Circular Letter of the Financial Services Authority Number 36/SEOJK.03/2015 Concerning Products and Activities of Islamic Commercial Banks and Islamic Business Units

To:

The Board of Directors of Islamic Commercial Banks; and
The Board of Directors of Conventional Commercial Banks that have Islamic Business Units;
In their respective locations.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 36 /SEOJK.03/2015

CONCERNING
PRODUCTS AND ACTIVITIES OF ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNITS

In view of the issuance of the Financial Services Authority Regulation Number 24/POJK.03/2015 Concerning Products and Activities of Islamic Banks and Islamic Business Units (State Gazette of the Republic of Indonesia Year 2015 Number 289, Supplement to the State Gazette of the Republic of Indonesia Number 5771) and the Bank Indonesia Regulation Number 14/26/PBI/2012 Concerning Business Activities and Office Networks Based on Bank Core Capital (State Gazette of the Republic of Indonesia Year 2012 Number 286, Supplement to the State Gazette of the Republic of Indonesia Number 5384), it is necessary to regulate implementation provisions regarding Products and Activities of Islamic Commercial Banks and Islamic Business Units in this Financial Services Authority Circular Letter as follows:

I. GENERAL

Business activities that can be carried out by Islamic Commercial Banks (BUS) and Islamic Business Units (UUS), hereinafter referred to as Banks, are grouped based on core capital, hereinafter referred to as Banks based on Business Activities (BUKU). The grouping of Banks based on business activities consists of 4 (four) BUKU. The higher the Bank's core capital, the higher the Bank's BUKU and the broader the scope of business activities that can be carried out by the Bank. The BUKU grouping for UUS is based on the core capital of the Conventional Commercial Bank that is its parent. BUKU classification refers to regulations governing business activities and office networks based on bank core capital.
The implementation of Bank business activities is carried out, among others, by issuing Products and/or carrying out specific Activities to meet the needs of the Bank and/or customers.
In issuing Products and/or carrying out Activities, Banks must apply Sharia Principles, prudential principles, and customer protection principles. In addition, Banks must have sufficient capital to support the issuance of Products and/or the implementation of Activities and apply adequate risk management to mitigate risks arising from such Products and/or Activities.

II. BANK BUSINESS ACTIVITIES BASED ON BUKU

Bank business activities, including Products and Activities, are grouped as follows:

a. Fund Mobilization
Fund mobilization activities include:
1) deposits (current accounts, savings);
2) investments (current accounts, savings, deposits);
3) issuance of Sharia deposit certificates;
4) financing received;
5) issuance of Sharia securities including Sharia securities with equity features;
6) asset securitization; and
7) other fund mobilization activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

b. Fund Disbursement
Fund disbursement activities include:
1) financing based on profit-sharing principles (mudharabah, musyarakah, musyarakah mutanaqisah), leasing principles (ijarah, ijarah muntahiya bittamlik, multijasa), sales principles (murabahah, istishna, salam), and lending principles (qardh) including in the form of syndicated financing;
2) refinancing;
3) debt or financing transfer;
4) Sharia factoring;
5) purchase of Sharia securities;
6) placement with Bank Indonesia;
7) placement with other banks; and
8) other fund disbursement activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

c. Trade Finance
Trade finance activities include:
1) trade financing through the issuance and acceptance of Domestic Documentary Letters of Credit (SKBDN);
2) export-import financing using Letters of Credit (L/C);
3) export-import financing without using L/C; and
4) other trade finance activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

d. Treasury Activities
Treasury activities include:
1) buying and selling foreign banknotes;
2) foreign currency cash transactions, namely spot transactions;
3) hedging transactions on exchange rates based on Sharia Principles; and
4) other treasury activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

e. Agency and Cooperation Activities
Agency and cooperation activities include:
1) sales agents for Sharia mutual fund securities;
2) sales agents for Sharia securities issued by the Government;
3) marketing cooperation with Sharia insurance companies (bancassurance) in reference, distribution, and integration business models;
4) payment points; and
5) other agency or cooperation activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

f. Payment System and Electronic Banking Activities Payment system and electronic banking activities include:
1) clearing organizers;
2) organizers of final settlement of transactions between Banks (settlement);
3) organizers of fund transfers;
4) organizers of card-based payment instruments including Automated Teller Machine (ATM) cards, debit cards, and financing cards (sharia card);
5) organizers of electronic money (e-money);
6) phone banking;
7) sms banking;
8) mobile banking;
9) internet banking; and
10) other payment system and electronic banking activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

g. Other Activities
Other activity types include:
1) provision of Safe Deposit Boxes (SDB);
2) Traveller’s Cheques (TC);
3) mass payroll payments;
4) cash management;
5) Premium Customer Service (LNP);
6) custodian;
7) trustee;
8) trust with management;
9) virtual account;
10) cash pick up and delivery;
11) escrow agent;
12) bank guarantees;
13) Inclusive Financial Officeless Financial Services (Laku Pandai); and
14) other activities commonly carried out by Banks as long as they do not conflict with legislation and Sharia Principles.

In addition to carrying out business activities as referred to in item 1, Banks may carry out:

a. Equity Participation Activities
Equity participation activities can only be carried out by BUS. Equity participation is the investment of BUS funds in the form of shares in Islamic banks and other financial companies that conduct business activities based on Sharia Principles as regulated in legislation, including investment in the form of mandatory convertible sukuk or certain types of transactions that result in BUS having or to have shares in companies engaged in financial business activities based on Sharia Principles.

b. Temporary Equity Participation Activities for Financing Rescue Activities in the form of temporary equity participation by Banks in customer companies to overcome financing failures (debt to equity swap) as regulated in provisions regarding Bank equity participation.

Banks may carry out business activities as referred to in item 1 in foreign currency as long as they have obtained approval from the Financial Services Authority.

III. CRITERIA FOR NEW PRODUCTS AND ACTIVITIES

New Products and/or Activities are Products and/or Activities that meet the following criteria:

a. have never been issued or carried out previously by the respective Bank; or b. have been issued or carried out previously by the Bank but involve the development of features or characteristics.

The term development of features or characteristics includes the addition and/or replacement of features or characteristics that cause changes or increases in the risk profile of Products and/or Activities issued previously.

Examples of Products that undergo feature or characteristic development but do not cause changes or increases in risk profile are time deposit products that undergo changes in duration and/or nominal value.

Examples of Products or Activities that undergo feature or characteristic development and cause changes or increases in risk profile include:

Financing with musyarakah mutanaqisah contracts for objects that were previously ready stock becoming ready stock and inden (pre-order).
Development of cooperation Activities previously carried out by the Bank, for example, marketing Activities with Sharia insurance companies (bancassurance) in the reference business model developed into the distribution or integration business model, thereby causing changes in the risk profile of such Activities.

IV. INCLUSION OF PLANS FOR ISSUANCE OF NEW PRODUCTS AND/OR IMPLEMENTATION OF NEW ACTIVITIES IN THE BANK'S BUSINESS PLAN

Plans for the issuance of Products and/or implementation of new Activities included in the Bank's business plan must at least contain the following information and explanations:

type and general description of new Products and/or Activities;
timing of issuance of Products and/or implementation of new Activities;
purpose or benefits of issuing Products and/or implementing new Activities;
linkage of new Products and/or Activities with the Bank's business strategy;
risks associated with the issuance of Products and/or implementation of new Activities; and
risk mitigation for the issuance of Products and/or implementation of new Activities.

The inclusion of plans for the issuance of Products and/or implementation of new Activities uses the format as referred to in Appendix I.

V. SCOPE OF POLICIES AND PROCEDURES IN RISK MANAGEMENT

The scope of policies and procedures in risk management for new Products and/or Activities must at least cover:

Identification of all risks related to new Products and/or Activities;
Analysis of legal and compliance aspects for new Products and/or Activities;
Operational systems and procedures as well as authorities in the management of new Products and/or Activities;
Accounting information systems for new Products and/or Activities;
Trial period for risk measurement and monitoring methods against new Products and/or Activities, in the event that new Products and/or Activities carry high risks.

VI. LICENSING OF NEW PRODUCTS AND/OR ACTIVITIES

Banks are required to obtain approval from the Financial Services Authority to issue Products and/or carry out new Activities if the new Products and/or Activities are not listed in the Bank Products and Activities Codification. Such Products and/or Activities must be in accordance with the BUKU classification and must be listed in the Bank's business plan if the Products and/or Activities have never been issued or carried out previously by the Bank.
Banks may issue Products and/or carry out new Activities without approval from the Financial Services Authority if the new Products and/or Activities have:
a. been listed in the Bank Products and Activities Codification; b. been listed in the Bank's business plan;
c. been in accordance with the BUKU classification; and
d. been supported by adequate operational readiness.
The inclusion of new Products and/or Activities in the Bank's business plan as referred to in item 2 letter b applies to new Products and/or Activities because they meet the criteria of never having been issued or carried out previously by the Bank.
Definitions or general characteristics of Bank Products and Activities as referred to in item 1 and item 2 refer to Appendix II.
The scope of Bank Products and Activities in each BUKU refers to Appendix III.
The Bank Products and Activities Codification refers to Appendix IV.

VII. APPLICATION FOR APPROVAL OF ISSUANCE OF NEW PRODUCTS AND/OR IMPLEMENTATION OF NEW ACTIVITIES

Applications for approval of the issuance of Products and/or implementation of new Activities are submitted by Banks to the Financial Services Authority at least 30 (thirty) working days prior to the issuance of Products and/or implementation of new Activities using the sample letter format as referred to in Appendix V.1 accompanied by supporting documents containing at least the following information and explanations:

general explanation of new Products and/or Activities including:
a. type and name of new Products and/or Activities; b. planned timing of issuance of Products and/or implementation of new Activities; and
c. information regarding features or characteristics of Products to be issued and/or Activities to be carried out;
benefits and costs for the Bank;
benefits and risks for customers;
standard operating procedures containing among others definitions and schemes; related regulations; characteristics; target market or customers; process flow (flowchart), related work units and personnel; implementation procedures according to the process flow; accounting journals; policies regarding transparency and customer protection; and handling of problematic customers (in the event it is a financing Product);
plans for policies and procedures related to the implementation of the Anti-Money Laundering and Counter-Terrorism Financing (APU and PPT) program;
identification, measurement, monitoring, and control of risks inherent in new Products and/or Activities;
results of legal and compliance aspect analysis of new Products and/or Activities;
accounting information systems including a brief explanation of the linkage of such accounting information systems with the Bank's overall accounting information systems, and/or administrative recording systems;
Sharia opinion from the Sharia Supervisory Board (DPS) regarding new Products and/or Activities at least covering:
a. new Products and/or Activities are based on fatwas of the National Sharia Board – Indonesian Ulema Council (DSN-MUI); b. the conformity of new Products and/or Activities with DSN-MUI fatwas at least covering:
1) the contracts used and fulfillment of elements in the contracts used;
2) transaction objects and purposes of use;
3) conformity of bonus/nisbah profit-sharing/margin/ujrah/fee determination with the contracts used, including in the event of a need for review of nisbah profit-sharing/margin/ujrah (for disbursement products);
4) determination of administrative costs; and
5) determination of gifts, penalties/sanctions and/or compensation, discounts, accelerated repayment, and treatment of collateral, if any;
c. standard operating procedures for new Products and/or Activities related to the fulfillment of Sharia Principles; and
d. results of review of contract/agreement/application form concepts for new Products and/or Activities related to the fulfillment of Sharia Principles.
contract/agreement/application form concepts at least covering:
a. identity of the parties; b. contracts used;
c. detailed and clear description of the value and objects of the agreement;
d. rights and obligations of the parties; e. contract implementation mechanism; f. duration; g. bonus/nisbah profit-sharing/margin/ujrah/fee; h. collateral objects, if any;
i. details of related costs;
j. dispute resolution mechanism in the event of disputes/disputes; k. in the agreement contains the statement: "This agreement has been adjusted to the provisions of legislation including the provisions of the Financial Services Authority Regulation", attached with an opinion from the legal work unit stating that the contract/agreement/application form concept is in accordance with applicable regulations; and
operational readiness including human resources and information technology readiness.

The Sharia opinion from the DPS as referred to in item 9 uses the sample format as referred to in Appendix V.2.

VIII. REPORT ON THE IMPLEMENTATION OF ISSUANCE OF NEW PRODUCTS AND/OR IMPLEMENTATION OF NEW ACTIVITIES

Reports on the implementation of issuance of Products and/or implementation of new Activities that have received approval from the Financial Services Authority are submitted by Banks to the Financial Services Authority at most 7 (seven) working days after the issuance of Products and/or implementation of new Activities using the sample letter format as referred to in Appendix V.3 accompanied by supporting documents in the form of explanations regarding the conformity of new Products issued or new Activities carried out with Products and/or new Activities approved by the Financial Services Authority.
Reports on the implementation of issuance of Products and/or implementation of new Activities that do not require approval from the Financial Services Authority are submitted by Banks to the Financial Services Authority at most 7 (seven) working days after the issuance of Products and/or implementation of new Activities using the sample letter format as referred to in Appendix V.4 accompanied by supporting documents as follows:

a. general summary of new Products and/or Activities at least covering:
1) type and name of new Products and/or Activities;
2) date of issuance of Products and/or implementation of new Activities;
3) conformity of new Products issued and/or new Activities carried out with:
a) BUKU classification; and b) Bank Products and Activities Codification;
4) benefits and costs for the Bank;
5) benefits and risks for customers;
6) target market or customers;
7) characteristics of Products and/or Activities;
8) process flow (flowchart) and implementation procedures according to the process flow of Products and/or Activities;
9) accounting journals;
10) policies regarding transparency and customer protection; and
11) handling of problematic customers (in the event it is a financing Product);

b. standard operating procedures containing among others definitions and schemes; related regulations; characteristics; target market or customers; process flow (flowchart), related work units and personnel; implementation procedures according to the process flow; accounting journals; policies regarding transparency and customer protection; and handling of problematic customers (in the event it is a financing Product); and

The implementation of issuance of Products and/or implementation of new Activities is calculated from the date the Products and/or Activities can be purchased or utilized by customers.

IX. REPORT ON PLANS TO CEASE BANK PRODUCTS AND/OR ACTIVITIES

Reports on plans to cease Bank Products and/or Activities are submitted by Banks to the Financial Services Authority at most 10 (ten) working days prior to the implementation of the cessation of Bank Products and/or Activities using the sample letter format as referred to in Appendix V.5 accompanied by supporting documents containing at least:

reasons for cessation;
a statement letter from the Board of Directors regarding responsibility for the cessation decision; and
explanations regarding steps to be taken to settle or transfer all obligations to customers and other parties.

X. REPORT ON THE IMPLEMENTATION OF PERMANENT CESSATION OF PRODUCTS AND/OR ACTIVITIES AT THE BANK'S INITIATIVE

Reports on the implementation of permanent cessation of Bank Products and/or Activities are submitted by Banks to the Financial Services Authority at most 7 (seven) working days after the cessation of Bank Products and/or Activities referring to the letter format as referred to in Appendix V.6 accompanied by supporting documents containing at least explanations regarding steps taken to settle or transfer all obligations to customers and other parties.

XI. REPORT ON THE IMPLEMENTATION OF TEMPORARY CESSATION, IMPROVEMENT REPORTS, AND REPORTS ON THE RE-ISSUANCE OF PRODUCTS AND/OR RE-IMPLEMENTATION OF ACTIVITIES OF BANKS AT THE ORDER OF THE FINANCIAL SERVICES AUTHORITY

Reports on the implementation of temporary cessation of Bank Products and/or Activities at the order of the Financial Services Authority are submitted by Banks to the Financial Services Authority at most 7 (seven) working days after the cessation of Bank Products and/or Activities using the sample letter format as referred to in Appendix V.7.
Reports on the improvement of Products and/or Activities following temporary cessation are submitted by Banks to the Financial Services Authority within the timeframe set by the Financial Services Authority using the sample letter format as referred to in Appendix V.8.
Reports on the implementation of re-issuance of Products and/or re-implementation of Activities of Banks because the Financial Services Authority has lifted the temporary cessation are submitted by Banks to the Financial Services Authority at most 7 (seven) working days after the re-issuance of Products and/or re-implementation of Activities using the sample letter format as referred to in Appendix V.9.

XII. REPORT ON THE IMPLEMENTATION OF PERMANENT CESSATION AND REPORTS ON ACTION PLANS FOR PRODUCTS AND/OR ACTIVITIES OF BANKS AT THE ORDER OF THE FINANCIAL SERVICES AUTHORITY

Reports on the implementation of permanent cessation of Bank Products and/or Activities at the order of the Financial Services Authority are submitted by Banks to the Financial Services Authority at most 7 (seven) working days after the cessation of Bank Products and/or Activities using the sample letter format as referred to in Appendix V.10.
Reports on action plans following the permanent cessation of Bank Products and/or Activities are submitted by Banks to the Financial Services Authority at most 20 (twenty) working days after the date of the cessation letter of Products and/or Activities using the sample letter format as referred to in Appendix V.11.

XIII. SUBMISSION OF APPROVAL APPLICATIONS AND/OR SUBMISSION OF REPORTS

Applications for approval and/or submission of reports are submitted by Banks to the Financial Services Authority at the following addresses:
a. Sharia Banking Department, for Banks headquartered in the Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek) area, and Banten Province; or b. Regional Office or local Financial Services Authority Office for Banks headquartered outside the Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek) area, and Banten Province.
In the event that the Financial Services Authority has provided an electronic licensing system, applications for approval and/or submission of reports are submitted to the Financial Services Authority referring to the mechanisms and procedures as regulated in provisions governing electronic licensing.

XIV. OTHERS

Appendix I, Appendix II, Appendix III, Appendix IV, and Appendix V are an integral part of this Financial Services Authority Circular Letter.

XV. CLOSING

Upon the entry into force of this Financial Services Authority Circular Letter:

Bank Indonesia Circular Letter Number 10/31/DPbS dated October 7, 2008 concerning Products of Sharia Banks and Islamic Business Units;
Bank Indonesia Circular Letter Number 14/7/DPbS dated February 29, 2012 concerning Gold-Collateralized Qardh Products for Sharia Banks and Islamic Business Units; and
Bank Indonesia Circular Letter Number 14/16/DPbS dated May 31, 2012 concerning Gold Ownership Financing Products for Sharia Banks and Islamic Business Units,
are revoked and declared invalid for BUS and UUS.

This Financial Services Authority Circular Letter takes effect on the date of determination.

Determined in Jakarta on December 22, 2015

EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signed
NELSON TAMPUBOLON

A copy in accordance with the original
Director of Law 1
Law Department signed
Sudarmaji

APPENDIX I
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 36 /SEOJK.03/2015 CONCERNING PRODUCTS AND ACTIVITIES OF ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNITS

PLAN FOR ISSUANCE OF PRODUCTS AND/OR IMPLEMENTATION OF NEW ACTIVITIES BANK:
YEAR:
No. Type and Name of New Product and/or Activity 1) Planned Time for Issuance of Product and/or Implementation of New Activity Purpose of Issuance of Product and/or Implementation of New Activity Linkage of New Product and/or Activity with Bank Strategy 2) General Description of New Product and/or Activity 2) Risks that may arise from Issuance of Product and/or Implementation of New Activity 2) Risk Mitigation Plan For Bank For Customers
1) Examples: fund collection – Mudharabah deposits, fund disbursement – Mutanaqisah Musharakah financing, agency and cooperation – bancassurance, payment systems and electronic banking – internet banking.
2) More detailed explanations can be included in a separate sheet.
Determined in Jakarta
On the date of 22 December 2015
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signature
NELSON TAMPUBOLON
Copy matches the original
Director of Law 1
Legal Department signature
Sudarmaji

APPENDIX II
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 36 /SEOJK.03/2015 CONCERNING PRODUCTS AND ACTIVITIES OF ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNITS

DEFINITIONS OR GENERAL CHARACTERISTICS OF PRODUCTS AND ACTIVITIES OF BANKS

FUND COLLECTION
a. Deposits (Wadi’ah)
1) Demand Deposits Customer deposits at the Bank that can be withdrawn at any time using checks, giro slips, other payment order instruments, or with transfer orders.
2) Savings Customer funds deposited at the Bank that can only be withdrawn according to specific agreed terms, but cannot be withdrawn using checks, giro slips, and/or other instruments equivalent to those.
b. Investments (Mudharabah)
1) Investment Demand Deposits Customer funds deposited at the Bank that can be withdrawn according to agreement using checks, giro slips, other payment order instruments, or with transfer orders.
2) Investment Savings Customer funds deposited at the Bank that can only be withdrawn according to specific agreed terms, but cannot be withdrawn using checks, giro slips, and/or other instruments equivalent to those.
3) Investment Deposits Customer funds deposited at the Bank that can only be withdrawn at a specific agreed time based on the contract between the depositor customer and the Bank.
c. Islamic deposit certificates
1) Without certificates (scripless)
2) In certificate form
Deposits in the form of deposits based on Sharia Principles where the certificate of deposit can be transferred with certain conditions. d. Loans/financing received Loans or financing received from banks or third parties who are not banks, which can originate from within the country (domestic) or from abroad in the form of rupiah... and/or foreign currency. For long-term foreign loans, the Bank must first obtain market entry approval from Bank Indonesia. e. Issuance of Sharia securities Sharia securities issued by the Bank, whether traded in the money market or the capital market, such as Medium Term Notes (MTN) and corporate sukuk. f. Issuance of Sharia securities with equity features Sharia securities or loans with equity features, including convertible Sharia securities, which are a type of Sharia security that can be converted into shares of the issuer of the Sharia security, usually at an exchange ratio determined in advance at the time of issuance of the Sharia security. g. Asset securitization Issuance of Sharia securities by asset-backed securities issuers based on the transfer of financial assets from the original financing customer, followed by payments originating from the proceeds of the sale of asset-backed securities to investors. h. Other fund collection Self-explanatory.
FUND DISBURSEMENT
a. Financing based on profit-sharing principles
1) Mudharabah Financing Provision of funds for business cooperation between two parties where the fund owner provides all the funds, while the fund manager acts as the manager, and profits are shared among them according to the agreed ratio.
2) Musharakah Financing Provision of funds for specific business cooperation where each party provides a portion of funds with the provision that profits will be shared according to the agreed ratio, while losses are borne according to each party's capital portion.
3) Mutanaqisah Musharakah Financing (MMQ)
Musharakah financing where the ownership of assets (goods) or capital of one party (partner) decreases due to gradual purchase by the other party. b. Financing based on leasing principles
1) Ijarah Financing Provision of funds for the transfer of the right to use/benefit from an asset for a certain period with rental payments (ujrah) without following the transfer of ownership of the asset itself.
2) Ijarah Muntahiyah Bittamlik (IMBT) Financing Provision of funds for the transfer of the right to use or benefit from a good or service based on a lease transaction with an option to transfer ownership of the goods.
3) Multi-service Ijarah Financing Provision of funds for the transfer of benefits from services for a certain period with rental payments (ujrah).
4) Hajj management financing Financing provided by the Bank to customers for Hajj pilgrimage purposes.
c. Financing based on sales principles
1) Murabahah Financing Provision of funds or receivables equivalent to that for the sale and purchase of goods at the base price plus margin based on agreement between the Bank and the customer, obligating the customer to settle the debt/obligation.
2) Gold Ownership Financing (PKE)
Financing for gold ownership.
3) Istishna’ Financing Provision of funds or receivables equivalent to that for the sale and purchase of goods in the form of ordering the manufacture of specific goods with agreed criteria and requirements between the orderer/buyer and the seller/manufacturer.
4) Salam Financing Provision of funds or receivables equivalent to that for the sale and purchase of ordered goods with delivery of goods later by the seller and payment by the buyer at the time of the contract is agreed upon according to certain conditions.
d. Financing based on loan principles
1) Qardh Financing Provision of funds or receivables equivalent to that based on agreement between the borrower and the lender, obligating the borrower to repay the debt after a certain period.
2) Gold-Collateralized Qardh Financing
Qardh financing with gold collateral bound by a rahn contract, where the pledged gold is stored and maintained by the Bank for a certain period with payment of storage and maintenance costs for the gold as the rahn object. e. Syndicated financing Joint financing provision among banks or between banks and conventional banks to one customer, where the financing amount is too large to be provided by a single bank alone. In a syndicated financing agreement, the Bank can act as arranger, underwriter, agent, or participant. f. Refinancing Provision of financing facilities for customers who already fully own assets or customers who have not yet settled previous financing. g. Debt transfer or financing Transfer of customer debt from conventional financial institutions to the Bank and/or transfer of customer financing from Islamic financial institutions to the Bank. h. Islamic factoring Transfer of short-term receivable or claim settlement from a customer who has receivables or claims to the Bank, which then collects the receivable from the debtor or the party designated by the debtor according to Sharia Principles.
i. Purchase of Sharia securities
Purchase of Sharia securities issued by the government, Bank Indonesia, or corporations. j. Placement at Bank Indonesia Receivables or fund placements by the Bank at Bank Indonesia in the form of demand deposits, transactions in the context of Sharia open market operations, placement facilities for Bank Indonesia participants of the Islamic Interbank Money Market (PUAS) at Bank Indonesia, and other types of receivables or placements by the Bank at Bank Indonesia. k. Placement at other banks Investment of Bank funds in other banks in the form of demand deposits, savings, deposits, Islamic deposit certificates, and other similar investments based on Sharia Principles including PUAS referring to regulations governing PUAS.
l. Other fund disbursement Self-explanatory
TRADE FINANCE
a. Financing with Bank Guarantees (SKBDN)
1) Issuance and Financing with SKBDN: Written commitment based on the written request of the applicant (applicant) binding the issuing bank to:
a. make payments to the payee or their order, or accept and pay bills drawn by the payee; b. authorize other banks to make payments to the payee, accept and pay bills drawn by the payee; or
c. authorize other banks to negotiate bills drawn by the payee,
upon presentation of documents as long as the conditions of the SKBDN are met.
2) Receipt and Financing with SKBDN: Statement of payment to the SKBDN payee issued by the issuing bank to facilitate trade with fulfillment of certain requirements according to Sharia Principles.
b. Import financing with Letter of Credit (L/C) Statement of payment to the exporter (beneficiary) issued by the Bank (issuing bank) at the request of the importer with fulfillment of certain requirements.
c. Export financing with Letter of Credit (L/C)
Statement of payment to the exporter issued by the issuing bank to facilitate export trade with fulfillment of certain requirements according to Sharia Principles. d. Export/Import financing Provision of financing facilities by the Bank to customers for export-import without Letter of Credit (L/C). e. Other trade finance Self-explanatory.
TREASURY
a. Sale and purchase of foreign banknotes (banknotes) Sale or purchase activities of banknotes or Foreign Currency Notes (UKA). b. Foreign exchange transactions (spot) Agreement to buy/sell foreign currency cash with delivery or settlement of the transaction not exceeding 2 (two) working days.
c. Sharia hedging transactions on exchange rates
1) Simple Sharia hedging transactions on exchange rates
Hedging transactions with a forward agreement scheme followed by a spot transaction at maturity and settlement in the form of currency handover.
2) Complex Sharia hedging transactions on exchange rates
Hedging transactions with a scheme consisting of a series of spot and forward agreement transactions followed by a spot transaction at maturity and settlement in the form of currency handover.
3) Sharia hedging transactions on exchange rates - through Sharia commodity exchanges
Hedging transactions with a scheme consisting of a series of commodity sales and purchases in rupiah currency followed by sales and purchases of commodities in foreign currency and settlement in the form of currency handover at maturity. d. Other Treasury Self-explanatory.
FOREIGN EXCHANGE ACTIVITIES Self-explanatory.
CAPITAL PARTICIPATION Investment of Bank funds in the form of shares in companies engaged in the field of Islamic finance, including investment in the form of Sharia securities that can be converted into shares (convertible securities) or other types of transactions based on Sharia Principles that result in the Bank having or will have shares in companies engaged in the field of Islamic finance.
TEMPORARY CAPITAL PARTICIPATION
Capital participation by the Bank in the form of shares in customer companies to overcome financing failures.
AGENCY AND COOPERATION
a. Sharia mutual fund sales agent
Bank activities to represent securities companies as investment managers to sell Sharia mutual fund effects implemented by Bank employees who have licenses as Sharia mutual fund sales agents to sell Sharia mutual fund effects. Banks acting as Sharia mutual fund sales agents must first obtain a license as a Mutual Fund Sales Agent (APERD). b. Agent for the sale of Sharia securities issued by the government The Bank acts as a sales agent for Sharia securities issued by the government to its customers, including the sale of State Sharia Securities (SBSN) and State Treasury Bills (SPN) Sharia.
c. Bancassurance reference business model
Cooperative marketing activities of Sharia insurance products with the Bank acting only to refer or recommend a Sharia insurance product to customers. The Bank's role in marketing is limited as an intermediary in forwarding information about Sharia insurance products from the Bank's partner insurance companies to customers or providing access to insurance companies to offer Sharia insurance products to customers. d. Bancassurance distribution business model Cooperative marketing activities of insurance products with the Bank acting to market insurance products by providing explanations regarding the insurance products directly to customers. Explanations from the Bank can be done face-to-face with customers and/or using communication media (telemarketing), including through letters, electronic media, and the Bank's website. e. Bancassurance integration business model Cooperative marketing activities of insurance products with the Bank acting to market insurance products to customers by modifying and/or combining insurance products with Bank products. This cooperative marketing activity is carried out by the Bank by offering or selling bundled products to customers face-to-face and/or using communication media, including through letters, electronic media, and the Bank's website. Thus, the Bank's role is not only to forward and provide explanations related to insurance products to customers, but also to follow up on customer applications for bundled products, including those related to insurance products to the Bank's partner insurance companies. f. Payment point Cooperative activities of the Bank with third parties in the context of receiving bills through cash and non-cash deposits, including for receiving payments for electricity, water, telephone, mobile phone, and internet service bills. g. Other agency and cooperation Self-explanatory.
PAYMENT SYSTEMS AND ELECTRONIC BANKING
a. Clearing organizer Organization of electronic financial data and/or instrument exchange between clearing participants either on behalf of participants or on behalf of customers, with settlement at a specific time. b. Final settlement organizer of interbank transactions (settlement) Debiting and crediting activities of Bank demand deposit accounts at Bank Indonesia based on the calculation of rights and obligations of each bank arising in the implementation of the Bank Indonesia National Clearing System (SKNBI).
c. Fund transfer organizer
A series of activities starting with an order from the original sender aimed at transferring a certain amount of funds to the recipient specified in the fund transfer order until the funds are received by the recipient. d. Organizer of payment instruments using cards other than financing cards (sharia card) Organizer of Card Payment Instruments (APMK) in the form of Automated Teller Machines (ATM) and/or debit cards. e. Organizer of payment instruments using financing cards (sharia card) Organizer of Card Payment Instruments (APMK) in the form of financing cards (sharia card). f. Organizer of electronic money (e-money) Organizer of payment instruments meeting the following elements:
a. issued based on the value of money deposited in advance by the holder to the issuer; b. the value of money is stored electronically in a media such as a server or chip;
c. used as a payment instrument to merchants who are not the issuer of the electronic money; and
d. the value of electronic money deposited by the holder and managed by the issuer is not a deposit as referred to in laws governing banking. g. Phone banking Services for banking transactions by contacting the service number at the Bank. h. SMS banking Services for banking information or transactions that can be accessed directly via mobile phones using SMS media.
i. Mobile banking Services for conducting banking transactions via mobile phones.
j. Internet banking Services for conducting banking transactions via the internet network. k. Other payment systems and electronic banking Self-explanatory.
OTHER ACTIVITIES
a. Safe Deposit Box (SDB) Service of renting boxes for storing assets or securities in the Bank's vault. b. Traveller’s Cheque (TC) Issuance of travel cheques that can be used as a payment instrument.
c. Payroll Services to customers to make salary payments to employees/staff en masse.
d. Cash management Services/management of cash provided to customers who have deposits at the Bank, where every transaction must be based on customer orders. Examples of cash management services/management include debiting or transferring customer accounts for the purpose of paying bills or obligations, transferring/transferring funds from one account to another account owned by the customer, consolidation (pooling) or distribution of funds from company branches/operational networks, and mass employee salary payment services (payroll). In cash management activities, the Bank is only allowed to act as the paying party (paying agent) based on customer orders and not as an investment agent (investment agent) of funds. e. Premium Customer Services (LNP) Services related to products and/or activities with certain privileges for premium customers. h. Custodian Collective deposit of securities (effects) such as stocks or bonds and carrying out administrative tasks such as collecting sales proceeds, receiving dividends, gathering information regarding reference companies such as annual general meetings of shareholders, settling sales and purchase transactions, carrying out foreign exchange transactions if necessary, and presenting reports on all its activities as a custodian to its clients. Banks acting as Custodians must first obtain approval from the Financial Services Authority.
i. Trustee Services/management provided to holders of debt effects or sukuk (investors) to act as investor representatives in the issuance of a debt effect or sukuk. As investor representatives, the Bank as Trustee participates in the sukuk issuance process and monitors the issuer's obligations regarding provisions in the trusteeship agreement until the sukuk is fully paid. Banks acting as Trustees must first be registered with the Financial Services Authority to obtain a Certificate of Registration as a Trustee.
j. Virtual Account (VA) Services provided by the Bank to customers in the form of facilities for identifying the receipt of payment of bills owned by the customer to the customer's counterparty. k. Cash pick up and delivery Services for picking up or delivering cash to and from customer locations.
l. Escrow agent
Service provided by the Bank acting as an escrow agent to execute rights and obligations established in the escrow agent agreement. m. Bank Guarantee Written commitment given by the Bank to the guarantee recipient that the Bank will pay a certain amount of money to them at a certain time if the guaranteed party cannot fulfill its obligations. n. Trust with management (trust) Trust is a deposit with management activity. In trust with management activities, there are 3 (three) parties involved, namely (i) settlor as the depositor party who owns assets/funds and grants authority to manage funds to the trustee; (ii) trustee (in this case, the Bank) as the party granted authority by the settlor/depositor to manage assets/funds for the benefit of the beneficiary; and (iii) beneficiary as the party receiving benefits from the assets/funds. Trust activities include activities such as (i) paying agent; (ii) investment agent of funds based on Sharia Principles; and/or (iii) financing agent based on Sharia Principles. o. Laku Pandai Activities of providing Islamic banking services and/or other Islamic financial services that are not conducted through office networks, but through cooperation with other parties and need to be supported by the use of information technology facilities. p. Other activities Self-explanatory. Determined in Jakarta On the date of 22 December 2015 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, signature NELSON TAMPUBOLON Copy matches the original Director of Law 1 Legal Department signature Sudarmaji

APPENDIX III
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 36 /SEOJK.03/2015 CONCERNING PRODUCTS AND ACTIVITIES OF ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNITS

PRODUCTS AND ACTIVITIES OF ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNITS BASED ON BUSINESS ACTIVITY GROUPS

FUND COLLECTION
a. Deposits (Wadi’ah)
1) Demand Deposits
Without approval
Without approval
Without approval
Without approval
2) Savings
Without approval
Without approval
Without approval
Without approval b. Investments (Mudharabah)
1) Demand Deposits
Without approval
Without approval
Without approval
Without approval
2) Savings
Without approval
Without approval
Without approval
Without approval
3) Deposits
Without approval
Without approval
Without approval
Without approval
c. Islamic deposit certificates
1) Without certificates (scripless)
Approval
Without approval
Approval
Without approval
2) In certificate form
Approval
Without approval
Approval
Without approval d. Loans/financing received a) Without Approval Without Approval Without Approval Without Approval e. Issuance of Sharia securities b) Approval f. Issuance of Sharia securities with equity features b) Approval g. Asset securitization b) Prohibited Prohibited Approval Approval h. Other fund collection
1) Outside letters a to g.
2) Letters a to
Approval
Letters...

letter g with note “without approval” but not in accordance with the Codification of Bank Products and Activities.

FUND DISBURSEMENT
a. Financing based on profit-sharing principles
1) Mudharabah Financing Without Approval Without Approval Without Approval Without Approval
2) Musyarakah Financing Without Approval Without Approval Without Approval Without Approval
3) Diminishing Musharakah (MMQ) Financing Without Approval Without Approval Without Approval Without Approval
b. Financing based on leasing principles
1) Ijarah Financing Without Approval Without Approval Without Approval Without Approval
2) Ijarah Muntahiyah Bittamlik (IMBT) Financing Without Approval Without Approval Without Approval Without Approval
3) Multi-Service Ijarah Financing Without Approval Without Approval Without Approval Without Approval
4) Hajj Management Financing Without Approval Without Approval Without Approval Without Approval
c. Financing based on sale-and-purchase principles
1) Murabahah Financing Without Approval Without Approval Without Approval Without Approval
2) Gold Ownership Financing (PKE) Without Approval Without Approval Without Approval Without Approval
3) Istishna’ Financing Without Approval Without Approval Without Approval Without Approval
4) Salam Financing Without Approval Without Approval Without Approval Without Approval
d. Financing based on loan principles
1) Qardh Financing Without Approval Without Approval Without Approval Without Approval
2) Gold-Collateralized Qardh Financing Without Approval Without Approval Without Approval Without Approval
e. Syndicated Financing (participants) Without approval Without approval Without approval Without approval f. Refinancing Without approval Without approval Without approval Without approval g. Debt transfer or financing Without approval Without approval Without approval Without approval h. Sharia factoring Without approval Without approval Without approval Without approval
i. Purchase of Sharia securities Without approval Without approval Without approval Without approval
j. Placement at Bank Indonesia Without approval Without approval Without approval Without approval k. Placement at other banks Without approval Without approval Without approval Without approval
l. Other fund disbursements
1) Outside letters a to k
2) Letters a to k but not in accordance with the Codification of Bank Products and Activities.
TRADE FINANCE
a. Financing with Bankers Acceptance (SKBDN) Without approval Without approval Without approval Without approval b. Import financing with Letter of Credit (L/C) Prohibited Without approval Without approval Without approval
c. Export financing with Letter of Credit (L/C) Prohibited Without approval Without approval Without approval
d. Export-import financing without Letter of Credit (L/C) Prohibited Without approval Without approval Without approval e. Other trade finance
1) Outside letters a to d
2) Letters a to d with note “without approval” but not in accordance with the Codification of Bank Products and Activities.
Approval
TREASURY
a. Sale and purchase of foreign banknotes Approval as PVA Without approval c) Without approval c) Without approval c) b. Foreign exchange transactions (spot) Prohibited Without approval Without approval Without approval
c. Sharia-compliant hedging transactions on exchange rates
1) Simple Sharia-compliant hedging transactions on exchange rates Prohibited Without approval Approval
2) Complex Sharia-compliant hedging transactions on exchange rates Without approval Approval Approval
3) Sharia-compliant hedging transactions on exchange rates via Sharia commodity exchange Prohibited Without approval Approval
d. Other Treasury
1) Outside letters a to c
2) Letters a to c with note “without approval” but not in accordance with the Codification of Bank Products and Activities.
Prohibited Approval
FOREIGN EXCHANGE ACTIVITIES c) Approval
(Only as PVA) Approval
CAPITAL PARTICIPATION Prohibited Approval
15% of capital Approval
25% of capital Approval
35% of capital Approval
TEMPORARY CAPITAL PARTICIPATION Without approval Without approval Without approval Without approval
AGENCY AND COOPERATION
a. Mutual fund Sharia security sales agent Prohibited Approval b. Government-issued Sharia security sales agent Without approval Without approval Without approval Without approval
c. Bancassurance reference business model Approval
d. Bancassurance distribution business model Prohibited Approval e. Bancassurance integration business model Prohibited Approval f. Payment point Without approval Without approval Without approval Without approval g. Other agency and cooperation
1) Outside letters a to f
2) Letters a to f with note “without approval” but not in accordance with the Codification of Bank Products and Activities.
Approval
PAYMENT SYSTEMS AND ELECTRONIC BANKING
a. Clearing organizer d) Approval b. Interbank transaction final settlement organizer (settlement) d) Approval
c. Fund transfer organizer d) Without approval Without approval Without approval Without approval
d. Payment instrument organizer using cards other than financing cards (sharia card) d) Approval e. Payment instrument organizer using financing cards (sharia card) d) Prohibited Approval f. Electronic money (e-money) organizer d) Approval g. Phone banking e) Approval h. SMS banking e) Approval
i. Mobile banking e) Approval
j. Internet banking e) Prohibited f) Approval k. Payment systems and other electronic banking d) and Approval
1) Outside letters a to j.
2) Outside letters a to j with note “without approval” but not in accordance with the Codification of Bank Products and Activities.
OTHER ACTIVITIES
a. Safe Deposit Box (SDB) Without approval Without approval Without approval Without approval b. Traveller’s Cheque (TC) Without approval Without approval Without approval Without approval
c. Payroll Without approval Without approval Without approval Without approval
d. Cash management Prohibited g) Approval e. Premium Customer Service (LNP) Approval h. Custodian b) Prohibited Prohibited Approval Approval
i. Trustee b) Prohibited Prohibited Approval Approval
j. Virtual Account (VA) Without approval Without approval Without approval Without approval k. Cash pick up and delivery Without approval Without approval Without approval Without approval
l. Escrow agent Without approval Without approval Without approval Without approval
m. Bank Guarantee Without approval Without approval Without approval Without approval n. Trust with management Prohibited Prohibited Approval Approval o. Laku Pandai Approval p. Other activities
1) Outside letters a to o.
2) Letters a to o with note “without approval” but not in accordance with the Codification of Bank Products and Activities.
Approval

Notes:
a) : Long-term foreign loans must obtain market entry permission from Bank Indonesia b) : Approval refers to capital market legislation including regulations in the field of capital markets. c) : Banks may conduct foreign exchange business activities provided they have obtained approval from the Financial Services Authority. d) : Banks must obtain implementation permits from Bank Indonesia after obtaining approval from the Financial Services Authority. e) : In the event that the parent conventional commercial bank of the UUS already has approval from the Financial Services Authority, the UUS only needs to report to the Financial Services Authority by citing the approval already held by the parent conventional commercial bank. f) : Unless carried out through cooperation with other banks. g) : Except for cash management consisting of mass payroll payment services/assistance.

Established in Jakarta
On December 22, 2015
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signature
NELSON TAMPUBOLON

Copy matches the original
Legal Director 1
Legal Department signature
Sudarmaji

APPENDIX V
FINANCIAL SERVICES AUTHORITY CIRCULAR LETTER
NUMBER 36 /SEOJK.03/2015
CONCERNING
PRODUCTS AND ACTIVITIES OF SHARIA COMMERCIAL BANKS AND SHARIA BUSINESS UNITS

Appendix V.1
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Request for Approval of Issuance of New Product/Implementation of New Activity 2) Assalamu’alaikum Wr. Wb.
With regard to the above subject, we hereby submit a request for approval for the issuance of a new Product/implementation of a new Activity 2) with details as follows:

Type of Product/Activity 2)
: ………………………………………………
Name of Product/Activity 2)
: ………………………………………………
Planned issuance of Product/implementation of Activity 2)
: ……….
As consideration materials, we herewith submit supporting documents as required according to the attached checklist. If there are questions or other matters related to this request letter, you can contact our employee namely ………via telephone…….or email…….. Thus, we submit this request, thank you for your attention. Wassalamu’alaikum Wr. Wb. BANK BOARD OF DIRECTORS CC: Sharia Banking Department 3)
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.
3) In the event that it is a request for approval of a new Product and the BUS or UUS is outside the working area of the Sharia Banking Department.

CHECKLIST OF DOCUMENTS FOR REQUEST FOR APPROVAL OF NEW PRODUCT/ACTIVITY 1) No. Document Check Notes

General explanation regarding the new Product/Activity 1).
a. type and name of new Product/Activity 1); b. planned time for issuance of new Product/implementation of new Activity 1); and
c. information regarding features or characteristics of the Product to be issued/Activity to be implemented 1).
Benefits and costs for the Bank.
Benefits and risks for customers.
Operational procedures containing among others definitions and schemes; related provisions; characteristics; target market or customers; process flow (flowchart), relevant work units and officers; implementation procedures according to the process flow; accounting journals; policies regarding transparency and customer protection; and handling of troubled customers (in case it is a financing Product).
Planned policies and procedures related to the application of AML and CFT programs.
Identification, measurement, monitoring, and control of risks inherent in the new Product/Activity 1).
Results of legal and compliance aspect analysis of the new Product/Activity 1).
Sharia opinion from the DPS regarding the new Product/Activity 1) (attached).
Concept of contract/agreement/application form attached with an opinion from the legal unit stating that the concept of contract/agreement/application form complies with applicable regulations.
Operational readiness including human resources and IT readiness.
Thus, this checklist has been prepared correctly and completely to be submitted to the Financial Services Authority in the context of requesting approval for a new Product/Activity 1).

(Place), (Date, Month, Year)
BANK BOARD OF DIRECTORS
1) Strike out what is not needed.

Appendix V.2
SHARIA SUPERVISORY BOARD (DPS) OPINION
Name of New Product/Activity 1): ………………………
No. Notes Opinion

The new Product/Activity 1) is based on DSN-MUI fatwa.
Compliance of the new Product/Activity 1) with DSN-MUI fatwa at least includes:
a. the contract used and fulfillment of elements in the contract used; b. transaction object and purpose of use;
c. compliance of bonus/nisbah for profit sharing/margin/ujrah/fee determination with the contract used, including in cases requiring review of nisbah for profit sharing/margin/ujrah (for fund disbursement products);
d. administrative fee determination; and e. determination of prizes, penalties/sanctions and/or compensation, deductions, accelerated repayment, and treatment of collateral, if any.
Operational procedures for the new Product/Activity 1) related to fulfilling Sharia Principles.
Review results regarding the concept of contract/agreement/application form of the new Product/Activity 1) related to fulfilling Sharia Principles.
Conclusion: ……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………
(Place), (Date, Month, Year)
(Sharia Supervisory Board) (Sharia Supervisory Board)
1) strike out what is not needed

Appendix V.3
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Realization of Issuance of New Product/Implementation of New Activity 2) Assalamu’alaikum Wr. Wb.
With regard to the Financial Services Authority Approval Letter Number ...... dated ..... Subject ....., we hereby report that the issuance of a new Product/implementation of a new Activity 2) has been carried out as follows:

Type of Product/Activity 2)
: …….......................................
Name of Product/Activity 2)
: …….......................................
Date of issuance of Product/implementation of Activity 2)
: ……………
To complete this report, we herewith submit supporting documents consisting of an explanation regarding the compliance of the newly issued Product/newly implemented Activity 2) with the new Product/Activity 2) approved by the Financial Services Authority. Thus, we submit this report, thank you for your attention. Wassalamu’alaikum Wr. Wb. BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.

Appendix V.4
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Realization of Issuance of New Product/Implementation of New Activity 2) Assalamu’alaikum Wr. Wb.
With regard to the above subject, we hereby report that the issuance of a new Product/implementation of a new Activity 2) has been carried out as follows:

Type of Product/Activity 2) : …….......................................
Name of Product/Activity 2) : …….......................................
Date of issuance of Product/implementation of Activity 2) : ……………
To complete this report, we herewith submit supporting documents as required according to the attached checklist.
Thus, we submit this report, thank you for your attention.
Wassalamu’alaikum Wr. Wb.
BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.

CHECKLIST OF DOCUMENTS FOR REALIZATION OF ISSUANCE OF NEW PRODUCT/IMPLEMENTATION OF NEW ACTIVITY 1) No. Document Check Notes

General summary at least including:
a. type and name of new Product/Activity 1); b. date of issuance of new Product/implementation of new Activity 1);
c. compliance of the newly issued Product or newly implemented Activity 1) with:
d. BOOK classification; e. Codification of Bank Products and Activities; f. benefits and costs for the Bank; g. benefits and risks for customers; h. target market or customers;
i. characteristics of Product/Activity 1);
j. process flow (flowchart) and implementation procedures according to the process flow of the Product or Activity; k. accounting journals;
l. policies regarding transparency and customer protection; and
m. handling of troubled customers (in case it is a financing Product).
Operational procedures containing among others definitions and schemes; related provisions; characteristics; target market or customers; process flow (flowchart), relevant work units and officers; implementation procedures according to the process flow; accounting journals; policies regarding transparency and customer protection; and handling of troubled customers (in case it is a financing Product).
Thus, this checklist has been prepared correctly and completely to be submitted to the Financial Services Authority in the context of reporting the realization of issuance of a new Product/implementation of a new Activity 1).

(Place), (Date, Month, Year)
BANK BOARD OF DIRECTORS
1) Strike out what is not needed.

Appendix V.5
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Plan to Discontinue Product/Activity 2) Assalamu’alaikum Wr. Wb.
With regard to the above subject, we hereby submit a report on the plan to discontinue Product/Activity 2) as follows:

Type of Product/Activity 2) : ……..................................................
Name of Product/Activity 2) : …….................................................
Planned discontinuation date : ………………………………………………
As consideration materials, we herewith submit supporting documents as required according to the attached checklist.
Thus, we submit this report, thank you for your attention.
Wassalamu’alaikum Wr. Wb

BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.

CHECKLIST OF DOCUMENTS FOR PLAN TO DISCONTINUE PRODUCT/ACTIVITY 1) No. Document Check Notes

Reasons for discontinuation.
Statement letter from the Board of Directors regarding responsibility for the discontinuation decision.
Explanation regarding steps to be taken to settle or transfer all obligations to customers and other parties.
Thus, this checklist has been prepared correctly and completely to be submitted to the Financial Services Authority in the context of reporting the plan to discontinue Product/Activity 1).

(Place), (Date, Month, Year)
BANK BOARD OF DIRECTORS
1) Strike out what is not needed.

Appendix V.6
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Realization of Discontinuation of Product/Activity 2) Assalamu’alaikum Wr. Wb.
With regard to Financial Services Authority Letter Number ...... dated ..... Subject ..... 2)/With regard to our Letter Number ...... dated ..... Subject ..... 3)4), we hereby report that we have carried out the discontinuation of Product/Activity 4) as follows:

Type of Product/Activity 4)
: ……...........................................................
Name of Product/Activity 4)
: ……...........................................................
Date of discontinuation of Product/Activity 4)
: ………………………………
To complete this report, we herewith submit supporting documents containing an explanation regarding steps taken to settle or transfer all obligations to customers and other parties. Thus, we submit this report, thank you for your attention. Wassalamu’alaikum Wr. Wb. BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) In the event that the Financial Services Authority provides confirmation.
3) In the event that the Financial Services Authority does not provide confirmation.
4) Strike out what is not needed.

Appendix V.7
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Realization of Temporary Discontinuation of Product/Activity 2) Assalamu’alaikum Wr. Wb.
With regard to Financial Services Authority Letter Number ...... dated ..... Subject ...., we hereby report that we have carried out the temporary discontinuation of Product/Activity 2) as follows:

Type of Product/Activity 2)
: ……...........................................................
Name of Product/Activity 2)
: ……...........................................................
Date of temporary discontinuation of Product/Activity 2)
: …………………….
Thus, we submit this report, thank you for your attention.
Wassalamu’alaikum Wr. Wb.
BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.

Appendix V.8
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Improvement of Product/Activity 2) Assalamu’alaikum Wr. Wb.
With regard to Financial Services Authority Letter Number ...... dated ..... Subject .... and our Letter Number ...... dated ..... regarding Report on Realization of Temporary Discontinuation of Product/Activity 2, we hereby report that we have improved Product ..... /Activity 2) ...... in accordance with the request of the Financial Services Authority as attached. Thus, we submit this report, thank you for your attention. Wassalamu’alaikum Wr. Wb. BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.

Appendix V.9
Number: .................... (Place), (Date, Month, Year)
Attachment: ....................
To
Financial Services Authority
Attention 1)
Subject: Report on Realization of Reissuance of Product/Re-implementation of Activity 2) Assalamu’alaikum Wr. Wb.
With regard to Financial Services Authority Letter Number .......... dated ........ Subject............, we hereby report that the reissuance of Product/re-implementation of Activity 2) has been carried out as follows:

Type of Product/Activity 2) : …….......................................
Name of Product/Activity 2) : …….......................................
Date of reissuance of Product/re-implementation of Activity 2): ..
Thus, we submit this report, thank you for your attention.
Wassalamu’alaikum Wr. Wb.
BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority office covering the relevant BUS or UUS.
2) Strike out what is not needed.

Appendix V.10
Number: .................... (Place), (Date, Month, Year)
Enclosure: ....................
To
Financial Services Authority
Attention: 1)
Subject: Report on the Realization of Permanent Cessation of Products/Activities 2) Assalamu’alaikum Wr. Wb.
In relation to the Financial Services Authority letter Number ...... dated ..... Subject ....., we hereby report that we have implemented the permanent cessation of Products/Activities 2) as follows:

Type of Product/Activity 2)
: ……...........................................................
Name of Product/Activity 2)
: ……...........................................................
Date of permanent cessation of Product/Activity 2): ……………………..
This report is submitted, we appreciate your attention.
Wassalamu’alaikum Wr. Wb.
BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority Office covering the relevant Commercial Bank (BUS) or Sharia Business Unit (UUS).
2) Strike out what is not needed.
Appendix...

Appendix V.11
Number: .................... (Place), (Date, Month, Year)
Enclosure: ....................
To
Financial Services Authority
Attention: 1)
Subject: Report on the Action Plan for Cessation of Products/Activities 2) Assalamu’alaikum Wr. Wb.
In relation to the Financial Services Authority letter Number .... dated .... Subject ...., we hereby submit the action plan for the permanent cessation of Product ......../Activity ......... 2) which was implemented on date ..........
This report is submitted, we appreciate your attention.
Wassalamu’alaikum Wr. Wb.
BANK BOARD OF DIRECTORS
1) Sharia Banking Department, Regional Office, or local Financial Services Authority Office covering the relevant Commercial Bank (BUS) or Sharia Business Unit (UUS).
2) Strike out what is not needed.
Established in Jakarta
On date 22 December 2015
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signature
NELSON TAMPUBOLON
Copy in accordance with the original
Legal Director 1
Legal Department signature
Sudarmaji

APPENDIX IV
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 36 /SEOJK.03/2015 REGARDING PRODUCTS AND ACTIVITIES OF SHARIA COMMERCIAL BANKS AND SHARIA BUSINESS UNITS

CODIFICATION OF PRODUCTS AND ACTIVITIES
OF SHARIA COMMERCIAL BANKS AND SHARIA BUSINESS UNITS

TABLE OF CONTENTS
I. FUND RAISING…………………………………………………………… 1
I.1. Deposits…………..…….……………………………………………….... 1
I.I.1. Current Accounts……………….…………………………………………………... 1
I.I.2. Savings………………………………………………………….... 4
I.2. Investments ………………………………………………………………….... 8
I.2.1. Current Accounts………………………………………………………... 8 I.2.2. Savings……………………………………………………………. 13 I.2.3. Deposits……………………………………………………………… 18 I.3. Sharia Deposit Certificates in Bearer Form……………….. 23 I.4. Loans/Financing Received……………………………….. 25
II. FUND DISBURSEMENT………………………………………………………………. 27
II.1. Financing Based on Profit-Sharing Principles………………………. 27 II.1.1.Mudharabah Financing………………………………………. 27 II.1.2.Musyarakah Financing……………………………………….. 31
II.1.3.Musyarakah Mutanaqisah (MMQ) Financing................ 36
II.2. Financing Based on Leasing Principles………………… 42
II.2.1.Ijarah Financing.......................................................... 42
II.2.2.Ijarah Muntahiyah Bittamlik (IMBT) Financing………….. 46
II.2.3.Multi-Service Ijarah Financing…………………………………....
II.2.4.Hajj Management Financing…………………………………… II.3. Financing Based on Sales Principles…………………………. 57
II.3.1.Murabahah Financing.................................................. 57
II.3.2.Gold Ownership Financing (PKE).............................. 62
II.3.3.Istishna’ Financing....................................................... 67
II.3.4.Salam Financing.......................................................... 71
II.4. Financing Based on Loan Principles…………….. 75
II.4.1.Qardh Financing.......................................................... 75
II.4.2.Gold-Collateralized Qardh Financing.................................. 78
II.5. Syndicated Financing ............................................................. 82
II.6. Refinancing……………………………………….. 86
II.7. Debt or Financing Transfer…………………………………... 91
II.8. Sharia Factoring………………………………………………….... 99
II.9. Purchase of Sharia Securities……………………………………. 102 II.10. Placements at Bank Indonesia……………………………………. 104 II.11. Placements at Other Banks…………………………………………… 106
III. TRADE FINANCE………………………… 108
III.1. Financing with Domestic Documentary Letters of Credit…. 108 III.1.1. Issuance and Financing of Domestic DLC………………………... 108 III.1.2. Receipt and Financing of Domestic DLC…………………..….. 112 III.2. Import Financing with Letter of Credit (L/C)………………….. 115 III.3. Export Financing with Letter of Credit (L/C)………………… 121
III.4. Export-Import Financing Without Letter of Credit (L/C)............ 126
IV. TREASURY………………………………………………………………………….. 129
IV.1. Sale and Purchase of Foreign Currency Banknotes…………………………... 129
IV.2. Foreign Exchange Transactions - Spot……………………………………........ 132
IV.3. Simple Sharia Hedging Transactions on Exchange Rates…. 134
V. TEMPORARY CAPITAL PARTICIPATION…………………………………………. 138

VI. AGENCY AND COOPERATION………………………………………………… 141
VI.1. Agent for Sale of Sharia Securities Issued by the Government….............................................................................
VI.2. Payment Point……………………………………………………………....
VII. PAYMENT SYSTEMS AND ELECTRONIC BANKING………………….... 144
VII.1. Fund Transfer Operators…………………………………………... 144 VIII.OTHER ACTIVITIES……………………………………………………………… 146 VIII.1. Safe Deposit Box (SDB)………………………………………………… 146 VIII.2. Traveller’s Cheque (TC)……………………………………………….. 148 VIII.3. Payroll…………………………………………………………………….. 150 VIII.4. Virtual Account (VA)……………………………………………………. 153 VIII.5. Cash Pick Up and Delivery……………………………………………. 155 VIII.6. Escrow Agent………………………………… 158 VIII.7. Bank Guarantees……………………………………………………………. 160

I. FUND RAISING
I.1. DEPOSITS
I.I.1. CURRENT ACCOUNTS

Definition: Customer deposits at the Bank that can be withdrawn at any time using checks, giro slips, other payment order instruments, or through transfer orders.
Contract: Wadi’ah
Requirements 3.1. The Bank acts as the recipient of the deposited funds and the customer acts as the depositor.
3.2. The Bank may manage or use the customer's deposited funds.
3.3. The Bank is not permitted to promise the provision of remuneration or bonuses to customers.
3.4. The Bank guarantees the return of the customer's deposited funds.
3.5. The Bank and customer formalize their agreement on the opening and use of the current account product in the form of a written agreement, using forms, or other forms that can be equated with it.
3.6. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.7. The Bank has policies and procedures for risk mitigation.
3.8. The Bank has adequate recording and account administration systems.
3.9. The opening of current accounts must take into account related regulations:
a. Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT); b. National Blacklist (DHN);
c. Product information transparency;
d. Customer protection in the financial services sector; e. Deposit insurance by the Indonesia Deposit Insurance Corporation (LPS); f. Bank institutionalization; and g. Other related regulations.
Characteristics 4.1. The Bank may set customer targets, namely individuals and/or non-individuals.

4.2. The Bank may charge account administration fees consisting of costs directly related to account management costs, including costs for printing transaction reports and account balances, opening fees, and closing fees.
4.3. The Bank may issue current accounts in Rupiah and foreign currency (specifically for foreign currency savings, this only applies to Banks that have received approval to conduct business activities in foreign currency).
4.4. The Bank may deduct zakat or infaq from remuneration or bonuses received by customers according to the customer's request in the account opening agreement.
4.5. The Bank may provide ATM and/or e-banking facilities in accordance with Bank policy and applicable regulations.
4.6. The Bank may provide promotional gifts in the context of promotion by meeting the following requirements:
a. promotional gifts are not agreed upon, do not lead to disguised riba practices and/or do not become a custom (habit); b. promotional gifts must be in the form of goods and/or services (not in the form of money);
c. in the event that promotional gifts are in the form of goods, the promotional gifts must be tangible and halal items; and
d. promotional gifts are given before the occurrence of the wadi’ah contract.
5. Purpose/
Benefits a. For
Banks
5.a.1. A source of funding for the Bank.
5.a.2. One source of income from follow-up activities utilizing current account funds. b. For Customers 5.b.1. Facilitating payment and/or fund receipt activities. 5.b.2. Can obtain remuneration or bonuses.

6. Risk
Identification
6.1. The Bank faces potential liquidity risk caused by fluctuations in funds in current accounts, so the Bank must reserve funds with liquid assets without disrupting the Bank's activities and financial condition.
6.2. The Bank faces potential market risk caused by changes (fluctuations) in exchange rates when issuing current accounts in foreign currency.
7. Related
Regulations
Related regulations include:
7.1. Bank Indonesia Regulation (PBI) No.7/6/PBI/2005 on Product Information Transparency and Use of Customer Personal Data and Financial Services Authority Circular Letter (SEBI) No.7/25/DPNP along with its amendments.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Raising and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendments.
7.3. PBI No.11/11/PBI/2009 on Payment Instruments Using Cards as amended by PBI No.14/2/PBI/2012 and SEBI No. 11/10/DASP as amended by SEBI No.14/17/DASP along with its amendments.
7.4. PBI No.13/23/PBI/2011 on Risk Management Implementation for Sharia Commercial Banks and Sharia Business Units along with its amendments.
7.5. PBI No.14/27/PBI/2012 on AML/CFT Program Implementation for Commercial Banks and SEBI No. 15/21/DPNP along with its amendments.
7.6. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Core Capital of Banks along with its amendments.
7.7. Financial Services Authority Regulation (POJK) No.1/POJK.07/2013 on Financial Services Sector Consumer Protection along with its amendments.
7.8. PBI No.16/16/PBI/2014 on Foreign Exchange Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendments.
7.9. PBI No.16/17/PBI/2014 on Foreign Exchange Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendments.
7.10.SEOJK No.12/SEOJK.07/2014 on Information Submission in the Context of Marketing Products and/or Financial Services along with its amendments. 7.11.SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendments. SEOJK No.14/SEOJK.07/2014 on Confidentiality and Security of Consumer Personal Data and/or Information along with its amendments.
8. Sharia
Fatwa
National Sharia Board (DSN) Fatwa
8.1. DSN Fatwa No.01/DSN-MUI/IV/2000 on Current Accounts.
8.2. DSN Fatwa No.86/DSN-MUI/XII/2012 on Gifts in Fund Raising by Sharia Financial Institutions.
9. Accounting
System/
Recording
Indonesian Sharia Banking Accounting Guidelines (PAPSI)
10. Applies to BOOK 1, BOOK 2, BOOK 3, and BOOK 4.
I.I.2. SAVINGS
1. Definition: Customer funds deposited at the Bank that can only be withdrawn according to specific agreed terms, but cannot be withdrawn using checks, giro slips, and/or other instruments equated with them.
2. Contract: Wadi’ah
3. Requirements 3.1. The Bank acts as the recipient of the deposited funds and the customer acts as the depositor.
3.2. The Bank may manage or use the customer's deposited funds.
3.3. The Bank is not permitted to promise the provision of remuneration or bonuses to customers.

3.4. The Bank guarantees the return of the customer's deposited funds.
3.5. The Bank and customer formalize their agreement on the opening and use of the savings product in the form of a written agreement, using forms, or other forms that can be equated with it.
3.6. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.7. The Bank has policies and procedures for risk mitigation.
3.8. The Bank has adequate recording and account administration systems.
3.9. Savings account opening requirements must take into account related regulations:
a. Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT); b. Product information transparency;
c. Customer protection in the financial services sector;
d. Deposit insurance by the Indonesia Deposit Insurance Corporation (LPS); e. Bank institutionalization; and f. Other related regulations.
4. Characteristics 4.1 The Bank may set customer targets, namely individuals and/or non-individuals.
4.2 The Bank may provide savings books or account statements.
4.3 The Bank may set specific initial deposits.
4.4 The Bank may set specific minimum balances.
4.5 The Bank may charge account administration fees consisting of costs directly related to savings account management costs, including costs for printing transaction reports and account balances, opening fees, and closing fees.
4.6 The Bank may issue savings accounts in Rupiah and foreign currency (specifically for foreign currency savings, this only applies to Banks that have received approval to conduct business activities in foreign currency).
4.7 The Bank may deduct zakat or infaq from bonuses received by customers according to the customer's request in the savings account opening agreement.
4.8 The Bank may provide ATM and/or e-banking facilities in accordance with Bank policy and applicable regulations.
4.9 The Bank may issue special savings accounts for students by meeting the following requirements:
a. The Bank sets policies including those related to account opening, initial deposits, subsequent deposits, minimum balance, administration fees, bonus provision, dormant account status, and procedures for cash deposits and withdrawals from savings. b. Account opening is carried out through cooperation between the school and the Bank (the form of cooperation is adjusted to each Bank's policy).
c. One student is only permitted to have one savings account at 1 (one) same Bank and is not permitted to have a joint account with "and/or" status.
d. Parents/guardians may grant power of attorney to the school (designated school officials) or other parties for the opening of savings accounts. e. Withdrawals, deposits, and transfers can be served at the school and all Bank channels in accordance with Bank policy. f. Offline transactions are subject to the policy of each respective Bank.
4.10 The Bank may provide promotional gifts in the context of promotion by meeting the following requirements:
a. promotional gifts are not agreed upon, do not lead to disguised riba practices and/or do not become a custom (habit); b. promotional gifts must be in the form of goods and/or services (not in the form of money);
c. in the event that promotional gifts are in the form of goods, the promotional gifts must be tangible and halal items; and
d. promotional gifts are given before the occurrence of the wadi’ah contract.

5. Purpose/
Benefits a. For
Banks
5.a.1. A source of funding for the Bank.
One source of income from follow-up activities utilizing savings funds. b. For Customers 5.b.1. Ease in managing liquidity in terms of deposits, withdrawals, transfers, and flexible transaction payments. 5.b.2. Can obtain remuneration or bonuses.
6. Risk
Identification
6.1. The Bank faces potential liquidity risk caused by fluctuations in funds in savings accounts, so the Bank must reserve funds with liquid assets without disrupting the Bank's activities and financial condition.
6.2. The Bank faces potential market risk caused by changes (fluctuations) in exchange rates when issuing savings accounts in foreign currency.
7. Related
Regulations
Related regulations include:
7.1. PBI No.7/6/PBI/2005 on Product Information Transparency and Use of Customer Personal Data and SEBI No.7/25/DPNP along with its amendments.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Raising and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendments.
7.3. PBI No.11/11/PBI/2009 on Payment Instruments Using Cards as amended by PBI No.14/2/PBI/2012 and SEBI No. 11/10/DASP as amended by SEBI No. 14/17/DASP along with its amendments.
7.4. PBI No.13/23/PBI/2011 on Risk Management Implementation for Sharia Commercial Banks and Sharia Business Units along with its amendments.
7.5. PBI No.14/27/PBI/2012 on AML/CFT Program Implementation for Commercial Banks and
SEBI No. 15/21/DPNP along with its amendments.
7.6. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Core Capital of Banks along with its amendments.
7.7. POJK No.1/POJK.07/2013 on Financial Services Sector Consumer Protection along with its amendments.
7.8. PBI No.16/16/PBI/2014 on Foreign Exchange Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendments.
7.9. PBI No.16/17/PBI/2014 on Foreign Exchange Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendments.
7.10. SEOJK No.12/SEOJK.07/2014 on Information Submission in the Context of Marketing Products and/or Financial Services along with its amendments.
7.11. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendments.
7.12. SEOJK No.14/SEOJK.07/2014 on Confidentiality and Security of Consumer Personal Data and/or Information along with its amendments.
8. Sharia
Fatwa
National Sharia Board (DSN) Fatwa
8.1. DSN Fatwa No.02/DSN-MUI/IV/2000 on Savings.
8.2. DSN Fatwa No.86/DSN-MUI/XII/2012 on Gifts in Fund Raising by Sharia Financial Institutions.
9. Accounting
System/
Recording
Indonesian Sharia Banking Accounting Guidelines (PAPSI)
10. Applies to BOOK 1, BOOK 2, BOOK 3, and BOOK 4.
I.2. INVESTMENTS
I.2.1. CURRENT ACCOUNTS

1. Definition: Customer fund investments at the Bank that can be withdrawn according to agreement using checks, giro slips, other payment order instruments, or through transfer orders.
2. Contracts 2.1. Mudharabah Mutlaqah
2.2. Mudharabah Muqayyadah
3. Requirements 3.1. The Bank acts as the fund manager and the customer acts as the fund owner.
3.2. In the event that current accounts use the Mudharabah Mutlaqah contract:
a. The Bank is not limited in using customer funds in fund disbursement activities as long as they do not conflict with Sharia Principles; and b. the customer, as the fund owner, bears the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or losses that do not occur due to the negligence of the Bank as the fund manager, unless the Bank as the fund manager guarantees the entire principal of the customer's funds.
3.3. In the event that current accounts use the Mudharabah Muqayyadah contract:
a. the customer, as the fund owner, provides certain conditions and limitations to the bank, including regarding location, method, and/or investment objects, which are clearly stated in the agreement; and b. the customer, as the fund owner, bears the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or losses that do not occur due to the negligence of the Bank as the fund manager and/or violate the substance of the agreement.
3.4. The Bank and customer state the profit distribution in the form of an agreed nisbah (profit-sharing ratio) and formalized in the account opening contract.
3.5. The Bank is not permitted to reduce the customer's profit share without the customer's consent.
3.6. The Bank and customer formalize their agreement on the opening and use of the current account product in the form of a written agreement, using forms, or other forms that can be equated with it.
3.7. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.8. The Bank has policies and procedures for risk mitigation.
3.9. The Bank has adequate recording and account administration systems.
3.10. The Bank submits account statements (account mutation reports).
3.11. Current account opening requirements must take into account related regulations:
a. Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT); b. National Blacklist (DHN);
c. Product information transparency;
d. Customer protection in the financial services sector; e. Deposit insurance by the Indonesia Deposit Insurance Corporation (LPS); f. Bank institutionalization; and g. Other related regulations.
4. Characteristics 4.1. The Bank may set customer targets, namely individuals and/or non-individuals.
4.2. The Bank may guarantee the return of the customer's principal funds.
4.3. The Bank may set specific initial deposits.
4.4. The Bank may set specific minimum balances.
4.5. The Bank may charge account administration fees consisting of costs directly related to account management costs, including costs for checks/giro slips, stamp duty, printing transaction reports and account balances, opening fees, and closing fees.
4.6. The Bank may issue current accounts in Rupiah and foreign currency (specifically for foreign currency current accounts, this only applies to Banks that have received approval to conduct business activities in foreign currency).
4.7. The Bank may deduct zakat or infaq from principal and/or profit shares received by customers according to the customer's request in the current account opening agreement.

4.8. The Bank may provide ATM and/or e-banking facilities in accordance with Bank policy and applicable regulations.
4.9. The Bank may provide promotional gifts in the context of promotion by meeting the following requirements:
a. promotional gifts are not agreed upon, do not lead to disguised riba practices and/or are not customary (habitual); b. promotional gifts must be in the form of goods and/or services (not in the form of money); and
c. in the event that promotional gifts are in the form of goods, the promotional gifts must be tangible and halal objects.

Objectives/
Benefits a. For the Bank
5.a.1. A source of funding for the Bank.
5.a.2. One source of income from follow-up activities utilizing giro funds. b. For Customers 5.b.1. Facilitating payment and/or receipt of funds activities. 5.b.2. Can obtain profit-sharing.
Risk
Identification
6.1. The Bank faces potential liquidity risk caused by fluctuations in funds in giro accounts, so the Bank must reserve funds with liquid assets without disrupting the Bank's activities and financial condition.
6.2. The Bank faces potential market risk caused by changes (fluctuations) in exchange rates if issuing giro in foreign currency.
6.3. The Bank faces potential yield risk caused by changes in the yield rate paid by the Bank to giro account holders, thereby affecting the behavior of giro account holders.
Related
Provisions
Related provisions include:
7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No.7/25/DPNP along with its amendments.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Gathering and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendments.
7.3. PBI No.11/11/PBI/2009 on Payment Instruments Using Cards as amended by PBI No.14/2/PBI/2012 and SEBI No.11/10/DASP as amended by SEBI No.14/17/DASP along with its amendments.
7.4. PBI No.13/23/PBI/2011 on Risk Management Implementation for Sharia Commercial Banks and Sharia Business Units along with its amendments.
7.5. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No.15/21/DPNP along with its amendments.
7.6. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Bank Core Capital along with its amendments.
7.7. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector along with its amendments.
7.8. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendments.
7.9. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendments.
7.10. SEOJK No.12/SEOJK.07/2014 on Information Disclosure in the Context of Marketing Financial Products and/or Services along with its amendments.
7.11. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendments.
7.12. SEOJK No.14/SEOJK.07/2014 on Confidentiality and Security of Consumer Data and/or Personal Information along with its amendments.
Sharia
Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa No.01/DSN-MUI/IV/2000 on Giro.
8.2. DSN Fatwa No.86/DSN-MUI/XII/2012 on Gifts in Fund Gathering by Sharia Financial Institutions.
Accounting
System/
Recording
9.1. PSAK No.105 on Mudharabah Accounting.
9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable To BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

I.2.2. SAVINGS

Definition Investment of customer funds in the Bank, the withdrawal of which can only be done according to specific terms agreed upon, but cannot be withdrawn with checks, giro drafts, and/or other instruments equivalent to those.
Contract 2.1. Mudharabah Mutlaqah
2.2. Mudharabah Muqayyadah
Requirements 3.1. The Bank acts as the fund manager and the customer acts as the fund owner.
3.2. In the event that savings use the Mudharabah Mutlaqah contract:
a. The Bank is not limited in using customer funds in fund disbursement activities as long as it does not conflict with Sharia Principles; and b. the customer as the fund owner bears the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or loss that occurs not due to the negligence of the Bank as the fund manager, unless the Bank as the fund manager guarantees the entire principal of the customer's funds.
3.3. In the event that savings use the Mudharabah Muqayyadah contract:
a. the customer as the fund owner provides certain conditions and limitations to the Bank, including regarding location, method, and/or investment object, which are clearly stated in the agreement; and b. the customer as the fund owner bears the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or loss that occurs not due to the negligence of the Bank as the fund manager and/or violates the substance of the agreement.
3.4. The Bank and customer conduct profit sharing in the form of an agreed nisbah (ratio) and stated in the account opening contract.
3.5. The Bank is not permitted to reduce the customer's profit sharing ratio without the customer's approval.
3.6. The Bank and customer state their agreement on the opening and use of savings products in the form of a written agreement, using a form, or other forms that can be equated to those.
3.7. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.8. The Bank has policies and procedures for risk mitigation.
3.9. The Bank has adequate recording and account administration systems.
3.10. In the event that savings are time-bound or planned savings, the withdrawal of funds by the customer can only be done according to the agreed time.
3.11. Savings account opening requirements must take into account related regulations:
a. Anti-Money Laundering/Counter-Terrorism Financing Program (APU/PPT); b. Product information transparency;
c. Customer protection in the financial services sector;
d. Deposit insurance by the Deposit Insurance Corporation (LPS); e. Bank institutionalization; and f. Other related regulations.
Characteristics 4.1. The Bank may set customer targets, namely individuals and/or non-individuals.
4.2. The Bank may issue savings books or account statements.
4.3. The Bank may set specific initial deposits.
4.4. The Bank may set specific minimum balances.
4.5. The Bank may charge account administration fees in the form of costs directly related to account management costs, including costs for printing transaction reports and account balances, account opening costs, and account closure costs.
4.6. The Bank may issue savings in Rupiah and foreign currency (specifically for savings in foreign currency, this only applies to Banks that have received approval to conduct business activities in foreign currency).
4.7. The Bank may deduct zakat or infaq from the profit-sharing received by the customer according to the customer's request in the savings account opening agreement.
4.8. The Bank may add Sharia insurance coverage features (only applies to Banks that have received bancassurance approval).
4.9. The Bank may provide ATM and/or e-banking facilities in accordance with Bank policy and applicable regulations.
4.10. The Bank may issue special savings for students by meeting the following requirements:
a. The Bank sets policies including regarding account opening, initial deposits, subsequent deposits, minimum balance, administration fees, profit-sharing provision, dormant account status, and procedures for depositing and withdrawing cash from savings. b. Account opening is conducted through cooperation between the school and the Bank (the form of cooperation is adjusted to each Bank's policy).
c. One student is only permitted to have one savings account in one (1) same Bank and is not permitted to have a joint account with "and/or" status.
d. Parents/guardians may grant power of attorney to the school (designated school officials) or other parties for the opening of savings accounts. e. Withdrawal, deposit, and transfer services can be provided at the school and all Bank channels in accordance with Bank policy. f. Offline transactions are subject to the policy of each respective Bank.
4.11. The Bank may provide promotional gifts in the context of promotion by meeting the following requirements:
a. promotional gifts are not agreed upon, do not lead to disguised riba practices and/or are not customary (habitual); b. promotional gifts must be in the form of goods and/or services (not in the form of money); and
c. in the event that promotional gifts are in the form of goods, the promotional gifts must be tangible and halal objects.
4.12. Savings can be ordinary savings or time-bound/planned savings. In the event that savings are time-bound or planned savings:
a. the savings have a specific agreed duration; b. the savings have an agreed purpose;
c. savings deposits can be made through autodebit or other agreed media (in the event of autodebit, the Bank notifies the customer if there is a failure in the autodebit process);
d. savings profit-sharing can increase the savings principal or be transferred to an agreed account; and e. reporting media can be in the form of account statements or e-statements.
Objectives/
Benefits a. For the Bank
5.a.1. A source of funding for the Bank.
5.a.2. One source of income from follow-up activities utilizing savings funds. b. For Customers 5.b.1. Ease in liquidity management regarding deposits, withdrawals, transfers, and flexible payment transactions. 5.b.2. Can obtain profit-sharing.
Risk
Identification
6.1. The Bank faces potential liquidity risk caused by fluctuations in funds in savings accounts, so the Bank must reserve funds with liquid assets without disrupting the Bank's activities and financial condition.
6.2. The Bank faces potential market risk caused by changes (fluctuations) in exchange rates if issuing savings in foreign currency.
Related
Provisions
Related provisions include:
7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No.7/25/DPNP along with its amendments.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Gathering and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendments.
7.3. PBI No.11/11/PBI/2009 on Payment Instruments Using Cards as amended by PBI No.14/2/PBI/2012 and SEBI No.11/10/DASP as amended by SEBI No.14/17/DASP along with its amendments.
7.4. PBI No.13/23/PBI/2011 on Risk Management Implementation for Sharia Commercial Banks and Sharia Business Units along with its amendments.
7.5. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No. 15/21/DPNP along with its amendments.
7.6. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Bank Core Capital along with its amendments.
7.7. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector along with its amendments.
7.8. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendments.
7.9. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendments.
7.10. SEOJK No.12/SEOJK.07/2014 on Information Disclosure in the Context of Marketing Financial Products and/or Services along with its amendments.
7.11. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendments.
7.12. SEOJK No.14/SEOJK.07/2014 on Confidentiality and Security of Consumer Data and/or Personal Information along with its amendments.
Sharia
Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa No.02/DSN-MUI/IV/2000 on Savings.
8.2. DSN Fatwa No.86/DSN-MUI/XII/2012 on Gifts in Fund Gathering by Sharia Financial Institutions.
Accounting
System/
Recording
9.1. PSAK No.105 on Mudharabah Accounting.
9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable To BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

I.2.3. TIME DEPOSITS

Definition Investment of customer funds in the Bank, the withdrawal of which can only be done at a specific time agreed upon based on a contract between the depositing customer and the Bank.
Contract 2.1. Mudharabah Mutlaqah
2.2. Mudharabah Muqayyadah
Requirements 3.1. The Bank acts as the fund manager and the customer acts as the fund owner.
3.2. In the event that time deposits use the Mudharabah Mutlaqah contract:
a. The Bank is not limited in using customer funds in fund disbursement activities as long as it does not conflict with Sharia Principles; and b. the customer as the fund owner bears the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or loss that occurs not due to the negligence of the Bank as the fund manager, unless the Bank as the fund manager guarantees the entire principal of the customer's funds.
3.3. In the event that time deposits use the Mudharabah Muqayyadah contract:
a. the customer as the fund owner provides certain conditions and limitations to the Bank, including regarding location, method, and/or investment object, which are clearly stated in the agreement; and b. the customer as the fund owner bears the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or loss that occurs not due to the negligence of the Bank as the fund manager and/or violates the substance of the agreement.
3.4. The Bank and customer conduct profit sharing in the form of an agreed nisbah (ratio) and stated in the account opening contract.
3.5. The Bank is not permitted to reduce the customer's profit sharing ratio without the customer's approval.
3.6. The Bank and customer state their agreement on the opening and use of time deposit products in the form of a written agreement, using a form, or other forms that can be equated to those.
3.7. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.8. The Bank has policies and procedures for risk mitigation.
3.9. The Bank has adequate recording and account administration systems.
3.10. Time deposit account opening requirements must take into account related regulations:
a. Anti-Money Laundering/Counter-Terrorism Financing Program (APU/PPT); b. Product information transparency;
c. Customer protection in the financial services sector;
d. Deposit insurance by the Deposit Insurance Corporation (LPS); e. Bank institutionalization; and f. Other related regulations.
Characteristics 4.1. The Bank may set customer targets, namely individuals and/or non-individuals.
4.2. The Bank may set specific durations.
4.3. The Bank may set specific nominal amounts.
4.4. The Bank may charge account administration fees in the form of costs directly related to account management costs, including account opening costs and account closure costs.
4.5. The Bank may issue time deposits in Rupiah and foreign currency (specifically for time deposits in foreign currency, this only applies to Banks that have received approval to conduct business activities in foreign currency).
4.6. The Bank may deduct zakat or infaq from the profit-sharing received by the customer according to the customer's request in the time deposit account opening agreement.
4.7. Matured time deposits can be automatically renewed (automatic roll over) in accordance with the agreement.
4.8. Time deposit profit-sharing can increase the deposit principal or be transferred to another account such as a giro or savings account according to the customer's request.
4.9. Time deposits can be ordinary time deposits or deposit on call:
a. In the event of ordinary time deposits, the Bank may impose penalties if the customer withdraws funds before maturity; b. In the event of deposit on call:
1) The customer must inform the Bank in advance if they intend to withdraw deposit on call funds.
2) The maximum duration is 30 (thirty) days.
4.10. The Bank may provide promotional gifts in the context of promotion by meeting the following requirements:
a. promotional gifts are not agreed upon, do not lead to disguised riba practices and/or are not customary (habitual); b. promotional gifts must be in the form of goods and/or services (not in the form of money); and
c. in the event that promotional gifts are in the form of goods, the promotional gifts must be tangible and halal objects.
Objectives/
Benefits a. For the Bank
5.a.1. A source of funding for the Bank.
5.a.2. One source of income from follow-up activities utilizing time deposit funds. b. For Customers Can obtain profit-sharing.
Risk
Identification
6.1. The Bank faces potential liquidity risk caused by matured time deposits, so the Bank must fulfill obligations for matured time deposits with liquid assets without disrupting the Bank's activities and financial condition.
6.2. The Bank faces potential market risk caused by changes (fluctuations) in exchange rates if issuing time deposits in foreign currency.
6.3. The Bank faces potential yield risk caused by changes in the yield rate paid by the Bank to time deposit holders, thereby affecting the behavior of time deposit holders.
Related
Provisions
Related provisions include:
7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No.7/25/DPNP along with its amendments.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Gathering and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendments.
7.3. PBI No.13/23/PBI/2011 on Risk Management Implementation for Sharia Commercial Banks and Sharia Business Units along with its amendments.
7.4. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No. 15/21/DPNP along with its amendments.
7.5. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Bank Core Capital along with its amendments.
7.6. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector along with its amendments.
7.7. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendments.
7.8. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendments.
7.9. SEOJK No.12/SEOJK.07/2014 on Information Disclosure in the Context of Marketing Financial Products and/or Services along with its amendments.
7.10. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendments.
7.11. SEOJK No.14/SEOJK.07/2014 on Confidentiality and Security of Consumer Data and/or Personal Information along with its amendments.
Sharia
Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa No.03/DSN-MUI/IV/2000 on Time Deposits.
8.2. DSN Fatwa No.86/DSN-MUI/XII/2012 on Gifts in Fund Gathering by Sharia Financial Institutions.
Accounting
System/
Recording
9.1. PSAK No.105 on Mudharabah Accounting.
9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable To BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

I.3. SHARIA CERTIFICATE OF DEPOSIT IN CERTIFICATE FORM

Definition Savings in the form of time deposits based on Sharia Principles, the certificate of which can be transferred by meeting certain conditions.
Contract Refers to regulations governing Sharia certificates of deposit.
Requirements Refers to regulations governing Sharia certificates of deposit.
Characteristics Refers to regulations governing Sharia certificates of deposit.
Objectives/
Benefits a. For the Bank One source of funding for the Bank. b. For Customers Can obtain profit-sharing.
Risk
Identification
6.1. The Bank faces potential liquidity risk caused by matured deposits, so the Bank must fulfill obligations for matured deposits with liquid assets without disrupting the Bank's activities and financial condition.
6.2. The Bank faces potential market risk caused by changes (fluctuations) in exchange rates if issuing Sharia certificates of deposit in foreign currency.
6.3. The Bank faces potential yield risk caused by changes in the yield rate paid by the Bank to holders of Sharia certificates of deposit, thereby affecting the behavior of holders of Sharia certificates of deposit.
Related
Provisions
Related provisions include:
7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No. 7/25/DPNP along with its amendments.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Gathering and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendments.
7.3. PBI No.13/23/PBI/2011 on Risk Management Implementation for Sharia Commercial Banks and Sharia Business Units along with its amendments.
7.4. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No.15/21/DPNP along with its amendments.
7.5. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Bank Core Capital along with its amendments.
7.6. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector along with its amendments.
7.7. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by

amended with PBI No.17/6/PBI/2015 along with its amendment provisions.
7.8. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendment provisions.
7.9. POJK No.10/POJK.03/2015 on the Issuance of Deposit Certificates by Banks and SEOJK regulating the issuance of Islamic deposit certificates.
7.10. SEOJK No.12/SEOJK.07/2014 on the Submission of Information in the Context of Marketing Financial Products and/or Financial Services along with its amendment provisions.
7.11. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendment provisions.
7.12. SEOJK No.14/SEOJK.07/2014 on the Confidentiality and Security of Consumer Data and/or Personal Information along with its amendment provisions.

Sharia Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa regarding Islamic deposit certificates.
Accounting System/
Recording
9.1. PSAK No.105 on Mudharabah Accounting.
9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable to BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

I.4. RECEIVED LOANS/FINANCING

Definition Loans or financing received from banks or third parties that are not banks.
Contracts 2.1 Musyarakah
2.2 Mudhabarah
2.3 Qardh
Requirements 3.1. Banks are required to disclose details of received loans/financing regarding:
a. Type (source of funds) of received loans; b. Tenor, remuneration (if any), and maturity of received loans or financing;
c. Currency type (Rupiah and foreign currency);
d. Associated obligations; e. Value of pledged bank assets; and f. Related party relationships.
3.2. Received loans/financing are recognized at nominal value at the time the agreement is signed or when an agreement is reached between the receiving bank and the lending/financing bank.
Characteristics 4.1. Banks may provide profit-sharing on received loans/financing.
4.2. Banks may receive loans/financing in Rupiah or foreign currency (specifically for loans/financing in foreign currency, this only applies to Banks that have obtained approval to conduct business activities in foreign currency).
4.3. Banks may receive loans/financing from domestic and/or foreign sources. In the event that loans/financing originate from abroad, they must comply with regulations governing foreign loans for Banks.
4.4. Long-term loans/financing originating from abroad must obtain approval from Bank Indonesia.
Purpose/
Benefits a. For Banks It serves as an instrument for liquidity control. b. For Customers They can obtain profit-sharing.
Risk
Identification
6.1. Banks face potential liquidity risk when loans/financing mature if there is a large maturity gap between liquid assets and liquid liabilities.
6.2. Banks face potential market risk caused by exchange rate (fluctuation) changes for banks receiving loans in foreign currency.
Related
Provisions
Related provisions include:
7.1. PBI No.7/1/PBI/2005 on Foreign Loans for Banks.
7.2. PBI No.13/23/PBI/2011 on Risk Management Implementation for Islamic Commercial Banks and Islamic Business Units.
7.3. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Core Capital of Banks.
7.4. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendment provisions.
7.5. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendment provisions.
Sharia Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa No.07/DSN-MUI/IV/2000 on Mudharabah Financing (Qiradh).
8.2. DSN Fatwa No.08/DSN-MUI/IV/2000 on Musyarakah Financing.
8.3. DSN Fatwa No.19/DSN-MUI/IV/2001 on Al-Qardh.
Accounting System/
Recording
Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable to BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

II. FUND DISBURSEMENT
II.1. FINANCING BASED ON PROFIT-SHARING PRINCIPLES II.1.1. MUDHARABAH FINANCING

Definition Provision of funds for business cooperation between two parties where the fund provider provides all funds, while the fund manager acts as the manager, and profits are shared among them according to an agreed ratio.
Contracts 2.1. Mudharabah Mutlaqah
2.2. Mudharabah Muqayyadah
Requirements 3.1. The Bank acts as the fund provider and the customer acts as the fund manager.
3.2. In the event that financing uses:
a. Mudharabah Mutlaqah contract, then the Bank as the fund provider grants freedom to the customer as the fund manager in managing the funds. b. Mudharabah Muqayyadah contract, then the Bank as the fund provider provides specific limitations to the customer as the fund manager, including regarding location, method, and/or investment object.
3.3. Customer business activities must not conflict with Sharia Principles.
3.4. The repayment period for funds and the sharing of business results from fund management are determined based on agreement between the Bank and the customer.
3.5. The sharing of business results from fund management is expressed in an agreed profit-sharing ratio.
3.6. Business result sharing is conducted based on the customer's business result report.
3.7. The agreed profit-sharing ratio cannot be changed throughout the financing period, except based on agreement between the parties.
3.8. The Bank and customer bear losses proportionally according to their respective capital portions.
In the event that the customer commits negligence, fraud, and/or violates the agreement resulting in business loss, then:
a. The Bank is not responsible for the losses incurred; and b. The customer is required to return the remaining financing provided by the Bank and the profit-sharing that has become the Bank's right but has not yet been paid.
3.9. The Bank conducts analysis of customer financing applications which include among others personal aspects such as character analysis and/or business aspects including among others business capacity analysis (capacity), financial (capital), and/or business prospects (condition).
3.10. The Bank and customer formalize the financing agreement in a written agreement.
3.11. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.12. The Bank has policies and procedures for risk mitigation.
3.13. The Bank has adequate recording and account administration systems.
Characteristics 4.1. The Bank can set financing segments, namely Micro Small Enterprises (UMK), non-UMK, individuals, or business entities/legal entities.
4.2. The Bank can provide financing in Rupiah or foreign currency (specifically for financing in foreign currency, this only applies to Banks that have obtained approval to conduct business activities in foreign currency).
4.3. The Bank can provide financing used for working capital and/or investment purposes.
4.4. The Bank can set specific ceiling amounts.
4.5. The Bank can set specific tenors.
4.6. The Bank can request guarantees from customers at the time of financing disbursement.
4.7. The Bank can charge administrative fees in accordance with agreements, the amount of which corresponds to the actual related costs.
4.8. The financing profit-sharing ratio can be determined according to agreement or tiered. The method of determining the ratio is agreed upon at the beginning of the contract and can be changed according to agreement.
4.9. Financing disbursement by the Bank can be done in a lump sum or in stages.
4.10. Financing repayment by the customer can be done in two ways, namely:
a. periodically in accordance with the customer's business cash inflow projections; or b. in a lump sum at the end of financing (for financing with a tenor of up to 1 (one) year).
4.11. The financing profit-sharing method refers to the Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Purpose/
Benefits a. For Banks 5.a.1. As one form of fund disbursement.
5.a.2. Obtaining income in the form of profit-sharing according to the business income managed by the customer. b. For Customers Meeting business capital needs.
Risk
Identification
6.1. Banks face potential credit risk caused by customer default or breach of contract.
6.2. Banks face potential market risk caused by exchange rate movements if financing is provided in foreign currency.
6.3. Banks face potential operational risk caused by inadequate internal processes, internal process failures, human error, system failures, and/or external events affecting Bank operations.
Related
Provisions
Related provisions include:
7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No.7/25/DPNP along with its amendment provisions.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Collection and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendment provisions.
7.3. PBI No.13/23/PBI/2011 on Risk Management Implementation for Islamic Commercial Banks and Islamic Business Units along with its amendment provisions.
7.4. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No.15/21/DPNP along with its amendment provisions.
7.5. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Core Capital of Banks along with its amendment provisions.
7.6. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector along with its amendment provisions.
7.7. POJK No.16/POJK.03/2014 on Asset Quality Assessment for Islamic Commercial Banks and Islamic Business Units and SEOJK No.8/SEOJK.03/2015 along with its amendment provisions.
7.8. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendment provisions.
7.9. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendment provisions.
7.10. SEOJK No.12/SEOJK.07/2014 on the Submission of Information in the Context of Marketing Financial Products and/or Financial Services along with its amendment provisions.
7.11. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendment provisions.
7.12. SEOJK No.14/SEOJK.07/2014 on the Confidentiality and Security of Consumer Data and/or Personal Information along with its amendment provisions.
Sharia Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa No.07/DSN-MUI/IV/2000 on Mudharabah Financing (Qiradh).
8.2. DSN Fatwa No.43/DSN-MUI/VIII/2004 on Compensation (Ta’widh).
Accounting System/
Recording
9.1. PSAK No.105 on Mudharabah Accounting.
9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable to BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

II.1.2. MUSYARAKAH FINANCING

Definition Provision of funds for specific business cooperation where each party provides a portion of funds with the stipulation that profits will be shared according to an agreed ratio, while losses are borne according to each party's fund portion.
Contracts Musyarakah
Requirements 3.1. The Bank and customer each act as business partners by jointly providing funds to finance a specific business activity.
3.2. Customer business activities must not conflict with Sharia Principles.
3.3. The financing period, fund repayment, and sharing of business results are determined based on agreement between the Bank and the customer.
3.4. The sharing of business results from fund management is expressed in an agreed profit-sharing ratio.
3.5. Business result sharing is conducted based on the customer's business result report.
3.6. The agreed profit-sharing ratio cannot be changed throughout the financing period, except based on agreement between the parties.
3.7. The Bank and customer bear losses proportionally according to their respective capital. In the event that the customer commits negligence, fraud, and/or violates the agreement resulting in business loss, then:
a. The Bank is not responsible for the losses incurred; and b. The customer is required to return the remaining financing provided by the Bank and the profit-sharing that has become the Bank's right but has not yet been paid.
3.8. The customer acts as the business manager and the Bank as a business partner may participate in business management according to agreed duties and authorities, such as conducting reviews and/or requesting business result reports made by the customer based on supporting evidence that can be accounted for.
3.9. The Bank conducts analysis of customer financing applications which include among others personal aspects such as character analysis and/or business aspects including among others business capacity analysis (capacity), financial (capital), and/or business prospects (condition).
3.10. The Bank and customer formalize the financing agreement in a written agreement.
3.11. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.12. The Bank has policies and procedures for risk mitigation.
3.13. The Bank has adequate recording and account administration systems.
3.14. The Bank or customer may propose that if profits exceed a certain amount, the excess or percentage can be given to one party according to agreement.
Characteristics 4.1. The Bank can set financing segments, namely Micro Small Enterprises (UMK), non-UMK, individuals, or business entities/legal entities.
4.2. The Bank can provide financing in Rupiah or foreign currency (specifically for financing in foreign currency, this only applies to Banks that have obtained approval to conduct business activities in foreign currency).
4.3. The Bank can provide financing for working capital and/or investment purposes.
4.4. The Bank can set specific ceiling amounts.
4.5. The Bank can set specific tenors.
4.6. The Bank can request guarantees from customers at the time of financing disbursement.
4.7. The Bank can charge administrative fees in accordance with agreements, the amount of which corresponds to the actual related costs.
4.8. The profit-sharing ratio can be set proportionally and according to agreement and tiered. The method of determining the ratio is agreed upon at the beginning of the contract and can be changed.
4.9. Financing disbursement can be done in a lump sum or in stages.
4.10. Financing repayment can be done in two ways, namely:
a. periodically in accordance with the customer's business cash inflow projections; or b. in a lump sum at the end of financing (for financing with a tenor of up to 1 (one) year).
4.11. The Bank or customer may propose that if profits exceed a certain amount, the excess or percentage can be given to one party according to agreement as long as it does not harm the fund-owning customer.
4.12. The financing profit-sharing method refers to the Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Purpose/
Benefits a. For Banks 5.a.1. As one form of fund disbursement.
5.a.2. Obtaining income in the form of profit-sharing according to the business income managed by the customer. b. For Customers Meeting business capital needs.
Risk
Identification
6.1. Banks face potential credit risk caused by customer default or breach of contract.
6.2. Banks face potential market risk caused by exchange rate movements if financing is provided in foreign currency.
6.3. Banks face potential operational risk caused by inadequate internal processes, internal process failures, human error, system failures, and/or external events affecting Bank operations.
Related
Provisions
Related provisions include:
7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No.7/25/DPNP along with its amendment provisions.
7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Collection and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS along with its amendment provisions.
7.3. PBI No.13/23/PBI/2011 on Risk Management Implementation for Islamic Commercial Banks and Islamic Business Units along with its amendment provisions.
7.4. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No. 15/21/DPNP along with its amendment provisions.
7.5. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Core Capital of Banks along with its amendment provisions.
7.6. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector along with its amendment provisions.
7.7. POJK No.16/POJK.03/2014 on Asset Quality Assessment for Islamic Commercial Banks and Islamic Business Units and SEOJK
No.8/SEOJK.03/2015 along with its amendment provisions.
7.8. PBI No.16/16/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 along with its amendment provisions.
7.9. PBI No.16/17/PBI/2014 on Foreign Currency Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 along with its amendment provisions.
7.10. SEOJK No.12/SEOJK.07/2014 on the Submission of Information in the Context of Marketing Financial Products and/or Financial Services along with its amendment provisions.
7.11. SEOJK No.13/SEOJK.07/2014 on Standard Agreements along with its amendment provisions.
7.12. SEOJK No.14/SEOJK.07/2014 on the Confidentiality and Security of Consumer Data and/or Personal Information along with its amendment provisions.
Sharia Fatwa National Sharia Council Fatwa
8.1. DSN Fatwa No.08/DSN-MUI/IV/2000 on Musyarakah Financing.
8.2. DSN Fatwa No.43/DSN-MUI/VIII/2004 on Compensation (Ta’widh).
8.3. DSN Fatwa No.55/DSN-MUI/V/2007 on Sharia Current Account Financing Musyarakah.
Accounting System/
Recording
9.1. PSAK No.106 on Musyarakah Accounting.
9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).
Applicable to BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

II.1.2. MUSYARAKAH MUTANAQISAH FINANCING (MMQ)

Definition Musyarakah financing where the ownership of assets (goods) or capital of one party (partner) decreases due to gradual purchase by the other party.
Contracts Musyarakah and Bai’
Requirements 3.1. Must meet Musyarakah financing requirements including:
a. The Bank and customer provide capital contributions based on agreement; b. Profits are shared according to the agreed ratio; and
c. Losses are borne according to capital proportion.
3.2. Business capital from the parties (Bank and customer) is expressed in the form of ownership portions (hishshah).
3.3. Business capital that has been expressed in the form of ownership portions (hishshah) must not decrease while the contract is effectively in force.
3.4. The Bank promises to sell its entire ownership portion (hishshah) gradually and the customer is obligated to buy it.
3.5. The Bank transfers its entire ownership portion (hishshah) to the customer after the sale is settled.
3.6. Profits obtained from renting out Musyarakah Mutanaqisah (MMQ) assets are shared according to the ratio agreed upon in the contract, while losses are shared based on ownership portions (hishshah). In the event of customer default, the customer returns the Musyarakah Mutanaqisah (MMQ) asset that is the object of the partnership in order to return the Bank's remaining ownership portion.
3.7. The financing period is determined based on agreement between the Bank and the customer.
3.8. The Bank conducts analysis of customer financing applications which include among others personal aspects such as character analysis and/or business aspects including among others business capacity analysis (capacity), financial (capital), and/or business prospects (condition).
3.9. The Bank and customer formalize the financing agreement in a written agreement or other form that can be equated to it.
3.10. The Bank applies product information transparency and customer protection in accordance with applicable regulations.
3.11. The Bank has policies and procedures for risk mitigation.
3.12. The Bank has adequate recording and account administration systems.
Characteristics 4.1. The Bank can set financing segments, namely Micro Small Enterprises (UMK), non-UMK, individuals, or business entities/legal entities.
4.2. The Bank can provide financing in Rupiah or foreign currency (specifically for financing in foreign currency, this only applies to Banks that have obtained approval to conduct business activities in foreign currency).
4.3. The Bank can provide financing used for investment and/or consumption purposes.
4.4. The Bank can set specific ceiling amounts.
4.5. The Bank can set specific tenors.
4.6. The Bank can request guarantees from customers at the time of financing disbursement.
4.7. The Bank can charge administrative fees in accordance with agreements, the amount of which corresponds to the actual related costs.
4.8. The profit-sharing ratio can be set in a tiered manner, with different amounts based on agreement at the beginning of the contract.
4.9. Musyarakah Mutanaqisah (MMQ) assets can be rented to the customer or other parties. In the event that Musyarakah Mutanaqisah (MMQ) assets are rented to the partner customer, the rental payments recorded at the Bank can be used as evidence of business income.
4.10. The Bank can review the ujrah (rental fee) of Musyarakah Mutanaqisah (MMQ) asset rentals if it meets the following conditions:
a. a change in the contract period occurs; b. there is a very strong indication that if a review is not conducted, losses will arise for one of the parties;
c. it is agreed upon by both parties (Bank and customer or other party renting).
4.11. The profit-sharing method refers to the Indonesian Sharia Banking Accounting Guidelines (PAPSI).
4.12. Musyarakah Mutanaqisah (MMQ) assets can be:
a. tangible assets or available/ready stock; and/or b. intangible assets or orders.
In the event that Musyarakah Mutanaqisah (MMQ) assets are intangible goods or orders, they must meet the following requirements:
a. using the Musyarakah Mutanaqisah (MMQ) contract and ijarah maushufah fi al-dzimmah. b. in the event that financing is intended for property ownership, it must also meet the following:
1) meet the requirements as regulated in provisions regarding loan to value ratio or financing to value ratio for property credit or financing and down payments for motor vehicle credit or financing, including:
a) the financing is first-ranking property financing; b) there is a cooperation agreement between the Bank and the developer which at least contains the developer's commitment to complete the property according to the agreement with the customer; c) there is a guarantee provided by the developer to the Bank

that originate from the developer themselves or other parties that can be used to settle the developer's obligations if the property cannot be completed and/or cannot be handed over according to the agreement; and

d) disbursement of property financing can only be done in stages according to the development progress of the financed property.

2) In the cooperation agreement between the Bank and the developer, there must be clauses regarding the clarity of the financed object related to:

a) quantity and quality; b) criteria and specifications; and c) construction period and handover time.

3) In the Musyarakah Mutanaqisah (MMQ) financing agreement, there must be clauses governing the resolution of issues in case of developer breach of contract.

4) The Bank is required to have policies and criteria for developers who can cooperate with the Bank.

5) The Bank is required to ensure that the developer has the ability to realize the Musyarakah Mutanaqisah (MMQ) asset, which can be indicated by parameters including but not limited to:

a) the land is available, certified, and free from disputes; and b) the developer has obtained a building construction permit in accordance with applicable laws and regulations.

6) Revenue recognition while the Musyarakah Mutanaqisah (MMQ) asset is still under construction refers to the Indonesian Sharia Banking Accounting Guidelines (PAPSI).

c. Profit ratio (profit sharing) is determined based on agreement and can follow changes in capital ownership proportions.

d. Payment of ujrah from the lease of Musyarakah Mutanaqisah (MMQ) assets can be done in cash, deferred, or in stages according to agreement.

Purpose/
Benefits

a. For the Bank
5.a.1. As one form of fund disbursement.
5.a.2. Obtaining income in the form of profit sharing based on rental income from goods.

b. For
Customers
Meeting business capital needs or to own specific assets.

Risk
Identification

6.1. The Bank faces potential credit risk caused by customer breach of contract or default.

6.2. The Bank faces potential market risk caused by exchange rate movements if financing is provided in foreign currency.

6.3. The Bank faces potential operational risk caused by inadequate internal processes, internal process failures, human error, system failures, and/or external events affecting the Bank's operations.

Related
Provisions

Related provisions include:

7.1. PBI No.7/6/PBI/2005 on Transparency of Bank Product Information and Use of Customer Personal Data and SEBI No.7/25/DPNP together with its amendments.

7.2. PBI No.9/19/PBI/2007 on the Implementation of Sharia Principles in Fund Gathering and Disbursement Activities and Bank Sharia Services as amended by PBI No.10/16/PBI/2008 and SEBI No.10/14/DPbS together with its amendments.

7.3. PBI No.13/23/PBI/2011 on Risk Management Implementation for Islamic Commercial Banks and Islamic Business Units together with its amendments.

7.4. PBI No.14/27/PBI/2012 on the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs for Commercial Banks and SEBI No. 15/21/DPNP together with its amendments.

7.5. PBI No.14/26/PBI/2012 on Business Activities and Office Networks Based on Bank Core Capital together with its amendments.

7.6. POJK No.1/POJK.07/2013 on Consumer Protection in the Financial Services Sector together with its amendments.

7.7. POJK No.16/POJK.03/2014 on Asset Quality Assessment for Islamic Commercial Banks and Islamic Business Units and SEOJK No.8/SEOJK.03/2015 together with its amendments.

7.8. PBI No.16/16/PBI/2014 on Foreign Exchange Transactions Against the Rupiah Between Banks and Domestic Parties as amended by PBI No.17/6/PBI/2015 together with its amendments.

7.9. PBI No.16/17/PBI/2014 on Foreign Exchange Transactions Against the Rupiah Between Banks and Foreign Parties as amended by PBI No.17/7/PBI/2015 together with its amendments.

7.10. PBI No. 17/10/PBI/2015 on Loan To Value Ratio or Financing to Value Ratio for Property Credit or Financing and Down Payment for Motor Vehicle Credit or Financing and SEBI No.17/25/DKMP together with its amendments.

7.11. SEOJK No.12/SEOJK.07/2014 on Information Disclosure in the Context of Marketing Financial Products and/or Services together with its amendments.

7.12. SEOJK No.13/SEOJK.07/2014 on Standard Agreements together with its amendments.

7.13. SEOJK No.14/SEOJK.07/2014 on Confidentiality and Security of Consumer Personal Data and/or Information together with its amendments.

Sharia
Fatwa
National Sharia Council Fatwa

8.1. DSN Fatwa No.08/DSN-MUI/IV/2000 on Musyarakah Financing.

8.2. DSN Fatwa No.09/DSN-MUI/IV/2000 on Ijarah Financing.

8.3. DSN Fatwa No.43/DSN-MUI/VIII/2004 on Compensation (Ta’widh).

8.4. DSN Fatwa No.56/DSN-MUI/V/2007 on Ujrah Review Regulations in Sharia Financial Institutions.

8.5. DSN Fatwa No.73/DSN-MUI/XI/2008 on Musyarakah Mutanaqisah.

8.6. DSN Fatwa No.89/DSN-MUI/XII/2013 on Sharia Refinancing.

8.7. DSN-MUI Decision No.01/DSN-MUI/X/2013 dated November 4, 2013 on Implementation Guidelines for Musyarakah Mutanaqisah in Financing.

Accounting
System/
Recording

9.1. PSAK No.106 on Musyarakah Accounting.

9.2. Indonesian Sharia Banking Accounting Guidelines (PAPSI).

Applicable To BOOK 1, BOOK 2, BOOK 3, and BOOK 4.

II.2. FINANCING BASED ON LEASING PRINCIPLES

II.2.1. IJARAH FINANCING

Definition
Provision of funds in the context of transferring the right to use/benefit from an asset for a certain period with rental payment (ujrah) without being followed by the transfer of ownership of the asset itself.
Ijarah Contract
Requirements

3.1. The Bank acts as the owner and/or party having control rights over the leased goods, whether goods or services, which leases the said leased goods to the customer according to agreement.

3.2. Leased goods must be assessable and specifically identifiable and clearly stated, including the amount of rent and its duration.

3.3. Rental payments cannot be made in the form of receivables or in the form of debt forgiveness.

3.4. The Bank may require the customer to be responsible for damage to the leased goods occurring due to breach of contract or customer negligence.

3.5. The Bank conducts analysis of financing applications from customers which includes among others personal aspects such as character analysis (character) and/or business aspects including among others business capacity analysis (capacity), financial (capital), and/or business prospects (condition).

3.6. The Bank and customer put the financing agreement into a written agreement or other form that can be equated to it.

3.7. The Bank applies product information transparency and customer protection according to applicable regulations.

3.8. The Bank has policies and procedures for risk mitigation.

3.9. The Bank has an adequate recording and account administration system.

Characteristics

4.1. The Bank can provide financing in Rupiah or foreign currency (specifically for financing in foreign currency, this only applies to Banks that have obtained approval to conduct business activities in foreign currency).

4.2. The Bank can provide financing for working capital, investment, and/or consumption purposes.

4.3. The Bank can set a specific period.

4.4. The Bank can charge administrative fees according to agreement, the amount of which is in accordance with the actual costs related.

4.5. The Bank can review ujrah if the following conditions are met:

a. there is a change in the contract period; b. there is a very strong indication that if a review is not conducted, losses will arise for one of the parties;
c. agreed upon by both parties (Bank and customer).

4.6. Leased goods are movable or immovable goods that can be utilized.

4.7. The Bank may require the customer to maintain the integrity of the leased goods, and bear the maintenance costs of the leased goods according to agreement, where the description of material and structural maintenance costs must be included in the contract.

4.8. Rental payments can be made in installments or lump sum according to agreement.

Purpose/
Benefits

a. For the Bank
5.a.1. As one form of fund disbursement.
5.a.2. Obtaining income in the form of fees/ujrah.

b. For Customers
5.b.1. Obtaining usage rights over needed goods.
5.b.2. It is a source of financing and Sharia banking services to obtain usage rights over goods.

Risk
Identification

6.1. The Bank faces potential credit risk caused by customer breach of contract or default.

6.2. The Bank faces potential market risk caused by exchange rate movements if financing is provided in foreign currency.

Related
Provisions