in the field of financial services institutions related.
The Bank has policies and/or
procedures in the provision of credit or financing based on Good Corporate Governance principles.
The Bank has an adequate organizational structure related to the disbursement, approval, and
write-off of credit or financing by applying clear functional separation (four eyes principle).
The Bank has policies related to the process
of procurement of goods and/or services at the Bank, as well as the implementation of the Bank's budgeting and expenditure. b. Governance Process
The Bank formulates and implements anti-fraud strategies with reference to the Financial Services Authority
Regulation regarding the implementation of anti-fraud strategies for financial services institutions, as well as considering:
a) internal and external environmental conditions;

No Criteria/Analysis Indicators b) complexity of business activities; c) type of fraud; d) fraud-related risks; and e) adequacy of required resources.
2) The Bank implements an anti-fraud strategy and ensures that the controlled organization implements an anti-fraud strategy.
3) The Bank sets targets for the implementation of the anti-fraud strategy and establishes a work program to achieve these targets.
4) The Board of Directors and Board of Commissioners of the Bank ensure that the implementation of the anti-fraud strategy runs effectively.
5) The Bank conducts:
a) education and competency development for internal parties; and b) education and/or socialization for external parties, regarding the anti-fraud policy, at least 1 (one) time in 1 (one) year.
6) The work unit or function tasked with handling the implementation of the anti-fraud strategy has been tasked with handling the implementation of the anti-fraud strategy and reporting the results to Board of Directors members as a form of accountability.
7) The work unit or function tasked with handling the implementation of the anti-fraud strategy has a direct communication and reporting relationship with the Board of Commissioners.
8) The Bank prepares and submits the anti-fraud strategy to the Financial Services Authority, reports or corrections to reports on the implementation of the anti-fraud strategy, and/or reports on significant impact fraud incidents with coverage in accordance with the Financial Services Authority Regulation regarding the implementation of anti-fraud strategies for financial service institutions.
9) The Bank avoids pressure from any party in the disbursement and approval of credit or financing, as well as the execution of credit or financing write-offs.
10) The Bank periodically reviews policies related to the procurement process of goods and/or services at the Bank.
11) The procurement process of goods and services, as well as the implementation of the Bank's budgeting and expenditure, is carried out in accordance with the Bank's needs, the Bank's internal policies, and applicable legislation.
12) The procurement process of goods and/or services is carried out by paying attention to Good Corporate Governance at the Bank and with the principle of being at least efficient, effective, transparent, open, competitive, fair, and accountable, free from conflicts of interest, as well as the separation of functions and authority in the procurement process, and adhering to the concept of best price.

No Criteria/Analysis Indicators separation of functions and authority in the procurement process, and adhering to the concept of best price.
13) Board of Directors members, Board of Commissioners members, DPS members, Bank Committee members, Executive Officials, Bank employees, shareholders, affiliated parties, and/or other parties do not carry out prohibited actions in accordance with POJK General Bank Governance and POJK Sharia General Bank and Sharia Business Unit Governance.
c. Governance Outcome

The Bank has effectively implemented an anti-fraud strategy by conducting prevention and handling to ensure that the Bank's business activities are not utilized in activities related to criminal acts by implementing 4 (four) pillars:
a) prevention; b) detection; c) investigation, reporting, and sanctions; and d) monitoring, evaluation, and follow-up.
The Board of Directors and Board of Commissioners are able to ensure that the implementation of the anti-fraud strategy has run effectively.
The work unit or function tasked with handling the implementation of the anti-fraud strategy has carried out its duties in accordance with regulations.
The anti-fraud strategy, reports or corrections to reports on the implementation of the anti-fraud strategy, and/or reports on significant impact fraud incidents have been submitted completely, accurately, currently, wholly, and on time to the Financial Services Authority.
Credit or financing decisions are based on the application of the separation of functions principle (four eyes principle) between business and risk functions in accordance with the Financial Services Authority Regulation regarding the implementation of risk management for general banks and the Financial Services Authority Regulation regarding the implementation of risk management for sharia general banks and sharia business units.

Implementation of Sustainable Finance, including the implementation of social and environmental responsibility
a. Governance Structure

The Bank has a sustainable finance action plan for the Bank with coverage in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.
The Bank has an adequate organizational structure to support the implementation of risk management, including risks related to climate.

No Criteria/Analysis Indicators
3) The Bank has adequate risk management policies and procedures as well as risk limit determinations, including those related to climate-related risks.
4) The Bank has a system and/or allocation of funds for social and environmental responsibility.
5) The Bank has a business and investment strategy that integrates environmental, social, and governance values.
b. Governance Process

The Bank implements sustainable finance in business activities using principles in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.
The Bank prepares a sustainable finance report with coverage in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.
The Bank communicates the sustainable finance action plan to:
a) shareholders; and b) all levels of organization within the Bank.
The Bank implements the sustainable finance action plan effectively in accordance with the Bank's internal policies and applicable legislation.
The procurement process, budgeting, and expenditure of social and environmental responsibility funds have been carried out in accordance with the Bank's internal policies and applicable legislation.
The Bank implements business practices and investment strategies that support at least:
a) a sustainable business ecosystem; b) product development; c) transactions; d) financing services for sustainable activities and financing for the transition to sustainable economic growth; e) the development of sustainable finance programs and the implementation of the Bank's environmentally conscious operational activities; and f) social and community empowerment.
The Board of Directors, Board of Commissioners, and work units at the Bank have roles and responsibilities for managing climate-related risks.
The Bank develops and implements strategies to mitigate potential climate-related risk impacts on the Bank's business, as well as considering climate-related risks in business strategies and the risk management framework.

No Criteria/Analysis Indicators
9) The Bank identifies, monitors, and manages financial risks related to climate that can affect financial conditions.
c. Governance Outcome

The Bank has effectively implemented sustainable finance and allocated social and environmental responsibility funds in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.
The sustainable finance action plan contains implementation time targets and is submitted completely and on time to the Financial Services Authority.
The sustainability report has been submitted completely and on time to the Financial Services Authority.
The sustainable finance action plan has been submitted by the Bank to shareholders and all levels of organization.
The Bank has implemented good governance in managing climate-related risks.
The allocation and use of the Bank's social and environmental responsibility funds are free from the personal interests of any party.

Implementation of Governance in Banking Groups (KUB)
a. Governance Structure

The Bank as the parent company or parent company executor in the Banking Group (KUB) has policies in the implementation of coordination and evaluation related to the implementation of governance within its business group.
The implementation of synergy in the Banking Group (KUB) is supported by the existence of cooperation agreements as per regulations.
b. Governance Process
The implementation of governance in the Banking Group (KUB) has been in accordance with the policies of the Bank as the parent company or parent company executor and applicable legislation.
The Bank carries out committee synergy as per the cooperation agreements that have been jointly prepared.
Every decision-making for the Bank that receives the benefits of committee synergy involves at least 1 (one) employee with a job level of at least Executive Official.
c. Governance Outcome
The Bank implements good governance in the Banking Group (KUB) while still paying attention to the characteristics

This copy is consistent with the original
Director of Legal Development
Legal Department signed
Aat Windradi
No Criteria/Analysis Indicators and complexity of business at each member of the Banking Group (KUB).
2) The implementation of synergy results in efficiency and optimization of the Bank's resources and provides added value to the parties involved.
Established in Jakarta on June 24, 2025
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
DIAN EDIANA RAE signed

APPENDIX IV
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 14/SEOJK.03/2025 REGARDING THE IMPLEMENTATION OF CORPORATE GOVERNANCE FOR COMMERCIAL BANKS

This copy is consistent with the original
Director of Legal Development
Legal Department signed
Aat Windradi
SELF-ASSESSMENT REPORT
IMPLEMENTATION OF CORPORATE GOVERNANCE
Bank Name :
Position :
Self-Assessment Results of Corporate Governance Implementation Rank Definition Rank Individual Consolidated Analysis Description regarding the conclusion on the assessment of the Bank's corporate governance implementation by considering the factors of corporate governance implementation comprehensively and structurally, covering both governance structure, governance process, and governance outcome. In this description, it must at least explain the identification of problems in the form of weaknesses and the causes of the problems (root cause) as well as the strengths of corporate governance implementation. In the event that the Bank has Subsidiary Companies that are consolidated, then:

The assessment is carried out on the corporate governance implementation problems of the subsidiary company that are considered to have a significant impact on the Bank's consolidated corporate governance.
The factors of corporate governance implementation of the subsidiary company used for the assessment of the implementation of Good Corporate Governance principles on a consolidated basis are established by considering the business characteristics of the subsidiary company and supported by adequate data and information.
The determination of the Bank's consolidated corporate governance rank is carried out by considering the impact of the implementation of the subsidiary company's corporate governance.
Established in Jakarta on June 24, 2025
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
DIAN EDIANA RAE signed

APPENDIX V
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 14/SEOJK.03/2025 REGARDING THE IMPLEMENTATION OF CORPORATE GOVERNANCE FOR COMMERCIAL BANKS

I. TABLE OF FUNDING PROVISION TO RELATED PARTIES AND LARGE EXPOSURE
No. Funding Provision
Amount
Debtor Nominal
(millions of Rupiah)

To related parties
To core debtors:
a. individuals b. groups
II. TABLE OF TOTAL DEVIATIONS (INTERNAL FRAUD)
Deviation (Internal Fraud) in 1 Year
Total Cases Carried Out by
Board of Directors Members,
Board of Commissioners Members, and
DPS Members
Permanent Employees
Non-Permanent Employees and Outsourced Labor
Year Before
Current Year
Year Before
Current Year
Year Before
Current Year
Total
Fraud
Completed
In the process of internal Bank resolution
Not yet attempted resolution
Has been followed up through legal process
III. TABLE OF LEGAL PROBLEM DISCLOSURE
No. Legal Problem
Total Cases
Civil Criminal
Has received a decision that has permanent legal force
In the process of resolution
Total
IV. TABLE OF TRANSACTIONS WITH CONFLICTS OF INTEREST

This copy is consistent with the original
Director of Legal Development
Legal Department signed
Aat Windradi
No.
Name and
Position
Party with
Conflict of Interest
Name and
Position
Decision Maker
Type of
Transaction
Transaction Value
(millions of
Rupiah)
Description*)
*) Not in accordance with applicable systems and procedures
V. TABLE OF BANK BUSINESS GROUP STRUCTURE
Parent Company

Subsidiary Company
No. Company Name % Share Ownership

Established in Jakarta on June 24, 2025
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
DIAN EDIANA RAE signed

Implementation of Corporate Governance for Commercial Banks

Lineage: In force

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