Regulatory Alerts2011-01-24
Bank Indonesia Regulation Number 13/5/PBI/2011 Concerning Legal Lending Limit for Islamic Rural Banks
Bank Indonesia issued Regulation Number 13/5/PBI/2011 to establish prudential limits on fund distribution for Islamic Rural Banks (BPRS) to support economic growth while maintaining business soundness. The regulation mandates specific Legal Lending Limits, capping financing to related parties at 10 percent of capital and setting maximums of 20 percent for individual non-related parties and 30 percent for groups. It further defines procedures for reporting, exemptions for secured or government-guaranteed funds, and strict timelines for BPRS to submit action plans and settle any violations or overlimits.
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