Circular Letter of the Financial Services Authority Number 53/SEOJK.03/2016 Regarding the Business Plan of Sharia People's Financing Banks

To:
The Board of Directors of Sharia People's Financing Banks Address.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 53/SEOJK.03/2016

REGARDING

BUSINESS PLAN OF SHARIA PEOPLE'S FINANCING BANKS

In view of the implementation of the Financial Services Authority Regulation Number 37/POJK.03/2016 concerning Business Plans for People's Credit Banks and Sharia People's Financing Banks (State Gazette of the Republic of Indonesia Year 2016 Number 258, Supplement to the State Gazette of the Republic of Indonesia Number 5955), hereinafter referred to as the POJK on BPR and BPRS Business Plans, the Financial Services Authority needs to regulate implementation provisions regarding the BPRS Business Plan in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

1. In order to achieve business objectives in accordance with the established vision and mission, BPRS must prepare a Business Plan by considering external and internal factors that can affect the continuity of the BPRS business, the principle of prudence, the principles of healthy banking, and Sharia principles. The Business Plan must be prepared thoroughly, realistically, and comprehensively so that it can be used as a basis for providing policy direction in carrying out business activities to achieve the BPRS vision and mission.

2. The Business Plan is a written document describing the BPRS business development plan and activities for a certain period, as well as strategies to realize the plan in accordance with the established targets and timeframes.

3. The Business Plan prepared by BPRS as referred to in item 2 includes short-term, medium-term, and/or long-term strategic plans.

The term short-term plan refers to BPRS business activities for a period of 1 (one) year.
The term medium-term plan refers to BPRS business activities for a period of 3 (three) years.
The term long-term strategic plan refers to BPRS business activities for a period of 5 (five) years, with coverage including policy directions for capital strengthening, information technology, and human resources.

Short-term and medium-term plans must be prepared by considering the long-term strategic plan for a period of 5 (five) years established by the BPRS.

4. Considering differences in capital capacity affecting business complexity and BPRS office network regional limitations, the projection period and planning of some content in the preparation of the BPRS Business Plan are differentiated based on core capital, namely:
   a. BPRS with core capital less than IDR 50,000,000,000.00 (fifty billion rupiah); and b. BPRS with core capital of at least IDR 50,000,000,000.00 (fifty billion rupiah).

This differentiation aims to ensure that each BPRS can develop and contribute optimally according to its capital group.

5. The calculation of days referred to in the POJK on BPR and BPRS Business Plans regarding the submission of the Business Plan and its adjustments, changes to the Business Plan, and the Business Plan Realization Report is calendar days.

6. The calculation of days referred to in the POJK on BPR and BPRS Business Plans regarding the submission of the Business Plan Supervision Report is working days.

II. SCOPE OF BPRS BUSINESS PLAN

In accordance with Article 6 of the POJK on BPR and BPRS Business Plans, the BPRS Business Plan must at least include an executive summary, business strategy and policies, financial statement projections, ratio targets and financial positions, fund mobilization plan, fund disbursement plan, capital plan, organizational development plan, information technology and human resources (HR), product issuance plan and new activity implementation, office network development and/or changes, and other information.

1. Executive Summary
   The executive summary must at least include strategic plans and steps to be taken by the BPRS, key financial indicators, and short-term and medium-term targets, as follows:

a. Strategic Plans and Steps
Strategic plans and steps to be taken by the BPRS are explained in the short term for a 1 (one) year period, medium term for a 3 (three) year period, and long-term strategic plan for a 5 (five) year period.

b. Key Financial Indicators
Key financial indicators must at least include BPRS performance and projections of capital factors, asset quality, profitability, and liquidity in accordance with the BPRS health level assessment, as follows:

1. BPRS with core capital less than IDR 50,000,000,000.00 (fifty billion rupiah) must submit BPRS performance:
   a) actual position at the end of October of the year the BPRS Business Plan was prepared; b) projection at the end of December of the year the BPRS Business Plan was prepared; and c) 1 (one) year forward projection presented semi-annually, from capital factors, asset quality, profitability, and liquidity in accordance with the BPRS health level assessment.

The format for the key financial indicators table of the 2018 BPRS Business Plan for BPRS with core capital less than IDR 50,000,000,000.00 (fifty billion rupiah) must at least be as follows:

Key Financial Indicators Table:
(in percent)
No. Key Financial Indicator
Performance
Oct
Projection
Dec
Year 2018
Jun
Dec
1 KPMM Ratio
2 Projected Capital Adequacy Ratio
3 Core Capital Ratio
4 Productive Asset Quality Ratio
5 Non Performing Financing (NPF) Ratio a. Gross b. Net 6 Operational Efficiency Ratio (REO) 7 Income-Generating Asset Ratio 8 Core Operational Net Margin Ratio 9 Return On Assets (ROA) Ratio 10 Cash Ratio (CR) 11 Short Term Mismatch (STM) Ratio 12 Net Imbalan (NI) Ratio 13 Financing to Deposit Ratio (FDR) 14 MSME Financing Ratio against Total Financing

2. BPRS with core capital of at least IDR 50,000,000,000.00 (fifty billion rupiah) submits BPRS performance:
   a) actual position at the end of October of the year the BPRS Business Plan was prepared; b) projection at the end of December of the year the BPRS Business Plan was prepared; c) 1 (one) year forward projection presented semi-annually; and d) end of second and third year projection presented annually, from capital factors, asset quality, profitability, and liquidity in accordance with the BPRS health level assessment.

The format for the key financial indicators table of the 2018 BPRS Business Plan for BPRS with core capital of at least IDR 50,000,000,000.00 (fifty billion rupiah) must at least be as follows:

Key Financial Indicators Table:
(in percent)
No. Key Financial Indicator
Actual
Oct
Projection
Dec
Year
Dec
Dec
2020
Jun
Dec
1 KPMM Ratio
2 Projected Capital Adequacy Ratio
3 Core Capital Ratio
4 Productive Asset Quality Ratio
No. Key Financial Indicator
Actual
Oct
Projection
Dec
Year
Dec
Dec
2020
Jun
Dec
5 Non Performing Financing (NPF) Ratio a. Gross b. Net 6 Operational Efficiency Ratio (REO) 7 Income-Generating Asset Ratio 8 Core Operational Net Margin Ratio 9 Return On Assets (ROA) Ratio 10 Cash Ratio (CR) 11 Short Term Mismatch (STM) Ratio 12 Net Imbalan (NI) Ratio 13 Financing to Deposit Ratio (FDR) 14 MSME Financing Ratio against Total Financing

c. Short-Term and Medium-Term Targets
Short-term targets are BPRS business activity targets for the next 1 (one) year, at least including the reduction of Non Performing Financing (NPF), improvement of intermediary functions, and improvement of efficiency. Medium-term targets are BPRS business activity targets for the next 3 (three) years, at least including efforts to strengthen capital, as well as the application of BPRS corporate governance and risk management policies referring to regulations concerning corporate governance and risk management for BPRS. In the event that there are no specific regulations governing the application of BPRS corporate governance and risk management policies, corporate governance and risk management targets refer to regulations concerning the BPRS health level assessment system.

Presentation format for the Executive Summary refers to:
a. Appendix I.1: Executive Summary - Strategic Plans and Steps b. Appendix I.2: Executive Summary - Key Financial Indicators (For BPRS with core capital less than IDR 50 billion)
c. Appendix I.3: Executive Summary - Key Financial Indicators (For BPRS with core capital of at least IDR 50 billion)
d. Appendix I.4: Executive Summary - Short-Term and Medium-Term Targets

2. Business Strategy and Policies
   This section contains explanations regarding business strategy and policies, at least including the BPRS vision and mission, BPRS policy direction, BPRS corporate governance and risk management policies, BPRS position analysis in business competition based on assets and/or location, financing disbursement strategy to debtors by business type including micro, small, and medium enterprises, and business development strategy, as follows:

a. BPRS Vision and Mission
Vision is the goal to be achieved by the BPRS in the medium or long term.
Mission is a statement used to describe the objectives of the BPRS.
BPRS vision and mission are prepared for a 5 (five) year period and submitted by the BPRS annually. The BPRS vision and mission for 2018 to 2023 are submitted for the first time on December 15, 2017 in the 2018 BPRS Business Plan.

b. BPRS Policy Direction
BPRS policy direction is explained in the short term for a 1 (one) year period, medium term for a 3 (three) year period, and long-term strategic plan for a 5 (five) year period, including general policy information established by management in the development of BPRS business in the future, including policy direction in strengthening the application of Sharia principles.

c. BPRS Corporate Governance and Risk Management Policies
Description of BPRS corporate governance and risk management policies includes information on steps in implementing risk management and policies in implementing corporate governance, including remuneration policies including the provision of salaries, bonuses, and other facilities to the Board of Directors, Board of Commissioners, and Sharia Supervisory Board. In the event that there are no specific regulations governing BPRS corporate governance and risk management policies, BPRS corporate governance and risk management policies refer to regulations concerning the BPRS health level assessment system.

d. BPRS Position Analysis in Business Competition Based on Assets and/or Location To conduct a position analysis, BPRS can use SWOT analysis, i.e., Strength, Weakness, Opportunity, and Threat, in facing business competition with other BPRS and/or financial institutions. To conduct a position analysis in business competition based on location, BPRS can use the regional boundaries of regencies, cities, and/or provinces.

e. Financing Disbursement Strategy by Business Type Strategies to realize the financing disbursement plan are grouped by business type, namely financing disbursement strategies for micro, small, and medium enterprises, referring to business criteria based on laws concerning micro, small, and medium enterprises.

f. Business Development Strategy
Description of business development strategy includes information on strategic steps to achieve the established BPRS business objectives, including explanations regarding organizational development and information technology strategies, and strategies to anticipate changes in external conditions.

Presentation format for business strategy and policies refers to Appendix II.

3. Financial Statement Projections
   Financial statement projections must at least include balance sheet projections and profit and loss projections, as well as reasons or considerations regarding the establishment of targets in the preparation of projections, as follows:

a. BPRS with core capital less than IDR 50,000,000,000.00 (fifty billion rupiah) Financial statement projections explained for:

1. actual position at the end of October of the year the BPRS Business Plan was prepared;
2. projection at the end of December of the year the BPRS Business Plan was prepared; and
3. 1 (one) year forward projection presented semi-annually.
   Presentation format for financial statement projections refers to:
4. Appendix III.1: Balance Sheet Projection
5. Appendix IV.1: Profit and Loss Projection

b. BPRS with core capital of at least IDR 50,000,000,000.00 (fifty billion rupiah) Financial statement projections explained for:

1. actual position at the end of October of the year the BPRS Business Plan was prepared;
2. projection at the end of December of the year the BPRS Business Plan was prepared;
3. 1 (one) year forward projection presented semi-annually; and
4. end of second and third year projection presented annually.
   Presentation format for financial statement projections refers to:
5. Appendix III.2: Balance Sheet Projection
6. Appendix IV.2: Profit and Loss Projection

4. Ratio Targets and Financial Positions
   Ratio targets and financial positions must at least include target core financial ratios and target ratios for certain other positions, as well as reasons or considerations regarding the establishment of targets. Core financial ratio targets include ratios that must at least provide information for assessing capital conditions, asset quality, profitability, and liquidity, referring to regulations concerning the BPRS health level assessment system. Target ratios for certain other positions must at least include targets for several ratios related to financing for micro, small, and medium enterprises against total financing, the ratio of education and training funds against total labor costs of the previous year, the ratio of the realization of education and training funds against total budgeted education and training funds, and the ratio of taken-over collateral against total financing.

a. BPRS with core capital less than IDR 50,000,000,000.00 (fifty billion rupiah) Ratio targets and financial positions presented for:

1. actual position at the end of October of the year the BPRS Business Plan was prepared;
2. target at the end of December of the year the BPRS Business Plan was prepared; and
3. target 1 (one) year forward presented semi-annually.
   Presentation format for ratio targets and financial positions refers to Appendix V.1.

b. BPRS with core capital of at least IDR 50,000,000,000.00 (fifty billion rupiah) Ratio targets and financial positions presented for:

1. actual position at the end of October of the year the BPRS Business Plan was prepared;
2. target at the end of December of the year the BPRS Business Plan was prepared;
3. target 1 (one) year forward presented semi-annually; and
4. target at the end of the second and third years presented annually.
   Presentation format for ratio targets and financial positions refers to Appendix V.2.

Calculation formulas for ratio targets and financial positions refer to Appendix V.3.

5. Fund Mobilization Plan
   The fund mobilization plan must at least include:
   a. third-party fund mobilization plan, including mobilization of savings and deposits from related parties and unrelated parties, as well as information on core depositors and depositors; and b. other funding plans, including loans from other banks including linkage programs and/or loans not from banks.

The plan reflects the fund mobilization position for:
a. actual position at the end of October of the year the BPRS Business Plan was prepared; b. projection at the end of December of the year the BPRS Business Plan was prepared; and
c. 1 (one) year forward projection presented semi-annually.
This section also describes the reasons or considerations used in preparing the plan and the BPRS strategy to realize the plan.
Information on core depositors is information on the 25 (twenty-five) largest depositor data, while core depositors is information on the 25 (twenty-five) largest depositor data. Presentation format for the fund mobilization plan refers to:
a. Appendix VI: Third-Party Fund Mobilization Plan b. Appendix VII: Other Funding Plans

6. Fund Disbursement Plan
   The fund disbursement plan must at least include:
   a. fund disbursement plan to related parties
   Related parties are related parties as regulated in regulations concerning the maximum limit of BPRS fund disbursement.
   Presentation format for the fund disbursement plan to related parties refers to Appendix VIII.1.

b. fund placement in other banks
Placement in other banks in the form of:

1. current accounts and/or savings in conventional commercial banks;
2. current accounts, savings, deposits, and/or Sharia certificates of deposit in Sharia commercial banks and Sharia business units; and/or
3. savings and/or deposits in other BPRS.
   Presentation format for the fund placement plan in other banks refers to Appendix VIII.2.

c. financing disbursement plan to other banks
Information on the financing disbursement plan to other banks can be presented individually per bank or cumulatively.
Presentation format for the financing disbursement plan to other banks refers to Appendix VIII.3.

d. financing disbursement plan to core debtors Core debtors are individual debtors or group debtors included in the category of the 25 (twenty-five) largest debtors in the BPRS other than related parties. Presentation format for the financing disbursement plan to core debtors refers to Appendix VIII.4.

e. financing disbursement plan by economic sector that is a priority in financing disbursement The financing disbursement plan is presented by economic sector that is a priority in the BPRS financing disbursement. The economic sector is at most 5 (five) economic sectors with the largest percentage of financing disbursement from the total BPRS financing portfolio. The details of the economic sector are as regulated in the Guidelines for Preparing Monthly BPRS Reports. Presentation format for the financing disbursement plan by economic sector that is a priority in financing disbursement refers to Appendix VIII.5.

f. financing disbursement plan by type of use
The financing disbursement plan is presented by type of use, including working capital financing, investment financing, and consumption financing, as regulated in the Guidelines for Preparing Monthly BPRS Reports. Presentation format for the financing disbursement plan by type of use refers to Appendix VIII.6.

g. financing disbursement plan by business type Grouping of business types including micro, small, and medium enterprises refers to business criteria based on laws concerning micro, small, and medium enterprises. Presentation format for the financing disbursement plan by business type refers to Appendix VIII.7.

h. financing disbursement plan by type of contract The financing disbursement plan is presented by type of contract, including receivables (murabahah, salam, istishna’, and qardh), financing (mudharabah, musyarakah, and others), and leasing (ijarah, ijarah muntahiyah bittamlik, and multijasa). Presentation format for the financing disbursement plan by type of use refers to Appendix VIII.8.

The plan reflects the fund disbursement position for:
a. actual position at the end of October of the year the BPRS Business Plan was prepared; b. projection at the end of December of the year the BPRS Business Plan was prepared; and
c. 1 (one) year forward projection presented semi-annually.
This section also describes the reasons or considerations used in preparing the plan and the BPRS strategy to realize the plan.

7. Capital Plan
   The capital plan must at least include plans to fulfill the minimum capital adequacy ratio (KPMM) and core capital ratio, plans to fulfill minimum core capital, and capital change plans, as follows:

a. Minimum Capital Adequacy Ratio (KPMM) and Core Capital Ratio Fulfillment Plan The KPMM plan must at least include capital projections, Risk-Weighted Assets (RWA) plans, and KPMM ratio plans explained for:

1. actual position at the end of October of the year the BPRS Business Plan was prepared;
2. plan at the end of December of the year the BPRS Business Plan was prepared;
3. plan 1 (one) year forward presented semi-annually; and
4. plan at the end of the second and third years presented annually.
   Plans to fulfill the KPMM ratio and core capital ratio refer to regulations concerning minimum capital adequacy requirements and minimum core capital fulfillment for BPRS. Plans to fulfill the KPMM ratio in the 2018 BPRS Business Plan until the effective date of the calculation of the KPMM ratio and core capital ratio as regulated in regulations concerning minimum capital adequacy requirements and minimum core capital fulfillment for BPRS are prepared using calculations referring to regulations concerning minimum capital adequacy requirements as regulated in Bank Indonesia Regulation No. 8/22/PBI/2006 concerning Minimum Capital Adequacy Requirements for People's Credit Banks Based on Sharia Principles. Presentation format for the plan to fulfill the KPMM ratio for the 2018 Business Plan until the effective date of regulations concerning minimum capital adequacy requirements and minimum core capital fulfillment for BPRS refers to Appendix IX.1. Presentation format for the plan to fulfill the KPMM ratio and core capital ratio for the Business Plan since the effective date of regulations concerning minimum capital adequacy requirements and minimum core capital fulfillment for BPRS refers to Appendix IX.2.

b. Minimum Core Capital Fulfillment Plan
The minimum core capital fulfillment plan is intended for BPRS that have not yet fulfilled the minimum core capital fulfillment obligation as regulated in regulations concerning minimum capital adequacy requirements and minimum core capital fulfillment for BPRS. This section also describes the reasons or considerations used in preparing the plan and the BPRS strategy to realize the plan. The minimum core capital fulfillment plan is presented for:

1. actual position at the end of October of the year the BPRS Business Plan was prepared;

2. plan at the end of December of the year the BPRS Business Plan was prepared;

3. plan 1 (one) year forward presented semi-annually; and

4. end-of-year plans for the second, third, fourth, and fifth years, presented annually.
   The format for presenting the minimum core capital fulfillment plan refers to Appendix IX.3.
   c. Capital Addition Plan
   The capital addition plan is a projection of capital additions over the next 3 (three) years, regarding both structure and the amount of capital.
   The capital addition plan includes plans for capital additions from existing shareholders and plans for other capital additions. These plans are explained for:

5. actual positions at the end of October of the Business Plan preparation month for BPRS;

6. plans at the end of December in the year of BPRS Business Plan preparation;

7. plans for 1 (one) year ahead, presented semi-annually; and

8. end-of-year plans for the second and third years, presented annually.
   The format for presenting the capital addition plan refers to Appendix IX.4.

8. Organizational, Information Technology, and Human Resources (HR) Development Plan
   This section outlines information regarding the current organizational structure and number of HR, ongoing organizational, information technology, and HR development plans, as well as other organizational, information technology, and HR development plans for at least 1 (one) year ahead, which include among others:
   a. Organizational Development Plan
   The organizational development plan includes among others plans for the formation or change of work units and/or committees, adjusted to the size and complexity of the BPRS business. The format for presenting the organizational development plan refers to Appendix X. b. Fundamental Information Technology Development and Procurement Plan The fundamental information technology development and procurement plan includes among others significant changes to information technology configuration or core banking applications, procurement of new core banking applications, cooperation with information technology service providers, and other fundamental information technology development and procurement that can add and/or increase BPRS risk. The format for presenting fundamental information technology development and procurement plans refers to Appendix XI.
   c. Human Resources Development Plan
   The human resources development plan includes among others HR fulfillment at BPRS, plans for HR education and training needs, including education and training cost/budget plans as regulated in provisions regarding the obligation to provide funds for education and training for BPRS human resource development. The format for presenting the human resources development plan refers to Appendix XII. d. Outsourced Labor Utilization Plan Outsourcing is the submission of part of the work execution to a service provider company through a contracting agreement and/or through a labor supply service agreement. The outsourced labor utilization plan includes among others plans for utilizing labor outside permanent labor, including the number and fields of assignment. The format for presenting the outsourced labor utilization plan refers to Appendix XIII.
9. New Product Issuance and New Activity Implementation Plan
   The new product issuance and new activity implementation plan includes:
   a. plans for issuing new products; and b. plans for implementing new activities, for at least 1 (one) year ahead.
   New products and activities that must be included in the BPRS Business Plan are new products and activities that have not previously been issued or implemented by the respective BPRS, as regulated in Otoritas Jasa Keuangan regulations regarding products and activities of Sharia banks and Sharia business units. The format for presenting the New Product Issuance and New Activity Implementation Plan refers to Appendix XIV.
10. Branch Network Development and/or Change Plan
    The branch network development and/or change plan includes at least:
    a. plans for moving the head office address; b. plans for opening, moving the address, and/or closing branch offices and/or cash offices;
    c. plans for implementing cash service activities and plans for closing cash service activities such as mobile cash, payment points, and electronic banking devices; and
    d. plans for moving payment points and locations of Automated Teller Machines and/or Automated Deposit Machines.
    The definition of branch offices, cash offices, and cash service activities such as mobile cash, payment points, and electronic banking devices refers to Otoritas Jasa Keuangan regulations regarding BPRS. These plans are presented for a period of 1 (one) year ahead. The format for presenting the branch network development and/or change plan refers to Appendix XV.
11. Other Information
    Other information includes information estimated to affect BPRS business activities, but not mentioned in the scope of the Business Plan, including steps for resolving problematic financing, including through collateral takeover and/or write-offs, resolution of Taken-Over Collateral (AYDA) and write-offs, and BPRS reports as Financial Service Providers Without Branches in the Context of Inclusive Finance (Laku Pandai). The format for presenting other information refers to Appendix XVI.

III. BUSINESS PLAN CHANGES

1. The Otoritas Jasa Keuangan is authorized to request BPRS to adjust the Business Plan submitted by BPRS, if:
   a. The Business Plan is deemed not to meet the scope of the Business Plan as regulated in the POJK on BPR and BPRS Business Plans; and/or b. projections, targets, or plans submitted in the Business Plan are deemed unrealistic, for example:

1. High financing projections without being balanced by funding capabilities and adequate human resource numbers.
2. Investment plans involving the purchase of fixed assets in large amounts without considering BPRS profitability.

2. BPRS may only make changes to the Business Plan if:
   a. there are external and internal factors that significantly affect BPRS operations; External factors include economic conditions, social and political developments, and technological developments. Example:
   A decline in regional economic growth causes a decrease in financing demand in the trading sector, which is the priority sector for BPRS financing distribution, thereby affecting the repayment ability of debtors in that sector. Based on these conditions, BPRS can change the priority of financing distribution to other sectors, which strategy is then formulated in the Business Plan change. Internal factors include financial conditions, management, and ownership changes. Example:
   A change in BPRS ownership causes a change in BPRS business strategy, so BPRS needs to make a Business Plan change. b. based on Otoritas Jasa Keuangan's consideration, there are factors that significantly affect BPRS performance, including among others solvency issues, liquidity issues, and/or external issues that significantly impact BPRS performance.
   IV. REALIZATION REPORTS AND BUSINESS PLAN SUPERVISION
3. In accordance with Article 21 paragraph (1) of the POJK on BPR and BPRS Business Plans, the Business Plan Realization Report must be submitted by BPRS semi-annually, namely at the end of June and December positions. The report includes:
   a. Business Plan achievement, namely the comparison between plans and realization; b. explanations regarding the causes and obstacles of differences between plans and Business Plan realization; and
   c. follow-up actions taken and to be taken to improve Business Plan realization achievement.
   Explanations regarding Business Plan realization include at least:
   a. business strategies and policies; b. financial performance realization on the balance sheet, profit and loss, as well as ratios and financial positions;
   c. fund mobilization realization;
   d. fund disbursement realization; e. fulfillment of minimum capital provision ratios, minimum core capital fulfillment, and capital addition plans; f. organizational, information technology, and HR development realization; g. new product issuance and new activity implementation realization; h. branch network development and/or change realization; and
   i. other information realization.
   The format for presenting the Business Plan Realization Report refers to Appendix XVII.1.
   The format for presenting financial performance realization on the balance sheet, profit and loss, as well as ratios and financial positions as referred to in letter b refers to Appendices XVII.2, XVII.3, and XVII.4. The format for filling out other information realization as referred to in letter i refers to Appendix XVII.5.
4. In accordance with Article 5 of the POJK on BPR and BPRS Business Plans, the Board of Commissioners must supervise the implementation of the Business Plan. The results of this supervision are subsequently formulated in the Business Plan Supervision Report as required in Article 22 paragraph (1) of the POJK on BPR and BPRS Business Plans. The scope of the report prepared by the Board of Commissioners includes at least assessments regarding:
   a. Business Plan implementation, namely quantitative and qualitative assessments of Business Plan realization; b. factors affecting BPRS performance, including capital factors, asset quality, profitability, and liquidity, referring to provisions regarding the assessment of BPRS health levels;
   c. the application of BPRS corporate governance and risk management; and
   d. efforts to improve BPRS performance, in the event that the assessment results as referred to in letter b above show a performance decline.
   The Board of Commissioners' assessments in letters a through d can also be supplemented with assessments of external factors affecting BPRS operations.
   In relation to the duties of the Board of Commissioners, BPRS must have an internal mechanism for preparing the aforementioned Business Plan Supervision Report.
   The format for presenting the Business Plan Supervision Report refers to Appendix XVIII.
   V. COVER LETTER FORMAT
   The submission of Business Plans offline, cover letters for submitting Business Plan changes/adjustments offline, cover letters for submitting Business Plan Realization Reports offline, and cover letters for submitting Business Plan Supervision Reports refer to Appendix XIX.

VI. REPORT SUBMISSION

1. Timeframe
   Referring to Article 24 paragraph (1), Article 24 paragraph (2), Article 25 paragraph (1), and Article 25 paragraph (2) of the POJK on BPR and BPRS Business Plans, BPRS is considered late in submitting Business Plans, Business Plan adjustments, Business Plan Realization Reports, and/or Business Plan Supervision Reports if:
   a. BPRS submits Business Plans beyond the submission deadline up to 30 (thirty) days after the end of the Business Plan submission deadline; b. BPRS submits Business Plan adjustments beyond the submission deadline up to 20 (twenty) days after the end of the Business Plan adjustment submission deadline;
   c. BPRS submits Business Plan Realization Reports beyond the submission deadline up to 30 (thirty) days after the end of the Business Plan Realization Report submission deadline; and/or
   d. BPRS submits Business Plan Supervision Reports beyond the submission deadline up to a maximum of 30 (thirty) working days after the end of the Business Plan Supervision Report submission deadline. Referring to Article 24 paragraph (3) and Article 25 paragraph (3) of the POJK on BPR and BPRS Business Plans, BPRS is considered not to have submitted Business Plans, Business Plan adjustments, Business Plan Realization Reports, and/or Business Plan Supervision Reports if, by the end of the late submission period, BPRS has not submitted the aforementioned reports.
2. Offline Report Submission
   a. In the event that BPRS submits Business Plans, Business Plan adjustments, Business Plan changes, and Business Plan Realization Reports offline, such submission can be done using electronic data recording media (among others compact disks, flash drives, or other electronic data recording media) submitted to the Otoritas Jasa Keuangan according to the region of the BPRS head office. b. In the event of damage to the electronic data recording media received by the Otoritas Jasa Keuangan offline, BPRS resubmits the electronic data recording media.
   c. BPRS submits Business Plan Supervision Reports offline to the Otoritas Jasa Keuangan in hardcopy (printed results) form, and softcopy in the form of electronic data recording media.
   VII. OTHERS
   Appendices in this Otoritas Jasa Keuangan Circular Letter are formats for preparing Business Plans, Business Plan Realization Reports, and Business Plan Supervision Reports starting from 2018. Appendices in this Otoritas Jasa Keuangan Circular Letter are an inseparable part of this Otoritas Jasa Keuangan Circular Letter.
   VIII. CLOSING
   Provisions in this Otoritas Jasa Keuangan Circular Letter take effect on the date of determination.
   Determined in Jakarta on December 23, 2016
   EXECUTIVE HEAD OF BANKING SUPERVISOR
   OTORITAS JASA KEUANGAN, signature
   NELSON TAMPUBOLON
   Copy matches the original
   Legal Director 1
   Legal Department signature
   Yuliana