Business Activities and Branch Network of Rural Banks Based on Core Capital

To:
The Board of Directors of Rural Banks

COPY
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 45/SEOJK.03/2017 CONCERNING BUSINESS ACTIVITIES AND BRANCH NETWORK OF RURAL BANKS BASED ON CORE CAPITAL

In relation to Financial Services Authority Regulation Number 12/POJK.03/2016 concerning Business Activities and Branch Network of Rural Banks Based on Core Capital (State Gazette of the Republic of Indonesia Year 2016 Number 34, Supplement to the State Gazette of the Republic of Indonesia Number 5849), hereinafter referred to as the POJK on Business Activities and Branch Network of Rural Banks Based on Core Capital, it is necessary to regulate the implementation regarding business activities and branch network of Rural Banks (BPR) based on core capital in this Circular Letter of the Financial Services Authority as follows:

I. GENERAL PROVISIONS

1. Business Activities that can be carried out by BPR are grouped according to the BPR's Core Capital based on Business Activities (BPRKU). The grouping of BPR based on Business Activities consists of 3 (three) BPRKU categories. The higher the BPR's Core Capital, the more varied the Business Activities that can be carried out by the BPR.

2. The availability of BPR Core Capital is also one of the supporting factors for Opening Branch Networks. The higher the BPR's Core Capital, the greater the number and wider the area of Branch Networks that can be opened by the BPR.

3. In addition to Core Capital, to support the implementation of Business Activities and Opening of Branch Networks, BPRs must also implement adequate risk management to mitigate risks arising from the implementation of Business Activities and/or Opening of Branch Networks.

4. The arrangement of Business Activities and Opening of Branch Networks is carried out so that the services provided by BPRs to the community in their respective areas can be more optimal in accordance with the capital capacity owned by the BPR, as well as an effort to improve the competitiveness of BPRs.

5. BPRs classified in a specific BPRKU group may experience a decrease in Core Capital, thereby becoming a lower BPRKU group. BPRs are classified into a lower BPRKU group if the BPR's Core Capital decreases for 6 (six) consecutive months, thereby no longer meeting the Core Capital requirements of the original BPRKU group.

6. BPRs are classified into lower BPRKU groups as referred to in point 5 in the following cases:
   a. BPRKU 3 experiences a decrease in Core Capital, becoming a BPRKU 2 group or a BPRKU 1 group; b. BPRKU 2 experiences a decrease in Core Capital, becoming a BPRKU 1 group; and
   c. BPRKU 1 experiences a decrease in Core Capital to less than Rp6,000,000,000.00 (six billion rupiah).

II. BPR BUSINESS ACTIVITIES

1. Types of BPR Business Activities
   Business Activities that can be carried out by BPRs are:

   a. Fund Collection
   BPR collects funds in the form of:
   1) Time Deposits
   BPR provides savings products that can only be withdrawn at a specific time based on an agreement between the saver and the BPR.
   2) Savings Accounts
   BPR provides savings products that can only be withdrawn according to specific agreed terms, but cannot be withdrawn using checks, giro drafts, and/or other instruments equivalent to those.
   3) Other forms equivalent to time deposits and/or savings accounts
   BPR provides fund collection products in other forms equivalent to time deposits and/or savings accounts. The term "other forms equivalent" is intended to accommodate the possibility that BPRs provide savings products resembling time deposits or savings accounts but not current accounts or other savings that can be withdrawn by check.
   4) Loans Received
   BPRs can accept all forms of loans received, whether from other banks or third parties who are not banks and originate from within the country.

   b. Fund Disbursement
   BPR provides credit to other parties in the form of providing money or claims that can be equivalent to it, based on loan-borrower approval or agreement between the BPR and other parties, obligating the borrower to repay their debt after a certain period with interest. Fund disbursement is conducted to debtors based on domicile, business location, and/or work location within the area and branch network permitted for BPRKU, considering the BPR's ability to conduct the credit granting process, including monitoring of such credit grants.

   c. Fund Placement
   BPR places funds with other parties in the form of:
   1) Current accounts, time deposits, certificates of deposit, and/or savings accounts at commercial banks and Islamic commercial banks;
   2) Time deposits and/or savings accounts at BPRs and Islamic Rural Financing Banks (BPRS); and
   3) Bank Indonesia Certificates.

   d. Foreign Currency Exchange Business Activities
   1) BPR conducts foreign currency exchange business by buying and selling foreign banknotes and purchasing traveler's checks that meet the regulations and requirements, as referred to in regulations concerning foreign currency traders.
   2) Approval for foreign currency exchange business granted to the BPR headquarters also applies to the corresponding BPR branches.
   3) BPRs wishing to conduct foreign currency exchange business at branch networks other than headquarters must:
   a) Include the implementation plan for foreign currency exchange business by the BPR in the BPR Business Plan; and b) Submit a report regarding the implementation plan for foreign currency exchange business no later than 30 (thirty) days before the implementation of the foreign currency exchange business, accompanied by an operational readiness plan.
   4) In implementing foreign currency exchange business, BPRs must calculate the daily balance of the foreign currency cash asset position in the amount referred to in regulations concerning foreign currency traders.

   e. Financial Inclusive Services without Branches (Laku Pandai) Laku Pandai activities involve providing banking and/or other financial services not through branch networks but through cooperation with other parties, supported by the use of information technology facilities, as referred to in Financial Services Authority regulations regarding Laku Pandai. BPRs can act as organizers of Laku Pandai activities or agents cooperating with organizing banks for Laku Pandai, according to the BPRKU group based on core capital.

   f. Electronic Banking Services Provision
   BPRs provide Electronic Banking services, including:
   1) Phone Banking
   BPR provides services for customers to conduct banking transactions by telephone by contacting the BPR service number.
   2) SMS Banking
   BPR provides banking information or transaction services accessible directly via mobile phones using Short Message Service (SMS).
   3) Mobile Banking
   BPR provides services for customers to conduct banking transactions via mobile phones.
   4) Internet Banking
   BPR provides services for customers to conduct banking transactions via the internet, for BPRs acting as organizers of Laku Pandai.

   g. Payroll Payments for BPR Customers
   BPR provides services to customers to conduct mass payroll payments to employees who are BPR customers.

   h. Limited Fund Transfer Cooperation Receiving Remittances from Abroad BPR conducts limited fund transfer cooperation receiving remittances (incoming transfers) from abroad with commercial banks and/or Indonesian legal entity non-bank businesses conducting fund transfer activities, as referred to in regulations concerning fund transfers. Payments to recipients (beneficiaries) can only be made in Indonesian Rupiah, and BPRs do not bear exchange rate risks. Cooperation agreements between BPRs and commercial banks and/or Indonesian legal entity non-bank businesses must include agreements regarding the time limit for commercial banks and/or Indonesian legal entity non-bank businesses to replace funds already paid by the BPR to the recipient (beneficiary).

   i. Automated Teller Machine (ATM) Card Issuance
   BPRs issue payment instruments using cards that can be used for cash withdrawals and/or fund transfers, so that the cardholder's obligations are fulfilled immediately by directly reducing the cardholder's savings at the BPR, as referred to in regulations concerning payment instruments using cards.

   j. Debit Card Issuance
   BPRs issue payment instruments using cards that can be used to pay for obligations arising from economic activities, including shopping transactions, so that the cardholder's obligations are fulfilled immediately by directly reducing the cardholder's savings at the BPR, as referred to in regulations concerning payment instruments using cards.

   k. Electronic Money Issuance or Marketing of Electronic Money from Other Issuers BPRs can act as Electronic Money issuers or as parties cooperating with Electronic Money issuers to market Electronic Money.

   l. Fund Transfers for Own or Customer Interests via BPR Accounts at Commercial Banks
   BPRs act as providers of fund transfer services via BPR accounts at commercial banks conducting final settlement activities, as referred to in regulations concerning fund transfers.

   m. Cooperation with Insurance Companies to Reference Insurance Products to Customers Related to BPR Products BPRs reference insurance products that are requirements to obtain certain BPR products to customers. The requirement for the existence of such insurance products is intended for the benefit and protection of the BPR regarding risks related to products issued or services provided by the BPR to customers. In this case, insurance products conducted through agreements between customers and insurance companies also protect debtors as insured parties, even if the policy includes a banker's clause because the BPR is the beneficiary. Examples of BPR products requiring insurance are:
   1) Home ownership loans accompanied by mandatory fire insurance for the house or building and life insurance for the borrowing customer (debtor).
   2) Motor vehicle loans accompanied by mandatory property insurance for motor vehicles.
   3) Loans to employees or pensioners accompanied by mandatory life insurance for the borrowing customer (debtor).
   To accommodate BPR customers in choosing mandatory insurance products, BPRs must offer insurance products from at least 3 (three) partner insurance companies, one of which may be a related party of the BPR. The definition of related parties refers to Financial Services Authority regulations concerning maximum credit granting limits for BPRs. Referenced insurance products are limited to protection or coverage insurance products, and such insurance products are requirements to obtain certain BPR products for customers.

   n. Receipt of Trust Funds for Bill Payment Service BPRs can receive trust funds for bill payment services such as electricity, telephone, water, and tax payments.

   Explanation of Business Activities as referred to in point 1 is contained in Appendix I, which is an integral part of this Financial Services Authority Circular Letter.

2. BPR Business Activities Based on BPRKU
   Business Activities that can be carried out by BPRs as referred to in point 1 are grouped according to the BPR's Core Capital capacity, with the aim that BPRs can focus on Business Activities and provide products and services appropriate to their capital capacity. Thus, BPRs are expected to develop optimally and play an optimal role while managing risks according to BPRKU. Types of Business Activities that can be carried out in each BPRKU are as contained in Appendix II, which is an integral part of this Financial Services Authority Circular Letter.

3. New Business Activities
   a. New Business Activities for BPRs are new business activities and/or new supporting activities if they meet the criteria:
   1) never previously carried out by the respective BPR; or
   2) previously carried out by the respective BPR, but with development that changes certain or all risks of the respective BPR.
   b. Development of BPR Business Activities as referred to in letter a point 2) includes development of features and cooperation related to the implementation of Business Activities and/or supporting activities previously carried out by the respective BPR. Examples:
   1) A BPR in the BPRKU 2 group acting as an ATM Card issuer adds service features provided to ATM Card users, such as the ability to pay electricity bills.
   2) A BPR in the BPRKU 3 group acting as a Debit Card issuer adds merchants using the BPR's ATM Card as a payment instrument.
   3) A BPR in the BPRKU 1 group that has conducted business as an ATM Card issuer develops cooperation with commercial banks regarding ATM network utilization.
   c. BPRs can carry out New Business Activities if:
   1) the implementation plan for Business Activities requiring permits and/or approvals from the Financial Services Authority and/or relevant authorities; and
   2) the implementation plan for Business Activities that must be reported to the Financial Services Authority,
   are included in the BPR Business Plan submitted to the Financial Services Authority, as referred to in Financial Services Authority regulations concerning BPR and BPRS business plans.

III. BUSINESS ACTIVITIES REQUIRING PERMITS AND/OR APPROVALS

1. Business Activities Requiring Permits and/or Approvals
   Business Activities of BPRs that must obtain permits and/or approvals prior to implementation by the BPR as referred to in Article 6 paragraph (1) of the POJK on Business Activities and Branch Network of Rural Banks Based on Core Capital are as follows:

   a. Business Activities requiring approval from the Financial Services Authority, namely:
   1) fund collection in other forms equivalent to savings in the form of time deposits and/or savings accounts;
   2) foreign currency exchange business;
   3) services as organizers of financial inclusive services without branches (Laku Pandai); and
   4) cooperation activities regarding limited fund transfers receiving remittances from abroad.

   b. Business Activities requiring approval from the Financial Services Authority and permits from relevant authorities according to their respective duties and authorities, namely:
   1) provision of Electronic Banking services, including phone banking, SMS banking, mobile banking, and internet banking in cases related to payment system service providers. Applications for permits and/or approvals are submitted for each type of Electronic Banking service;
   2) activities as ATM Card issuers;
   3) activities as Debit Card issuers; and
   4) activities as Electronic Money issuers.

2. Mechanism for Applying for Permits and/or Approvals for BPR Business Activities
   a. BPRs applying for the implementation of Business Activities as referred to in point 1 must meet the following requirements:
   1) the implementation plan for new Business Activities is included in the BPR business plan;
   2) health status is classified as healthy for the last 12 (twelve) months;
   3) has a Minimum Capital Adequacy Ratio (KPMM) of at least 12% (twelve percent) for the last 6 (six) months;
   4) has a Gross Non-Performing Loan (NPL) ratio of no more than 5% (five percent) for the last 6 (six) months;
   5) is not in a loss position, neither in the previous year nor in the current year. Being not in a loss position means the BPR did not incur losses in the financial report position of the previous year and in every month during the current year;
   6) has adequate information technology, meaning the BPR is able to conduct bookkeeping during transactions (real-time), accompanied by security mechanisms starting from systems, data, and networks, and there are monitoring and evaluation mechanisms for information technology facilities for providing services to customers, as referred to in Financial Services Authority regulations concerning information technology implementation standards for BPRs and BPRS;
   7) meets operational readiness in terms of organizational completeness and human resources with adequate competence regarding information technology, proven among others through formal education, work experience, and/or training related to information technology previously attended, as well as service facilities and customer complaints equipped with documents of customer complaint systems and procedures and proof of announcement to customers;
   8) implements risk management referring to Financial Services Authority Regulations concerning the implementation of risk management for BPRs according to their implementation stage and with at least the types of risks being credit risk, operational risk, compliance risk, and liquidity risk; and
   9) there are no violations of regulations concerning BPRs, namely violations of:
   a) prohibitions on dual positions and family or in-law relationships, as well as minimum requirements for the number of Board of Directors members and Board of Commissioners members; b) the obligation for BPRs to have at least 1 (one) shareholder with a share ownership percentage of at least 25% (twenty-five percent); c) the obligation to meet minimum core capital; and/or d) other violations according to the Financial Services Authority's assessment that will have a significant impact on the financial performance of the BPR, endangering its business continuity.

   b. Applications for the implementation of Business Activities as referred to in letter a must be accompanied by documents as contained in Financial Services Authority regulations concerning BPR and BPRS business plans, containing at least information and explanations regarding:
   1) types and general descriptions of new Business Activities, including:
   a) product names and features or functions offered; and b) information regarding the Business Activity scheme to be implemented;
   2) implementation time of new Business Activities, namely the date the Business Activity is first launched to customers;
   3) objectives of new Business Activities, including customer segments and expected benefits from the implementation of new Business Activities for customers;
   4) relevance of new Business Activities to BPR strategy, containing explanations regarding:
   a) support and benefits of implementing new Business Activities for improving performance and achieving BPR business targets as contained in the BPR Business Plan; and b) business analysis for at least the first 2 (two) years, including target transaction values and costs for implementing new Business Activities for BPR;
   5) risks of implementing new Business Activities, including results of analysis from identification, measurement, and monitoring of at least credit risk, operational risk, compliance risk, and liquidity risk;
   6) risk mitigation for implementing new Business Activities, covering efforts or policies to control risks arising from the implementation of new Business Activities; and
   7) other supporting documents related to implementation readiness if necessary, including:
   a) policies and procedures related to the implementation of Anti-Money Laundering and Counter-Financing of Terrorism (APU and PPT) programs; b) proof of operational readiness, including implementation procedures (standard operating procedures) and provision of supporting infrastructure; c) proof of cooperation agreements with third parties or partners, for Business Activities involving third parties; d) accounting information systems, including brief explanations regarding the relevance of such accounting information systems to the BPR's overall accounting information systems; e) organizational structure and availability and readiness of human resources handling the proposed Business Activities; f) documents or draft documents supporting transparency aspects in providing information to customers regarding the implementation of new Business Activities, including among others agreements between BPRs and customers or other parties, brochures, leaflets, documents, and/or application forms; or g) information technology infrastructure readiness documents, regarding the implementation of Business Activities supported by information technology, referring to Financial Services Authority regulations concerning information technology implementation standards for BPRs and BPRS. The above applications are accompanied by proof of meeting the requirements as referred to in letter a. If necessary, the Financial Services Authority requests additional information and/or supporting documents related to the requested Business Activities.

   c. Applications for plans to implement new Business Activities as referred to in letter a are submitted by BPRs to the Financial Services Authority using example application letters and application document checklists as contained in Appendix III.1, which is an integral part of this Financial Services Authority Circular Letter.

   d. The Financial Services Authority provides approval for applications for plans to implement Business Activities as referred to in letter c within a maximum of 30 (thirty) working days from the date the application along with the required documents is received completely. This time limit does not include time given to BPRs to complete, add, and/or correct the required documents for the application.

e. The Financial Services Authority (OJK) grants approval or rejection for the application to implement Business Activities based on:

1. research on compliance with requirements; and

2. research on document completeness.
   f. If the documents submitted for the application to implement Business Activities are deemed incomplete, the Rural Bank (BPR) must complete the missing documents within a maximum of 10 (ten) working days from the date of the OJK notification letter stating that the application documents are incomplete. g. If the documents submitted by the BPR for the application to implement Business Activities are deemed complete, the OJK issues a notification letter to the BPR stating that the application documents for implementing Business Activities are complete. h. For BPRs applying to implement Business Activities as:

3. ATM Card issuers;

4. Debit Card issuers;

5. Electronic Money issuers; and

6. providers of Electronic Banking services related to payment system service providers,
   the implementation of said Business Activities may be carried out provided the BPR has obtained permission from the relevant authority.
   i. The time limit for implementing Business Activities requiring permission from the relevant authority refers to the provisions of legislation regarding each type of Business Activity regulated by the relevant authority.
   j. The BPR is given a maximum period of 6 (six) months from the date of OJK approval as referred to in letter e to:

7. apply to the relevant authority if the Business Activity requires permission from said authority, with a copy sent to the OJK;

8. implement the Business Activity if it can be carried out based on OJK approval.
   k. If during the 6 (six) month period as referred to in letter j, the BPR does not apply for permission from the relevant authority and/or does not implement the Business Activity that has received OJK approval, the OJK approval is declared invalid.
   l. If during the 6 (six) month period as referred to in letter j or during the permitting process at the relevant authority, the BPR's performance declines such that it no longer meets the requirements for implementing Business Activities, the OJK has the authority to cancel the approval letter that has been issued.
   m. If the OJK approval letter is declared invalid or cancelled as referred to in letters k and l, but the BPR still plans to implement the submitted Business Activity, the BPR must submit a new application for the plan to implement Business Activities to the OJK. n. BPRs conducting Business Activities as referred to in item 1 must submit the Realization Report of Business Activity Implementation within a maximum of 10 (ten) working days from the date of Business Activity implementation using the format in Appendix III.2, which is an integral part of this OJK Circular. o. If the BPR's Business Activity requires permission from the relevant authority as referred to in item 1 letter b, the Realization Report of Business Activity Implementation as referred to in letter n must be accompanied by a photocopy of the document or permission letter for implementing the Business Activity from said authority. p. The realization of Business Activity implementation is calculated from the date the Business Activity is launched to customers. The Realization Report of Business Activity Implementation must contain at least the following information and explanations:

9. type and name of the Business Activity;

10. date of launch of the Business Activity; and

11. conformity of the implemented Business Activity with the Business Activity approved by the OJK.

IV. BUSINESS ACTIVITIES THAT MUST BE REPORTED

1. Business Activities Mandatory to be Reported to the Financial Services Authority
   The Business Activities that must be reported by BPRs to the OJK as referred to in Article 6 paragraph (2) of POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital are as follows:
   a. financial agent services without offices in the context of inclusive finance (Laku Pandai); b. salary payment services for BPR customers;
   c. marketing activities of Electronic Money from other issuers;
   d. fund transfers for own interests or customer interests through the BPR's account at a general bank; e. cooperation activities with insurance companies to refer insurance products to customers related to BPR products; and f. receiving entrusted funds in the context of bill payment service provision such as electricity, telephone, water, and tax payments.

2. Mechanism for Submission of Reports on Mandatory Business Activities
   a. BPRs conducting Business Activities as referred to in item 1 submit reports on the implementation of Business Activities attaching supporting documents containing at least the following information and explanations:

1. type and general description of the new Business Activity, including:
   a) product name and features or functions offered; and b) information regarding the scheme of the Business Activity to be implemented;
2. timing of implementation of the new Business Activity, namely the date the Business Activity is first launched to customers;
3. purpose of the new Business Activity, including targets expected from the implementation of the Business Activity as stated in the BPR Business Plan;
4. connection of the new Business Activity with the BPR's business strategy, including support and benefits of implementation; and
5. other supporting documents or information related to the implementation of the new Business Activity, including cooperation documents with third parties and operational procedures (standard operating procedures), if necessary.
   b. Reports as referred to in letter a are submitted by the BPR to the OJK within a maximum of 10 (ten) working days from the date of Business Activity implementation using the format in Appendix IV, which is an integral part of this OJK Circular.
   c. If the OJK finds deviations in the implementation of new Business Activities as referred to in item 1, the OJK has the authority to request the BPR to adjust or cease the implementation of said Business Activity.

V. PROCEDURES FOR REPORTING THE IMPLEMENTATION OF FOREIGN CURRENCY EXCHANGE BUSINESS ACTIVITIES

1. BPRs conducting foreign currency exchange business activities must submit periodic quarterly reports on foreign currency exchange business activities to the OJK in accordance with the provisions of legislation regarding foreign currency traders.

2. Submission of reports as referred to in item 1 is done no later than the end of the following month after the end of the 3rd (three) month of the respective quarter. The end of the quarter refers to the end of March, June, September, and December. If the end of the following month falls on a Saturday, Sunday, or holiday, the report is submitted no later than 1 (one) working day thereafter.

3. The head office of the BPR conducting foreign currency exchange business activities must submit periodic reports on foreign currency exchange business activities to the OJK, as follows:
   a. The BPR head office submits reports on foreign currency exchange business activities covering reports on transactions for the sale and purchase of foreign paper money (banknotes) and the purchase of traveller’s cheques, according to the format in Appendix V.1, which is an integral part of this OJK Circular. b. The reports on foreign currency exchange business activities submitted to the OJK are consolidated reports covering the head office and all branch offices.
   c. The preparation of reports on foreign currency exchange business activities refers to Appendix V.2, which is an integral part of this OJK Circular.

4. In addition to the reports as referred to in item 1, the BPR head office conducting foreign currency exchange business activities submits reports on suspicious financial transactions and cash financial transactions in accordance with the provisions of legislation regarding AML and CFT (Anti-Money Laundering and Counter-Proliferation Financing).

5. Reports as referred to in item 1 are made completely, correctly, and accurately, stamped by the BPR, and submitted to the OJK offline in hardcopy and softcopy formats with a cover letter signed by the BPR Board of Directors.

VI. CEASATION OF BUSINESS ACTIVITIES AT THE REQUEST OF THE FINANCIAL SERVICES AUTHORITY

1. The OJK has the authority to request BPRs to cease Business Activities within a timeframe determined by the OJK, either temporarily or permanently, based on the OJK's assessment of deviations that occur:

a. Business Activities conducted:

1. do not match the Business Activity plan submitted to the OJK;
2. have the potential to cause significant losses to the BPR's financial condition;
3. have the potential to significantly increase the BPR's reputational risk due to complaints or lawsuits from customers; and/or
4. do not comply with legislation, such as violations of OJK regulations consisting of temporary cessation of part of the BPR's business activities as regulated in POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital;
   and/or b. The BPR does not apply adequate risk management over the implemented Business Activities.

2. BPRs ordered to cease Business Activities as referred to in item 1 must immediately cease offering, selling, and/or entering into new agreements or transactions regarding the Business Activities that must be ceased.
3. If the BPR is ordered to permanently cease Business Activities, in addition to ceasing as referred to in item 2, the BPR must submit an action plan to the OJK regarding the settlement of obligations to customers related to the Business Activities that have been implemented, within a maximum of 1 (one) month since the BPR was ordered to cease Business Activities.
4. Procedures and methods for ceasing Business Activities refer to applicable legislative provisions, including for BPR Business Activities that require permission from the relevant authority as referred to in item III.1.b.

VII. CEASATION OF FOREIGN CURRENCY EXCHANGE BUSINESS ACTIVITIES BY BPRS

1. BPRs may cease all foreign currency exchange business activities at the head office and other offices by first submitting a plan to cease foreign currency exchange business activities to the OJK no later than 30 (thirty) days before the date of cessation of foreign currency exchange business activities, as per Appendix VI.1, which is an integral part of this OJK Circular.
2. The application for the plan to cease foreign currency exchange business activities by the BPR as referred to in item 1 is accompanied by documents:
   a. reasons for cessation; and b. a statement signed by the BPR Board of Directors that all assets (foreign paper money and traveller’s cheques) related to foreign currency exchange business activities implemented before the cessation date have been settled and are fully the responsibility of the BPR.
3. The OJK issues approval for the cessation of the BPR's foreign currency exchange business activities no later than 30 (thirty) days after the application for cessation of the BPR's foreign currency exchange business activities is received in complete form.
4. The implementation of the cessation of the BPR's foreign currency exchange business activities as referred to in item 1 is reported by the BPR to the OJK no later than 10 (ten) working days from the date of implementation of the cessation of the BPR's foreign currency exchange business activities, as per Appendix VI.2, which is an integral part of this OJK Circular.
5. The cessation of the BPR's foreign currency exchange business activities at 1 (one) or more BPR offices is reported by the BPR head office to the OJK no later than 10 (ten) working days after the date of implementation of the cessation of foreign currency exchange business activities at the BPR office, accompanied by reasons for cessation, as per Appendix VI.3, which is an integral part of this OJK Circular.

VIII. OFFICE NETWORK AREA OF RURAL BANKS

1. Scope
   a. Office Networks in this OJK Circular refer to BPR offices including branch offices, cash offices, cash service activities, and electronic banking devices as referred to in OJK regulations regarding BPRs. b. Opening of Office Networks in this OJK Circular refers to the opening of BPR Office Networks including the opening of offices resulting from address relocation or change of status of BPR offices.

2. Area Boundaries and Relocation of Office Networks
   a. Area Boundaries of Office Networks and Number of Branch Offices by BPRKU Group

1. BPRKU 1
   a) BPRKU 1 can only open BPR Office Networks in 1 (one) district or city area identical to the district or city where the BPR head office is located. The number of branch offices that can be owned is at most 20 (twenty) offices, including existing branch offices and those to be opened by the BPR. Example:
   BPR "A" with core capital of Rp5,000,000,000.00 (five billion rupiah) headquartered in Cirebon Regency, West Java Province, already has 5 (five) branch offices. BPR "A" can open new branch offices at most 15 (fifteen) offices in the area of Cirebon Regency. b) BPRKU 1 that has met Core Capital of at least Rp6,000,000,000.00 (six billion rupiah) can open BPR Office Networks in the district or city identical to the location of the BPR head office and/or districts or cities bordering directly with the district or city where the BPR head office is located, within 1 (one) province. The number of branch offices that can be owned is at most 30 (thirty) offices, including existing branch offices and those to be opened by the BPR.

Example:
(1) BPR "B" with core capital of Rp8,000,000,000.00 (eight billion rupiah) headquartered in Sidoarjo Regency, East Java Province, already has 10 (ten) branch offices. BPR "B" can open new branch offices at most 20 (twenty) offices in Sidoarjo Regency, Surabaya City, Gresik Regency, Mojokerto Regency, and/or Pasuruan Regency. (2) BPR "C" with core capital of Rp8,000,000,000.00 (eight billion rupiah) headquartered in Magelang City, Central Java Province, already has 7 (seven) branch offices. BPR "C" can open new branch offices at most 23 (twenty-three) offices in Magelang City and Magelang Regency.
2) BPRKU 2
BPRKU 2 can only open BPR Office Networks in the district or city identical to the location of the BPR head office and/or districts or cities bordering directly, whether by land or sea, with the district or city where the BPR head office is located, within 1 (one) province. The number of branch offices that can be owned is at most 40 (forty) offices, including existing branch offices and those to be opened by the BPR. Example:
a) BPR "D" with core capital of Rp25,000,000,000.00 (twenty-five billion rupiah) headquartered in Batu City, East Java Province, already has 14 (fourteen) branch offices. BPR "D" can open new branch offices at most 26 (twenty-six) offices in the areas of Batu City, Mojokerto Regency, Pasuruan Regency, and/or Malang Regency in East Java Province. b) BPR "E" with core capital of Rp45,000,000,000.00 (forty-five billion rupiah) headquartered in Batam City, Riau Islands Province, already has 16 (sixteen) branch offices. BPR "E" can open new branch offices at most 24 (twenty-four) offices in the areas of Batam City, Karimun Regency, Lingga Regency, Bintan Regency, and/or Tanjungpinang City, whose areas are separated by sea in Riau Islands Province.
3) BPRKU 3
BPRKU 3 can open BPR Office Networks in the province where the BPR head office is located and in districts or cities in other provinces that border directly with the province where the BPR head office is located. The number of branch offices that can be owned is at most 70 (seventy) offices, including existing branch offices and those to be opened by the BPR. Branch offices of BPRKU 3 that can be opened in other provinces are at most 20% (twenty percent) of the total number of branch offices owned. If the location of the district or city in the other province bordering directly with the province where the BPR head office is located is separated by sea, the opening of BPR branch offices can be done by considering the distance between the landmass of the district or city in the other province that becomes the location of the branch office to be opened and the landmass of the province where the BPR head office is located, at most twice the boundary area in the sea, as regulated in the Minister of Home Affairs Regulation regarding guidelines for clarifying area boundaries. According to the Minister of Home Affairs Regulation in effect at the time this OJK Circular was issued, the determination of area boundaries in the sea is measured from the coastline towards the open sea and/or towards archipelagic waters at most 12 (twelve) nautical miles for provinces. Therefore, BPRs can open Office Networks if the distance between the landmasses of the two provinces separated by sea is at most 24 (twenty-four) nautical miles. Example:
a) BPR "F" with core capital of Rp100,000,000,000.00 (one hundred billion rupiah) headquartered in Magelang Regency, Central Java Province, already has 25 (twenty-five) branch offices in all districts and cities in Central Java Province. If BPR "F" will open new branch offices, the number and area of branch offices that can be opened are at most:
(1) 45 (forty-five) new branch offices in all districts and cities in Central Java Province; or (2) 5 (five) new branch offices in districts or cities in other provinces bordering directly with the province where the BPR head office is located. Districts or cities in other provinces bordering directly with the province where the BPR head office of BPR "F" is located are:
i. Sleman Regency, Kulonprogo Regency, and Gunung Kidul Regency in the Special Region of Yogyakarta Province;
ii. Cirebon Regency, Kuningan Regency, Ciamis Regency, and Banjar City in West Java Province; and
iii. Tuban Regency, Bojonegoro Regency, Ngawi Regency, Magetan Regency, Ponorogo Regency, and Pacitan Regency in East Java Province.
b) BPR "G" with core capital of Rp450,000,000,000.00 (four hundred fifty billion rupiah) headquartered in Surabaya City, East Java Province, already has 30 (thirty) branch offices in all districts and cities in East Java Province and 5 (five) branch offices in Central Java Province. If BPR "G" will open new branch offices, the number and area of branch offices that can be opened are at most:
(1) 35 (thirty-five) new branch offices in all districts and cities in East Java Province; or (2) 2 (two) new branch offices in districts or cities in other provinces bordering directly with the province where the BPR head office is located. Districts or cities in other provinces bordering directly with the province where the BPR head office of BPR "G" is located are:
i. districts in Central Java Province bordering by land, namely Rembang Regency, Blora Regency, Grobogan Regency, Sragen Regency, Karanganyar Regency, and Wonogiri Regency; and
ii. districts in Bali Province bordering by sea (Bali Strait) with a distance of less than 24 (twenty-four) nautical miles, namely Buleleng Regency and Jembrana Regency.
b. Relocation of Office Addresses
Relocation of addresses of existing Office Networks of BPRKU 1 and BPRKU 2 prior to the effective date of POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital can be done in the same district or city as the Office Network relocating its address, or as regulated in Article 13 and Article 14 of POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital. Example:

1. BPR "H" with core capital of Rp5,000,000,000.00 (five billion rupiah) headquartered in Blitar City and already having 1 (one) branch office in Blitar Regency prior to the effective date of POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital. BPR "H" can relocate the address of its head office to Kediri City or relocate the address of its branch office in Blitar Regency to Blitar City.
2. BPR "I" with core capital of Rp16,000,000,000.00 (sixteen billion rupiah) headquartered in Kebumen Regency and already having a branch office in Purworejo Regency prior to the effective date of POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital. BPR "I" can relocate the address of its branch office in Purworejo Regency to Kebumen Regency or to a district bordering directly with the head office, namely Cilacap Regency, Banjarnegara Regency, Wonosobo Regency, and Banyumas Regency.

3. Determination of the Number of BPR Branch Offices
   The OJK has the authority to determine individual BPR branch office numbers different from those referred to in Article 13, Article 14, and Article 15 of POJK Business Activities and Office Network Area of Rural Banks Based on Core Capital, including the distance of Office Network opening in other provinces separated by land or sea, which differs from the distance referred to in item 2.a.3), based on certain considerations founded on:
   a. span of control capability; b. healthy competition, expansion of financial access for low-income and productive communities (financial inclusion);
   c. efforts to distribute development in regions; and/or
   d. development of individual branch office business activities in the future so that the BPR can develop and operate sustainably.

4. Regional Expansion
   In the event of regional expansion causing BPR branch offices and head offices to be located in different provinces, the BPR Office Network can continue to operate in the original area unless the BPR experiences a change to a lower BPRKU group, which results in adjustments to the Office Network area.

Example:
Rural Bank “J” with core capital of Rp35,000,000,000.00 (thirty-five billion rupiah), headquartered in City X, South Sulawesi Province, and having a branch office in District Z, which is a district resulting from splitting and located in South Sulawesi Province. The office network of Rural Bank “J” may continue to operate in District Z, South Sulawesi Province, unless Rural Bank “J” experiences a decline in core capital to become a Low Capital Rural Bank (BPRKU) 1.

5. Office Networks of Rural Banks Resulting from Mergers and Consolidations
   a. Office networks of Rural Banks that, at the time the POJK on Business Activities and Office Networks of Rural Banks Based on Core Capital takes effect, are located outside the permitted area according to the Low Capital Rural Bank (BPRKU) classification may continue to operate without having to adjust their area, unless the Rural Bank experiences a decline to a lower BPRKU group. The number of office networks that may continue to operate after the merger or consolidation is adjusted based on the business analysis of the resulting Rural Bank. b. The provisions as mentioned in letter a also apply to office networks of Rural Banks resulting from mergers or consolidations as long as they are located in the same province, as follows:

1. In the event that the Rural Bank resulting from the merger or consolidation is included in the BPRKU 1 group, office networks that existed before the POJK on Business Activities and Office Networks of Rural Banks Based on Core Capital takes effect and are located outside the permitted area according to the BPRKU may continue to operate without relocation or closure as long as the resulting Rural Bank meets the minimum core capital requirements according to the stages referring to the Financial Services Authority regulations regarding minimum capital provision obligations and minimum core capital fulfillment for Rural Banks.
2. In the event that the Rural Bank resulting from the merger or consolidation is included in the BPRKU 2 group, office networks that existed before the POJK on Business Activities and Office Networks of Rural Banks Based on Core Capital takes effect and are located outside the permitted area according to the BPRKU may continue to operate without relocation or closure as long as the resulting Rural Bank does not experience a decline in the BPRKU group.

Example:

1. Rural Bank “K” in the BPRKU 1 group, headquartered in Limapuluh Kota District, West Sumatra Province, and having a branch office in Limapuluh Kota District, merges with Rural Bank “L” in the BPRKU 1 group, headquartered in Pariaman City, and having a branch office in Padangpariaman District.
   The result of the merger of these two Rural Banks is Rural Bank “M” in the BPRKU 1 group, headquartered in Limapuluh Kota District. The branch offices owned by Rural Bank “K” and Rural Bank “L” before the POJK on Business Activities and Office Networks of Rural Banks Based on Core Capital takes effect may continue to operate in their original district areas as branch offices of Rural Bank “M” even though they are located in several different districts.
2. Rural Bank “N” in the BPRKU 2 group, headquartered in Kupang City, East Nusa Tenggara Province, and having a branch office in South Timor Tengah District, merges with Rural Bank “O” in the BPRKU 2 group, headquartered in East Sumba District, and having a branch office in the same district. The result of the merger of these two Rural Banks is headquartered in Kupang City. In the event that Rural Bank “O” becomes a branch office of the resulting Rural Bank, the branch office of Rural Bank “N” in South Timor Tengah District and the branch office of Rural Bank “O” in East Sumba District, which existed before the POJK on Business Activities and Office Networks of Rural Banks Based on Core Capital takes effect and will be maintained as branch offices, the resulting Rural Bank’s branch offices may continue to operate in South Timor Tengah District and East Sumba District even though these two areas are not adjacent districts or cities.
   c. Several Rural Banks located in different provinces may merge or consolidate into one Rural Bank with office network limitations in the province of the headquarters location and in districts or cities in other provinces that are directly adjacent to the province of the Rural Bank’s headquarters location, as long as the resulting Rural Bank from the merger or consolidation meets the Core Capital amount for the BPRKU 3 group.

IX. TREATMENT FOR RURAL BANKS EXPERIENCING A DECLINE IN CORE CAPITAL

1. Fulfillment of Core Capital Amount Requirements for Original Rural Bank (BPRKU)
   a. Rural Banks that experience a decline in Core Capital for 6 (six) consecutive months, thereby failing to meet the Core Capital requirements for their original BPRKU and must be classified into a lower BPRKU group, must submit an action plan to fulfill the Core Capital amount requirements for their original BPRKU to the Financial Services Authority, no later than the end of the 8th month since the decline in Core Capital occurred. The action plan to fulfill the Core Capital amount requirements for the original BPRKU follows the format of Appendix VII.1, which is an integral part of this Financial Services Authority Circular.

Example:
Rural Bank “P” in the BPRKU 2 group with Core Capital of Rp15,500,000,000.00 (fifteen billion five hundred million rupiah) experiences a decline in Core Capital to Rp14,000,000,000.00 (fourteen billion rupiah) for 6 (six) consecutive months from July to December, so Rural Bank “P” is required to submit an action plan to fulfill the BPRKU 2 Core Capital amount requirements no later than the end of February of the following year.

b. The action plan to fulfill the Core Capital amount requirements for the original BPRKU as mentioned in letter a must at least describe:

1. the cause of the decline in Core Capital; and
2. concrete efforts or steps and stages to fulfill the Core Capital amount requirements according to the original BPRKU;
   and/or
3. other matters that need to be informed to the Financial Services Authority.

c. In order to grant approval, the Financial Services Authority examines the submitted action plan documents and assesses the reasonableness of the action plan to fulfill the Core Capital amount requirements for the original BPRKU as mentioned in letter b.

d. The Financial Services Authority issues an approval letter regarding the submission of the action plan no later than 10 (ten) working days since the action plan is received by the Financial Services Authority. This time limit does not include the time given to the Rural Bank to complete or correct the action plan.

e. In the event that the action plan to fulfill the Core Capital amount requirements for the original BPRKU submitted by the Rural Bank:

1. is assessed as needing correction, the Financial Services Authority may request the Rural Bank to adjust the action plan no later than 5 (five) working days since the date of the Financial Services Authority’s notification letter; or
2. is approved by the Financial Services Authority, the Rural Bank executes the completion of the action plan no later than 1 (one) year since the date of the Financial Services Authority’s approval letter.

f. The Rural Bank submits quarterly reports on the realization of fulfilling the Core Capital amount requirements for the original BPRKU to the Financial Services Authority.

g. Rural Banks that have obtained approval for the action plan as mentioned in letter e number 2):

1. may continue to conduct Business Activities that have been conducted, including conducting new transactions with customers, as long as the Rural Bank can realize the stages of fulfilling Core Capital as contained in the action plan; or
2. are not permitted to offer, sell, and/or enter into new agreements or transactions with customers, including opening office networks, until the original Core Capital is fulfilled, in the event that the Rural Bank cannot execute the stages of fulfilling Core Capital as contained in the action plan.

Example:
Rural Bank “Q” in the BPRKU 2 group conducting Business Activities as an ATM Card issuer or Electronic Money issuer experiences a decline in core capital to BPRKU 1 starting from January 2018. In the event that Rural Bank “Q” cannot execute the stages of fulfilling Core Capital as per the action plan approved by the Financial Services Authority, Rural Bank “Q” must cease issuing new ATM Cards or Electronic Money to customers in the following quarter.

h. Rural Banks that do not submit the action plan to fulfill the Core Capital amount requirements for the original BPRKU until the time limit as mentioned in letter a has expired, must adjust all Business Activities and/or Office Networks according to the Business Activities and/or Office Networks of the lower-level BPRKU.

2. Adjustment of Business Activities and/or Office Networks
   a. Rural Banks are required to adjust all Business Activities and/or Office Networks according to the lower level in the event that the Rural Bank cannot complete the action plan as mentioned in Article 21 paragraph (5) of the POJK on Business Activities and Office Networks of Rural Banks Based on Core Capital.

b. Rural Banks are classified into a lower BPRKU group if they meet the conditions as mentioned in Roman numeral I number 6.

c. The adjustment of Business Activities and/or Office Networks to a lower BPRKU group also applies to:

1. BPRKU 1 that experiences a decline in Core Capital to less than Rp6,000,000,000.00 (six billion rupiah), thereby failing to meet the requirements as an ATM Card issuer and the number of office networks opened becomes at most 20 (twenty) branch offices; and
2. BPRKU 3 that experiences a decline in Core Capital to less than Rp100,000,000,000.00 (one hundred billion rupiah), thereby failing to meet the requirements to conduct Business Activities as a Laku Pandai (Inclusive Financial Services) organizer.

d. The Financial Services Authority issues a notification letter to Rural Banks that cannot complete the action plan to fulfill the Core Capital amount requirements for the original BPRKU after the action plan completion time limit has expired, to immediately adjust all Business Activities and/or Office Networks according to the activities of the lower-level BPRKU.

e. The Financial Services Authority may request Rural Banks to submit a plan to adjust Business Activities and/or Office Networks no later than 1 (one) month since the date of the Financial Services Authority’s notification letter as mentioned in letter d.

f. The adjustment of Business Activities and/or Office Networks as mentioned in letter e is carried out within a time limit of no later than 1 (one) year since the end date of executing the action plan to fulfill the Core Capital amount requirements for the original BPRKU.

g. The adjustment of Business Activities as mentioned in letter f is the cessation of Business Activities permitted for BPRKU before experiencing a decline in Core Capital. Meanwhile, the adjustment of the Rural Bank’s Office Network is the closure or relocation of branch offices to meet the number of branch offices and Office Network area permitted for BPRKU after experiencing a decline in Core Capital.

h. The adjustment of Business Activities during the time limit as mentioned in letter f is carried out by the Rural Bank by ceasing the offer, sale, and/or agreements or new transactions for Business Activities permitted for the Rural Bank before experiencing a decline in Core Capital.

Example:
Rural Bank “R” in the BPRKU 3 group conducting Business Activities in the form of ATM Card issuer or Electronic Banking service provider experiences a decline in Core Capital to BPRKU 2 starting from January 2018. In the event that Rural Bank “R” cannot complete the action plan to fulfill Core Capital for the original BPRKU until the end of August 2019, then starting from early September 2019, Rural Bank “R” must cease offering new ATM Cards and providing ATM Card or Electronic Banking services, including to existing customers, and submit a report on Business Activity adjustments no later than the end of August 2020.

i. In the event that the Rural Bank increases paid-in capital during the Business Activity adjustment and/or Office Network time limit, the process of ceasing Business Activities and/or closing Rural Bank office networks continues. In the event that, based on the increase in paid-in capital, the Rural Bank has met the Core Capital requirements for the original BPRKU or higher and the Rural Bank will conduct Business Activities that were ceased or open office networks that were closed, the Rural Bank must reapply for approval or licensing for Business Activities and/or office network opening after the cessation and/or closure process is completed and reported to the Financial Services Authority.

j. Procedures and methods for ceasing Business Activities refer to relevant laws and regulations, including for Rural Bank Business Activities requiring permits from relevant authorities. In the event that the licensing of Business Activities to be adjusted by the Rural Bank is the authority of other authorities or agencies, the Rural Bank notifies such authorities or agencies regarding the Financial Services Authority’s notification letter on the cessation of Business Activities, with a copy to the Financial Services Authority.

k. During the adjustment time limit as mentioned in letter f, the Rural Bank carries out the process of closing or relocating branch offices to meet the number of branch offices and Office Network area permitted for BPRKU after experiencing a decline in Core Capital.

Example:
Rural Bank “T” in the BPRKU 3 group having 45 (forty-five) branch offices with Office Network areas up to districts or cities directly adjacent to the province of the headquarters location experiences a decline in Core Capital to a lower BPRKU starting from January 2018. In the event that Rural Bank “T” cannot complete the action plan to fulfill Core Capital until the end of August 2019, starting from early September 2019, Rural Bank “T” must close or relocate branch offices to match the number and Office Network area of the BPRKU after experiencing a decline in Core Capital.

l. Procedures and mechanisms for adjusting and closing Office Networks as mentioned in letter k refer to Financial Services Authority regulations regarding Rural Banks.

m. After the time limit for adjusting Business Activities and/or Office Networks that do not match the BPRKU has ended, the Rural Bank submits a realization report on the adjustment of Business Activities and/or Office Networks which must at least contain:

1. Business Activities
   a) Business Activities that are ceased, accompanied by information including nominal value (outstanding), number of customers or service users, longest remaining term (if any) for each Business Activity that is ceased; b) final completion time for Business Activities that do not match the BPRKU group; and c) proof of communication or notification to customers or stakeholders regarding the cessation of Business Activities, in the form of letters or announcements containing information and steps that can be taken by customers or the public regarding the ceased Business Activities; and/or d) other matters that need to be informed to the Financial Services Authority.
2. Office Networks
   a) adjustment of Office Network area according to the lower BPRKU group; b) closure of branch offices according to the number of branch offices permitted for the lower BPRKU group; c) adjustment of other Office Networks affiliated with the aforementioned branch offices; d) implementation time for adjusting and/or closing Office Networks that do not match the BPRKU; and e) proof of communication or notification to customers or stakeholders regarding the adjustment of area and closure of Office Networks, in the form of letters or announcements containing information and steps that can be taken by customers or the public regarding the closure of Office Networks; and/or f) other matters that need to be informed to the Financial Services Authority. The format of the realization report on the adjustment of Business Activities and/or Office Networks follows Appendix VII.2, which is an integral part of this Financial Services Authority Circular.

X. SUBMISSION OF APPLICATIONS, REPORTS, AND ACTION PLANS
Applications for approval to conduct Business Activities, reports on the implementation of Business Activities, and submissions of action plans are addressed to:

Signed,
Yuliana

1. Regional Office of the Financial Services Authority, for Rural Banks headquartered in the working area of the Regional Office of the Financial Services Authority; or
2. Office of the Financial Services Authority, for Rural Banks headquartered in the working area of the Office of the Financial Services Authority.

XI. CLOSING
At the time this Financial Services Authority Circular takes effect, Bank Indonesia Circular Number 9/38/DPBPR regarding Procedures for Licensing and Reporting for Rural Banks and Sharia Rural Banks Conducting Business Activities as Foreign Currency Merchants is declared not applicable to Rural Banks. Provisions in this Financial Services Authority Circular take effect on the date of establishment. Established in Jakarta on July 19, 2017 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, Signed, NELSON TAMPUBOLON

A copy consistent with the original,
Director of Legal Affairs I
Legal Department,
Signed,
Yuliana

APPENDIX I
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORKS OF RURAL BANKS BASED ON CORE CAPITAL

No. BUSINESS ACTIVITY DESCRIPTION

1. Fund Collection
   a. Time Deposits
   Deposits that can only be withdrawn at a specific time based on an agreement between the depositor and the Rural Bank. b. Savings Deposits that can only be withdrawn according to certain agreed terms, but cannot be withdrawn using checks, giro orders, and/or other instruments equivalent to those.
   c. Accepted Loans
   Loans received from other banks or third parties who are not banks and originate from within the country.
2. Fund Disbursement
   Providing credit to other parties in the form of providing funds or claims that can be equated to those, based on loan-borrower agreements between the Rural Bank and other parties, obligating the borrower to repay their debt after a certain period with the provision of interest.
3. Fund Placement
   a. Current Accounts
   Placing funds in commercial banks and Sharia commercial banks in the form of current accounts. b. Time Deposits Placing funds in commercial banks, Sharia commercial banks, Rural Banks, and/or Sharia Rural Banks in the form of time deposits.
   c. Certificates of Deposit
   Placing funds in commercial banks and/or Sharia commercial banks in the form of certificates of deposit. d. Savings Placing funds in commercial banks, Sharia commercial banks, Rural Banks, and/or Sharia Rural Banks in the form of savings. e. Bank Indonesia Certificates Placing funds in the form of Bank Indonesia Certificates.
4. Foreign Currency Exchange
   Business activity of exchanging foreign currency by conducting the sale and purchase of foreign paper money (banknotes) and purchasing travelers’ checks that have met regulations and requirements.
5. Supporting Business Activities
   a. Office-less Financial Service Agents for Inclusive Finance (Laku Pandai) The Rural Bank acts as an agent or party cooperating with the Laku Pandai organizing bank as the bank’s extension to provide banking services to the community in the context of inclusive finance as agreed. b. Laku Pandai (Inclusive Financial Services) Organizers The Rural Bank acts as an organizer of banking services and/or other financial services conducted not through office networks, but through cooperation with other parties and supported by the use of information technology facilities.
   c. Phone Banking
   Services for banking transactions by contacting the Rural Bank’s service number via telephone. d. SMS Banking Banking information or transactions accessible directly via mobile phones using Short Message Service (SMS). e. Mobile Banking Services for conducting banking transactions via mobile phones. f. Internet Banking Services for conducting banking transactions via the internet for Rural Banks that are Laku Pandai organizing banks. g. Payroll Payments for Rural Bank Customers Services for customers to conduct mass payroll payments to employees who are customers of the Rural Bank. h. Limited Fund Transfers Receiving Remittances from Abroad Cooperative transfer activities limited to receiving remittances (incoming transfers) from abroad with commercial banks and/or Indonesian legal entity non-bank companies conducting fund transfer activities. Payment to recipients (beneficiaries) can only be done in Rupiah, and the Rural Bank does not bear currency risk.
   i. ATM Card Issuers
   Rural Banks that have obtained permits to issue payment instruments using cards that can be used for cash withdrawals and/or fund transfers, so that the cardholder’s obligations are fulfilled immediately by directly reducing the cardholder’s deposits at the Rural Bank. j. Debit Card Issuers Rural Banks that have obtained permits to issue payment instruments using cards that can be used to pay for obligations arising from economic activities, including shopping transactions, so that the cardholder’s obligations are fulfilled immediately by directly reducing the cardholder’s deposits at the Rural Bank. k. Electronic Money Issuers Rural Banks act as parties that have obtained permits to issue Electronic Money.
   l. Marketing Electronic Money from Other Issuers
   Rural Banks act as parties cooperating with Electronic Money issuers to market Electronic Money. m. Fund Transfers via Commercial Bank Accounts Provision of fund transfer services for the benefit of the Rural Bank itself or customers through the Rural Bank’s accounts at commercial banks conducting final settlement activities, as referred to in relevant laws and regulations regarding fund transfers. n. Cooperation with Insurance Companies to Refer Insurance Products to Customers Related to Rural Bank Products Activities of cooperating to refer insurance products that are requirements to obtain certain Rural Bank products to customers. The Rural Bank must offer insurance product choices from at least 3 (three) partner insurance companies, one of which may be a Related Party of the Rural Bank. Referenced insurance products are limited to protection or coverage insurance products, and such insurance products are requirements to obtain certain Rural Bank products for customers. o. Trust Funds for Bill Payment Service Provision Activities of receiving trust funds for bill payment services such as electricity, telephone, water, and tax payments.

Established in Jakarta on July 19, 2017
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
Signed,
NELSON TAMPUBOLON

APPENDIX II
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORKS OF RURAL BANKS BASED ON CORE CAPITAL

BUSINESS ACTIVITIES THAT CAN BE PERFORMED
BY EACH BPRKU
No. BUSINESS
ACTIVITY
BPRKU
BPRKU
BPRKU
PERMISSION/APPROVAL
OR REPORT

1. Fund Collection
   a. Time Deposits
   ✓ ✓ ✓ b. Savings ✓ ✓ ✓
   c. Other forms
   equivalent to time deposits or savings
   ✓ ✓ ✓ Approval d. Loans
   Received
   ✓ ✓ ✓
2. Fund Distribution ✓ ✓ ✓
3. Fund Placement
   a. Current Accounts ✓ ✓ ✓ b. Time Deposits ✓ ✓ ✓
   c. Certificates of
   Deposit
   ✓ ✓ ✓ d. Savings ✓ ✓ ✓ e. Bank Indonesia
   Certificates
   ✓ ✓ ✓
4. Foreign Currency
   Exchange
   ✓ ✓ Approval
5. Supporting Business Activities
   a. Laku Pandai Agent
   ✓ ✓ ✓ Report b. Laku Pandai
   Organizer
   ✓ a) Approval
   c. Phone Banking
   ✓
   Approval and/or
   Permission d. SMS Banking
   ✓
   Approval and/or
   Permission e. Mobile Banking
   ✓
   Approval and/or
   Permission f. Internet
   Banking
   ✓ b)
   Approval and/or
   Permission g. Salary Payment for BPR Customers ✓ ✓ ✓ Report

No. BUSINESS
ACTIVITY
BPRKU
BPRKU
BPRKU
PERMISSION/APPROVAL
OR REPORT h. Limited fund transfer limited to receipt of remittances from abroad ✓ ✓ ✓ Approval
i. ATM Card
Issuer
✓ c) ✓ ✓ Approval and Permission j. Debit Card Issuer ✓ ✓ Approval and Permission k. Electronic Money Issuer ✓ ✓ Approval and Permission
l. Marketing
Electronic Money from other issuers
✓ ✓ ✓ Report m. Fund transfer through BPR accounts at commercial banks ✓ ✓ ✓ Report n. Cooperation with insurance companies to refer insurance products to customers related to BPR products ✓ ✓ ✓ Report o. Fund deposits in the context of payment service provision ✓ ✓ ✓ Report

signed
Yuliana
Notes:
: Does not require permission or approval.
: Not permitted. a) Minimum core capital requirements for BPRs organizing Laku Pandai refer to regulations governing branchless financial services in the context of inclusive finance (Laku Pandai). b) Specifically for BPRs that are Laku Pandai organizing banks. c) Specifically for BPRKU 1 having minimum core capital of Rp6,000,000,000.00 (six billion rupiah). Established in Jakarta on 19 April 2017 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, signed NELSON TAMPUBOLON

APPENDIX III
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORK AREAS
OF RURAL CREDIT BANKS BASED ON CORE CAPITAL

Appendix III.1
(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Request for Approval for Implementation/Development ) of Business Activities Referring to Article 6 paragraph (1) of Financial Services Authority Regulation Number 12/POJK.03/2016 concerning Business Activities and Office Network Areas of Rural Credit Banks Based on Core Capital, we hereby submit a request for approval for the implementation/development ) of Business Activities consisting of ……… which is planned to be implemented starting from ……………… To complete the aforementioned request, we enclose supporting documents as required by the attached checklist. This is our request. BPR Board of Directors, <Signature> Name Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.
) Adjust according to the submitted request.

DOCUMENT CHECKLIST FOR REQUEST FOR APPROVAL FOR IMPLEMENTATION/DEVELOPMENT OF NEW BUSINESS ACTIVITIES No. Document Yes No Notes

1. Type and general description of Business
   Activities, including:
   a. product name and features or functions offered; and b. information regarding the Business Activity scheme to be implemented.
2. Implementation time of the new Business
   Activity, namely the first date the
   Business Activity is launched to customers.
3. Purpose of the new Business Activity, including
   customer segments and expected benefits from the implementation of the new Business Activity for customers.
4. Relevance of the new Business Activity
   to BPR business strategy, containing an explanation regarding:
   a. support and benefits of implementing the new Business Activity towards improving performance and achieving BPR business targets as stated in the BPR Business Plan; and b. business analysis for at least 2 (two) years including transaction value targets and costs for the implementation of the new Business Activity for BPR.
5. Risks from the implementation of the new
   Business Activity, including results of analysis from identification, measurement, and monitoring of at least credit risk, operational risk, compliance risk, and liquidity risk.
6. Risk mitigation for the implementation of the
   new Business Activity, which includes efforts or policies to control risks that will arise from the implementation of the new Business Activity.
7. a. In the event the request is submitted
   for the first time, supporting documents are included, including:

1. policies and procedures related
   to the implementation of AML and CFT programs;
2. evidence of operational readiness,
   including related to implementation procedures (standard operating procedures) and provision of supporting infrastructure;
3. evidence of readiness of cooperation
   agreements with third parties or partners, for Business Activities involving third parties;
4. accounting information system
   including a brief explanation regarding the relevance of the accounting information system to the BPR's accounting information system as a whole;
5. organizational structure and
   availability and readiness of human resources handling the Business Activity submitted;

6. documents or draft documents
   supporting transparency aspects in providing information to customers regarding the implementation of the new Business Activity;

7. information technology infrastructure readiness documents, related
   to the implementation of
   Business Activities supported by information technology; b. In the event the request is submitted in the context of developing Business Activities, supporting documents are included, including:
8. evidence of operational readiness,
   including related to implementation procedures (standard operating procedures) and provision of supporting infrastructure;
9. evidence of readiness of cooperation
   agreements with third parties or partners, for Business Activities involving third parties.
   This checklist is prepared completely and correctly to be submitted to the Financial Services Authority in the context of a request for implementation/development of new Business Activities. (Place), (date, month, year) (BPR Board of Directors) Notes:
10. Checklists numbers 1 through 6 must be submitted by BPR both at the time of
    the first request for implementation of business activities and requests in the context of developing business activities.

EXAMPLE OF SUBMISSION OF INFORMATION AND EXPLANATIONS REGARDING IMPLEMENTATION/DEVELOPMENT OF BUSINESS ACTIVITIES BPR Name : ……………… Address : ……………… Regency/City : ………………

1. Type and Description of Business Activities
   (Describing regarding (i) type of Business Activity to be performed, e.g.
   ATM card issuer, debit card issuer, or provider of Electronic Banking services such as SMS banking, (ii) product or service name, (iii) features or functions owned by the Business Activity, and (iv) Business Activity scheme)
2. Planned Implementation Time of Business Activities
   (Describing regarding the first date the product is launched to the public or customers, including the time period in case there is a plan for cooperation with third parties or expansion of service provision of Business Activities)
3. Purpose of Implementation of Business Activities
   (Describing regarding the purpose of implementing Business Activities including expected targets)
4. Relevance of New Business Activities to Business Strategy
   (Describing regarding the expected benefits from the implementation of Business Activities towards the business strategy currently being run and support for other products and services offered by BPR)
5. Risks from Implementation of New Business Activities
   (Describing regarding risks that BPR may face from the implementation of new Business Activities including results of analysis from identification, measurement, and monitoring of at least credit risk, operational risk, compliance risk, and liquidity risk)
6. Risk Mitigation for Implementation of New Business Activities
   (Describing anticipatory steps and controls over risks that BPR may face) Notes:
   More detailed explanations can be included in separate sheets.

signed
Yuliana
Appendix III.2
(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Report on Realization of Implementation of Business Activities Referring to our previous letter Number ……………… subject ……………… ) Financial Services Authority Circular Number ……………… subject ……………… *) , and letter from .................. Number .............. subject ............... (attached) ) with this we report that the implementation of Business Activities consisting of ……………… has started on date ……………… This is for your information. BPR Board of Directors, <Signature> Name Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.
) Request letter for approval previously submitted by BPR.
*) Approval letter previously issued by the Financial Services Authority.
) License from relevant authorities in the event the implementation of Business Activities requires a license from the said authority.
Established in Jakarta on 19 July 2017
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signed
NELSON TAMPUBOLON

APPENDIX IV
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORK AREAS
OF RURAL CREDIT BANKS BASED ON CORE CAPITAL

(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Report on Implementation of New Business Activities Referring to Article 6 paragraph (2) of Financial Services Authority Regulation Number 12/POJK.03/2016 concerning Business Activities and Office Network Areas of Rural Credit Banks Based on Core Capital, we hereby submit a report on the implementation of new Business Activities consisting of ……… ) which has been implemented on ……… For your information, we enclose explanations regarding the implementation of such Business Activities and supporting documents as attached. This report is hereby submitted. BPR Board of Directors, <Signature> Name Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.
) Name or type of business activity that has been implemented.

signed
Yuliana
EXAMPLE OF SUBMISSION OF INFORMATION AND EXPLANATIONS REGARDING REPORT ON IMPLEMENTATION OF NEW BUSINESS ACTIVITIES BPR Name : ……………… Address : ……………… Regency/City : ………………

1. Type and Description of Business Activities
   (Describing regarding (i) type of Business Activity performed, e.g. becoming a Laku Pandai agent or cooperation to reference products with insurance companies, (ii) product or service name, (iii) features or functions owned by the Business Activity, and (iv) Business Activity scheme.
2. Implementation Time of Business Activities
   (Describing regarding the first date the product is launched to the public and/or offered to customers, including plans for cooperation or expansion of Business Activity services if any).
3. Purpose of Implementation of Business Activities
   (Describing regarding the purpose of implementing Business Activities including expected targets).
4. Relevance of New Business Activities to Business Strategy
   (Describing regarding the expected benefits from the implementation of Business Activities towards the business strategy currently being run and support for other products and services offered by BPR)
5. Other Information related to Implementation of Business Activities 1)
   (Describing other information related to Business Activities performed by BPR, e.g. information regarding insurance companies including clarity of responsibility of each party in fulfilling AML and CFT obligations, for BPRs performing Business Activities cooperation with insurance companies) Notes:

1. Information and/or supporting documents can be included in separate sheets,
   if any.
   Established in Jakarta on 19 July 2017
   EXECUTIVE HEAD OF BANKING SUPERVISOR
   FINANCIAL SERVICES AUTHORITY, signed
   NELSON TAMPUBOLON

APPENDIX V
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORK AREAS
OF RURAL CREDIT BANKS BASED ON CORE CAPITAL

Appendix V.1
PERIODIC REPORT
Foreign Currency Exchange - Foreign Banknotes (Banknotes) BUSINESS ACTIVITIES REPORT FOREIGN BANKNOTE (FBN)/BANKNOTES SALES AND PURCHASE TRANSACTIONS
PT/PD/KOP BPR .............
PERIOD ……………
No. Type
Currency
Opening Balance FBN (A) Purchase (B) Sale (C) Closing Balance FBN (D) Total Amount Middle Rate Total FBN Rp FBN Rp USD*) FBN Rp USD*) FBN Rp (a) (b) (c) (d) (e) = (c) x Z (f) (g) (h) = (f) x Z (i) = (a)+(c)-(f) (j) = Q (k) = (i) x (j) 1 AUD - - - - - - - - 2 BND - - - - - - - - 3 CAD - - - - - - - - 4 CHF - - - - - - - - 5 DKK - - - - - - - - 6 GBP - - - - - - - - 7 HKD - - - - - - - - 8 JPY - - - - - - - - 9 MYR - - - - - - - - 10 NOK - - - - - - - - 11 NZD - - - - - - - - 12 PGK - - - - - - - - 13 PHP - - - - - - - - 14 SEK - - - - - - - - 15 SGD - - - - - - - - 16 THB - - - - - - - - 17 USD - - - - - - - - 18 EUR - - - - - - - - 19 AED - - - - - - - - 20 BHD - - - - - - - - 21 BRL - - - - - - - - 22 CLP - - - - - - - - 23 CNY - - - - - - - - 24 CZK - - - - - - - - 25 EGP - - - - - - - - 26 INR - - - - - - - - 27 IRR - - - - - - - - 28 KRW - - - - - - - - 29 KWD - - - - - - - - 30 MXN - - - - - - - - 31 OMR - - - - - - - - 32 JOD - - - - - - - - 33 QAR - - - - - - - - 34 RUB - - - - - - - - 35 SAR - - - - - - - - 36 SDG - - - - - - - - 37 TWD - - - - - - - - 38 VND - - - - - - - - 39 YER - - - - - - - - 40 ZAR - - - - - - - - 41 ... - - - - - - - - Total - - - (c) Total purchase of FBN transacted in the relevant month (d) Total purchase of FBN in rupiah transacted in the relevant month (e) Result of conversion of nominal purchase of FBN in USD currency (f) Total sale of FBN transacted in the relevant month (g) Total sale of FBN in rupiah transacted in the relevant month (h) Result of conversion of nominal sale of FBN in USD currency *) Conversion of each currency to USD based on calculation of middle rate obtained from Bank Indonesia transaction rates at the end of each month. Middle transaction rate = (BI sell transaction rate + BI buy transaction rate) In the event the currency type is not in the Bank Indonesia transaction rate list, the middle rate applicable at the BPR performing foreign currency exchange activities (FCEA) at the end of the month is used. Middle transaction rate = (FCEA BPR sell transaction rate + FCEA BPR buy transaction rate)

PERIODIC REPORT
Foreign Currency Exchange – Traveller’s Cheque (TC) BUSINESS ACTIVITIES REPORT TRAVELLER’S CHEQUE (TC) PURCHASE TRANSACTIONS
PT/PD/KOP BPR .............
PERIOD ……………
No. Type
Currency
Opening Balance TC (A) Purchase (B) Redemption (C) Closing Balance TC (D) Total Amount Middle Rate Total TC Rp TC Rp USD*) TC Rp USD*) TC Rp (a) (b) (c) (d) (e) = (c) x Z (f) (g) (h) = (f) x Z (i) = (a)+(c)-(f) (j) = Q (k) = (i) x (j) 1 AUD - - - - - - - - 2 BND - - - - - - - - 3 CAD - - - - - - - - 4 CHF - - - - - - - - 5 DKK - - - - - - - - 6 GBP - - - - - - - - 7 HKD - - - - - - - - 8 JPY - - - - - - - - 9 MYR - - - - - - - - 10 NOK - - - - - - - - 11 NZD - - - - - - - - 12 PGK - - - - - - - - 13 PHP - - - - - - - - 14 SEK - - - - - - - - 15 SGD - - - - - - - - 16 THB - - - - - - - - 17 USD - - - - - - - - 18 EUR - - - - - - - - 19 AED - - - - - - - - 20 BHD - - - - - - - - 21 BRL - - - - - - - - 22 CLP - - - - - - - - 23 CNY - - - - - - - - 24 CZK - - - - - - - - 25 EGP - - - - - - - - 26 INR - - - - - - - - 27 IRR - - - - - - - - 28 KRW - - - - - - - - 29 KWD - - - - - - - - 30 MXN - - - - - - - - 31 OMR - - - - - - - - 32 JOD - - - - - - - - 33 QAR - - - - - - - - 34 RUB - - - - - - - - 35 SAR - - - - - - - - 36 SDG - - - - - - - - 37 TWD - - - - - - - - 38 VND - - - - - - - - 39 YER - - - - - - - - 40 ZAR - - - - - - - - 41 ... - - - - - - - - Total - - - (c) Total purchase of TC transacted in the relevant month (d) Total purchase of TC in rupiah transacted in the relevant month (e) Result of conversion of nominal purchase of TC in USD currency (f) Total TC redeemed in the relevant month (g) Total TC redeemed in rupiah in the relevant month (h) Result of conversion of nominal redemption of TC in USD currency *) Conversion of each currency to USD based on calculation of middle rate obtained from Bank Indonesia transaction rates at the end of each month. Middle transaction rate = (BI sell transaction rate + BI buy transaction rate) In the event the currency type is not in the Bank Indonesia transaction rate list, the middle rate applicable at the BPR performing foreign currency exchange activities (FCEA) at the end of the month is used. Middle transaction rate = (FCEA BPR sell transaction rate + FCEA BPR buy transaction rate)

Appendix V.2
GUIDELINES FOR PREPARING REPORTS
ON FOREIGN CURRENCY EXCHANGE BUSINESS ACTIVITIES
I. Foreign Banknotes (FBN)/Banknotes and Traveller’s Cheque (TC)
Mutation Book or Card
The purpose of the FBN and TC Mutation Book is to know the amount of opening balance, purchase, sale or redemption, and closing balance of FBN and TC. To facilitate management, the Mutation Book can also be in the form of a card. The recording method for the FBN and TC Mutation Book or Card is as follows:
a. each type of FBN and TC currency is made into a separate book or card mutation; b. at the beginning of the month or fiscal year, the opening balance of FBN and TC is recorded, taken from the closing balance of the previous period's balance sheet;
c. during the fiscal year, purchase estimates are recorded for
FBN and TC purchases, and sale or redemption estimates are recorded for FBN or TC sales or redemptions; d. at the end of the month or fiscal year, the closing balance of FBN and TC is recorded. Below is an example of the FBN and TC Mutation Book or Card. FBN or TC Mutation Book or Card Date Description Purchase Sale/Redemption Balance FBN/TC Rate Book Balance Rp FBN/TC Rate Rp FBN/TC Rate Rp 2 January 2018 Opening Balance (a) xxx (b) … Purchase xxx … Sale xxx 31 January 2018 Closing Balance (c) (d) xxx*) ) (e) *) Book rate at closing balance is obtained by dividing opening balance Rp (b) and purchase Rp (d) by opening balance FBN or TC (a) and purchase FBN or TC (c).

II. FBN and TC Mutation Recapitulation Book
The FBN and TC Mutation Recapitulation Book is used to summarize the opening balance, purchase, sale or redemption, and closing balance of FBN and TC on the reporting date. In relation to the reports required by the Financial Services Authority, conversion into USD is also required for FBN and TC purchases and sales or redemptions of FBN and TC. FBN Business Activities Report Type Currency Opening Balance FBN (A) Purchase (B) Sale (C) Closing Balance FBN (D) Total Amount Middle Rate Total FBN Rp FBN Rp USD *) FBN Rp USD *) FBN Rp (a) (b) ( c ) (d) (e) = (c ) x conversion rate (f) (g) (h) = (f) x conversion rate (i) = ((a) + (c)) – (f) (j) (k) = (i) x (j) USD xxx EUR xxx AUD xxx ... xxx Total xxx *) Rate for conversion to USD is obtained by converting each currency to USD based on calculation of middle rate obtained from Bank Indonesia transaction rates at the end of each month. TC Business Activities Report Type Currency Opening Balance TC (A) Purchase (B) Redemption (C) Closing Balance TC (D) Total Amount Middle Rate Total TC Rp TC Rp USD *) TC Rp USD *) TC Rp (a) (b) ( c ) (d) (e) = (c ) x conversion rate (f) (g) (h) = (f) x conversion rate (i) = ((a) + (c)) – (f) (j) (k) = (i) x (j) USD xxx EUR xxx AUD xxx ... xxx Total xxx *) Rate for conversion to USD is obtained by converting each currency to USD based on calculation of middle rate obtained from Bank Indonesia transaction rates at the end of each month. Middle transaction rate is BI sell transaction rate plus BI buy transaction rate divided by two. Middle transaction rate = (BI sell transaction rate + BI buy transaction rate) If the middle rate is not in BI transaction rates, the sell rate plus buy rate from FCEA BPR can be used divided by two. Middle transaction rate = (FCEA BPR sell transaction rate + FCEA BPR buy transaction rate)

signed
Yuliana
Examples in this appendix are only illustrations and can be adjusted to the conditions of each BPR performing FCEA to achieve fair presentation of financial reports. Established in Jakarta on 19 July 2017 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, signed NELSON TAMPUBOLON

APPENDIX VI
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORK AREAS
OF RURAL CREDIT BANKS BASED ON CORE CAPITAL

Appendix VI.1
(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Plan to Cease Foreign Currency Exchange Business Activities We hereby inform that we plan to cease foreign currency exchange business activities effective from date ……………… with reasons/considerations ……………… In this regard, all foreign currency assets, both foreign banknotes (banknotes) and traveller’s cheques (traveller’s cheque) that we own have been sold or redeemed in rupiah before the date of cessation of business activities. This is for your information. BPR Board of Directors, <Signature> Name Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.

Appendix VI.2
(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Cessation of Foreign Currency Exchange Business Activities We hereby inform that effective from date ……………… we PT/State-Owned Enterprise/Local Government-Owned Enterprise/Cooperative ) BPR ……………… which has its headquarters at ……………… have ceased foreign currency exchange business activities at all our offices and have completed all assets related to foreign currency exchange business activities. This is for your information. BPR Board of Directors, <Signature> Name Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.
) Select one.

signed
Yuliana
Appendix VI.3
(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Cessation of Foreign Currency Exchange Business Activities at Specific Offices We hereby inform that effective from date ……………… we have ceased foreign currency exchange business activities at the head office/branch office ) of our BPR located at:
No.
Head Office/Branch
Office
Address

1. ……………………………… ………………………………………………
2. ……………………………… ………………………………………………
3. ……………………………… ………………………………………………
   ... ……………………………… ……………………………………………… with reasons/considerations ……………………………………………….
   This is for your information.
   BPR Board of Directors, <Signature>

Name
Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.
) Select one.
Established in Jakarta on 19 July 2017
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signed
NELSON TAMPUBOLON

APPENDIX VII
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 45 /SEOJK.03/2017
REGARDING
BUSINESS ACTIVITIES AND OFFICE NETWORK AREAS
OF RURAL CREDIT BANKS BASED ON CORE CAPITAL

Appendix VII.1
(City), (date, month, year)
No. :
Attachment :
To *)
Subject: Action Plan for Fulfillment of Core Capital Requirements at Original BPRKU Referring to Article 21 paragraph (2) of Financial Services Authority Regulation Number 12/POJK.03/2016 concerning Business Activities and Office Network Areas of Rural Credit Banks Based on Core Capital, we hereby enclose an action plan for fulfilling the core capital amount requirements at BPRKU ...... ) This action plan is hereby submitted. BPR Board of Directors, <Signature> Name Notes:
*) Regional Office or local Financial Services Authority Office covering the relevant BPR.
) Fill in according to the original BPRKU group.

FORMAT ACTION PLAN IN THE CONTEXT OF FULFILLING CORE CAPITAL AMOUNT FOR ORIGINAL BPRKU CLASSIFICATION

BPR Name: ………………
Address: ………………
Regency/City: ………………

A. Causes of Core Capital Reduction
…………………………………………………………………………………………………
…………………………………………………………………………………………………

B. Concrete Efforts or Steps and Phases for Fulfilling Core Capital Amount Requirements According to Original BPRKU Classification (in thousands of rupiah)

Source of Fulfillment	Fulfillment Target	3 Months Note
First	Second (3 Months)	Third (3 Months)	Fourth (3 Months)
1. Paid-up Capital (Elaborate regarding information and explanations concerning concrete steps and phases for fulfilling core capital)	Shareholders/New Investors	a. ………
b. ………
c. and so on.
2. Other Capital	a. Capital payment funds
b. Donation capital
c. Profit accumulation
d. Additional core capital e. and others.
Total Increase in Core Capital
---	---	---	---
Total Core Capital

C. Other Information
…………………………………………………………………………………………………
…………………………………………………………………………………………………

Acknowledged,
Board of Commissioners
(Place), (date, month, year)

BPR Board of Directors

Appendix VII.2
(City), (date, month, year)
No. :
Appendix :
To *)
Subject: Report on the Realization of Adjustments to Business Activities and/or Branch Network Offices) Becoming BPRKU ……… *)

In light of the decrease in core capital for PT/Regional Owned Enterprise/Regional Public Enterprise/Cooperative) BPR ……… which was originally classified as BPRKU ……… becoming BPRKU ………, we hereby submit the attached report on the realization of adjustments to Business Activities and/or Branch Network Offices) becoming BPRKU ……… *) . This realization report is hereby submitted. BPR Board of Directors, <Signature> Name

Notes:
*) Regional Office or local Financial Services Authority (OJK) Office having jurisdiction over the relevant BPR.
) Specified with the adjustments made.
*) Specified with the downgrade of the BPR's BPRKU classification.
) Select one.

EXAMPLE FORMAT FOR REPORT ON ADJUSTMENTS TO BUSINESS ACTIVITIES AND/OR BRANCH NETWORK OFFICES

BPR Name: ………………
Address: ………………
Regency/City: ………………

A. Information on Adjustments to Business Activities and/or Branch Network Offices ……………………………………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………………………………………

B. Adjustments to Business Activities

No.	Name of Business Activity	Nominal (Outstanding) 1)	Remaining Timeframe 1)	Adjustment Steps	Notes 2)

C. Adjustments to Branch Network Offices

No.	Name of Network Office	Branch Network Office Area	Number of Customers	Third-Party Funds	Credit	Adjustment Steps	Notes 2)	Total
				Nominal	Number of Accounts	Balance Debit
	KC, KK, and others.	Regency/City, Province

Signed,
Yuliana

Notes:

1. If applicable
2. Contains information including communication or notification to customers or stakeholders

Established in Jakarta on July 19, 2017
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
Signed,
NELSON TAMPUBOLON