Regulatory Alerts2013-10-24
Bank Indonesia Regulation No. 14/15/PBI/2012 Concerning Assessment of Commercial Bank Asset Quality
Bank Indonesia issued Regulation No. 14/15/PBI/2012 to harmonize and restipulate the assessment of commercial bank asset quality in alignment with international accounting standards and prudential principles. The regulation mandates that banks classify earning and non-earning assets into specific quality categories, such as Current, Special Mention, Sub Standard, Doubtful, or Loss, based on rigorous assessments of business prospects, debtor performance, and repayment capability. It further establishes uniform classification rules for multiple accounts and joint financing, requiring banks to adjust asset quality ratings and submit detailed reports to Bank Indonesia when discrepancies arise or when debtors fail to provide audited financial statements.