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COPY OF

FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA

NUMBER 24 OF 2024

ASSET QUALITY

OF SHARIA PEOPLE'S ECONOMY BANKS

BY THE GRACE OF THE MOST HIGH GOD,

THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that to support a healthy and highly competitive Sharia People's Economy Bank industry, Sharia People's Economy Banks, in conducting business activities, particularly asset management, must always adhere to prudential principles, risk management, and Sharia principles; b. that in line with recent developments in financial accounting standards, Sharia People's Economy Banks are required to present accurate, comprehensive financial reports that reflect the bank's performance in accordance with financial accounting standards;
c. that to implement the provisions of Article 40 of Law Number 21 of 2008 on Sharia Banking, as amended several times, lastly with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector;
d. that the Financial Services Authority Regulation Number 29/POJK.03/2019 on Productive Asset Quality and the Formation of Provisions for the Write-off of Productive Assets of Sharia Microfinance Institutions is no longer suitable for current needs and therefore needs to be replaced; e. that based on the considerations referred to in letters a, b, c, and d, it is necessary to establish a Financial Services Authority Regulation on the Asset Quality of Sharia People's Economy Banks;

Recalling:

Law Number 21 of 2008 on Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Additional State Gazette of the Republic of Indonesia Number 4867), as amended several times, lastly with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Additional State Gazette of the Republic of Indonesia Number 6845);
Law Number 21 of 2011 on the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Additional State Gazette of the Republic of Indonesia Number 5253), as amended with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Additional State Gazette of the Republic of Indonesia Number 6845);

DECIDING:

To establish:
FINANCIAL SERVICES AUTHORITY REGULATION ON ASSET QUALITY OF SHARIA PEOPLE'S ECONOMY BANKS.

CHAPTER I
GENERAL PROVISIONS

Article 1
In this Financial Services Authority Regulation, the following terms are defined:

Sharia People's Economy Bank, hereinafter abbreviated as BPR Syariah, is a type of Sharia bank that does not provide payment services directly in its business activities.
Assets are productive assets and non-productive assets.
Productive Assets are the provision of funds by BPR Syariah in Rupiah to generate income, in the form of financing, Sharia securities, placements in other banks, and equity participation in accordance with Sharia principles.
Placement in Other Banks is the placement of BPR Syariah funds in Sharia commercial banks, Sharia business units, or other BPR Syariah based on Sharia principles in the form of current accounts, savings, time deposits, certificates of deposits, provided financing, and other similar fund placements.
Sharia Securities are securities based on Sharia principles issued by Bank Indonesia, the Government, or Regional Governments.
Financing is the provision of funds or claims that can be equated with them based on agreement or consensus between BPR Syariah and other parties, which obligates the financed party and/or the party receiving fund facilities to return the funds after a certain period with compensation in the form of ujrah, without compensation, or profit-sharing, including profit-sharing transactions, leasing transactions, sales transactions, lending transactions, and service leasing transactions in accordance with Sharia principles.
Financing based on mudarabah contract, hereinafter referred to as Mudarabah Financing, is financing in the form of a business partnership between BPR Syariah, which provides all the capital, and the customer acting as the fund manager, sharing business profits according to the agreement stipulated in the contract, while losses are borne entirely by BPR Syariah unless the customer commits intentional errors, negligence, or breaches of the agreement.
Financing based on musyarakah contract, hereinafter referred to as Musyarakah Financing, is financing in the form of a partnership between BPR Syariah and the customer for a specific business, where each party provides a portion of funds with the provision that profits will be shared according to agreement, while losses are borne according to each party's capital portion.
Financing based on murabahah contract, hereinafter referred to as Murabahah Financing, is the financing of goods by stating the purchase price to the buyer, and the buyer pays it at a higher price as agreed profit.
Financing based on istishna contract, hereinafter referred to as Istishna Financing, is the financing of goods in the form of ordering the manufacture of specific goods with agreed criteria and requirements between the customer and the seller or manufacturer, with payment according to agreement.
Financing based on ijarah contract, hereinafter referred to as Ijarah Financing, is financing to transfer the right to use or benefit from goods or services based on leasing transactions, without transferring ownership of the goods themselves.
Financing based on ijarah muntahiyah bi altamlik contract, hereinafter referred to as IMBT Financing, is financing to transfer the right to use or benefit from goods or services based on leasing transactions with an option to transfer ownership of the goods.
Financing based on qardh contract, hereinafter referred to as Qardh Financing, is financing in the form of a cash loan to the customer with the provision that the customer must return the received funds at the agreed time.
Projected Profit Sharing, hereinafter abbreviated as PBH, is the estimated income to be received by BPR Syariah from customers for Mudarabah Financing and Musyarakah Financing after calculating the profit-sharing ratio, with amounts and maturity dates agreed upon between BPR Syariah and the customer.
Realized Profit Sharing, hereinafter abbreviated as RBH, is the income received by BPR Syariah from customers for Mudarabah Financing and Musyarakah Financing after calculating the profit-sharing ratio.
Equity Participation is the investment of BPR Syariah funds in the form of shares in institutions supporting BPR Syariah, subject to requirements in accordance with applicable laws and regulations.
Non-Productive Assets are collateral taken over, abandoned properties, and claims of BPR Syariah arising from counterparties failing to fulfill obligations to BPR Syariah.
Collateral Taken Over, hereinafter abbreviated as AYDA, are assets acquired by BPR Syariah, either partially or fully, through purchase via auction or outside auction based on voluntary surrender by the collateral owner or based on power of attorney to sell outside auction from the collateral owner, in the event that the customer fails to fulfill obligations to BPR Syariah, with the provision that purchased collateral must be liquidated as soon as possible.
Abandoned Property is fixed assets in the form of property owned by BPR Syariah but not used for BPR Syariah business activities related to BPR Syariah operations.
Asset Quality Assessment Provision, hereinafter abbreviated as PPKA, is a provision calculated as a certain percentage based on Asset quality for the purpose of calculating the minimum capital adequacy requirement for BPR Syariah.
Provision for Impairment of Financial Assets, hereinafter abbreviated as CKPN, is a provision formed for the impairment of financial instruments in accordance with financial accounting standards.
Minimum Capital Adequacy Requirement, hereinafter abbreviated as KPMM, is the ratio of capital to risk-weighted assets that must be provided by BPR Syariah in accordance with Financial Services Authority Regulations regarding minimum capital adequacy requirements and minimum core capital fulfillment for Sharia microfinance banks.
Board of Directors is the board of directors for BPR Syariah in the form of a limited liability company or the management for BPR Syariah in the form of a cooperative legal entity.
Board of Commissioners is the board of commissioners for BPR Syariah in the form of a limited liability company or the supervisors for BPR Syariah in the form of a cooperative legal entity.
Sharia Supervisory Board, hereinafter abbreviated as DPS, is a party having the task and function of supervising the implementation of BPR Syariah activities to ensure compliance with Sharia principles.
Facility Recipient Customer, hereinafter referred to as Customer, is a customer who receives fund facilities or equivalents, based on Sharia principles.
Financing Restructuring is the improvement efforts undertaken by BPR Syariah in financing activities for Customers experiencing difficulties in fulfilling obligations.
Sharia Principles are Islamic legal principles based on fatwas and/or Sharia compliance statements issued by institutions having authority in issuing fatwas in the field of Sharia.

CHAPTER II
ASSET QUALITY

First Section
General

Article 2
(1) BPR Syariah is required to manage Assets based on prudential principles and Sharia Principles.
(2) To implement the prudential principles referred to in paragraph (1), the Board of Directors of BPR Syariah is required to assess, monitor, and take necessary steps:
a. to ensure that the quality of Productive Assets remains good; and b. for the resolution of Non-Productive Assets.

Article 3
(1) BPR Syariah is required to assess and determine the quality of Productive Assets.
(2) In the event of a difference in the determination of Productive Asset quality between BPR Syariah and the Financial Services Authority, the Productive Asset quality determined by the Financial Services Authority shall prevail. (3) BPR Syariah is required to adjust the quality of Productive Assets in accordance with that determined by the Financial Services Authority as referred to in paragraph (2) in reports submitted to the Financial Services Authority in accordance with Financial Services Authority Regulations regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for people's economy banks and BPR Syariah.

Article 4
(1) BPR Syariah is required to determine the same quality for all Productive Assets used to finance:
a. 1 (one) Customer; or b. 1 (one) project or the same business.
(2) The determination of Productive Asset quality as referred to in paragraph (1) must follow the lowest Productive Asset quality.
(3) The provisions as referred to in paragraph (2) may be exempted for Productive Assets determined based on different assessment factors.

Article 5
(1) BPR Syariah is required to determine the same quality for Productive Assets provided by more than 1 (one) BPR Syariah used to finance:
a. 1 (one) Customer; or b. 1 (one) project or the same business.
(2) The provisions as referred to in paragraph (1) apply to:
a. Productive Assets provided by each BPR Syariah with an amount exceeding Rp1,000,000,000.00 (one billion Rupiah) to 1 (one) Customer or 1 (one) project or the same business; b. Productive Assets provided by BPR Syariah with an amount exceeding Rp500,000,000.00 (five hundred million Rupiah) up to Rp1,000,000,000.00 (one billion Rupiah) to 1 (one) Customer who is among the 25 (twenty-five) largest Customers of that BPR Syariah, and Productive Assets provided by other BPR Syariah to that Customer exceeding Rp1,000,000,000.00 (one billion Rupiah); and/or
c. Productive Assets provided based on joint Financing agreements to 1 (one) Customer or 1 (one) project or the same business.
(3) In the event of differences in Productive Asset quality as referred to in paragraph (1) and paragraph (2), the quality determined by each BPR Syariah for Productive Assets must follow the lowest quality. (4) The provisions as referred to in paragraph (3) may be exempted for Productive Assets determined based on different assessment factors. (5) BPR Syariah is required to evaluate and adjust if there are changes to the quality determination as referred to in paragraph (1) no later than the end positions of March, June, September, and December.

Article 6
(1) BPR Syariah may determine different qualities for Productive Assets provided to Customers as referred to in Article 4 paragraph (1) or Article 5 paragraph (1) if the Customer meets at least the following requirements:
a. The Customer has several:

projects;
businesses; or
sources of funds,
which are different, serving as the source of principal and/or margin/profit-sharing/ujrah payments; and b. there is a clear separation between the cash flows from each project, business, or source of funds, which serve as the source of principal and/or margin/profit-sharing/ujrah payments. (2) BPR Syariah determining different qualities for Productive Assets provided to 1 (one) Customer as referred to in paragraph (1) is required to document a list containing the Customer's name along with details including the financed project or business, different sources of funds, limits and outstanding balances of Productive Assets, the quality determined by BPR Syariah, the quality determined by other BPR Syariah, statements from the Customer, copies of Financing agreements from other BPR Syariah, and reasons for determining different qualities. (3) BPR Syariah is required to submit a report on quality differences in the form of a list of Customers and details as referred to in paragraph (2) for the end positions of March, June, September, and December. (4) Reports on Productive Asset quality differences as referred to in paragraph (3) are submitted to the Financial Services Authority in accordance with Financial Services Authority Regulations regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for people's economy banks and BPR Syariah, with the report format contained in Appendix I, which is an integral part of this Financial Services Authority Regulation. (5) In the event that Financial Services Authority supervision results reveal that the determination made by BPR Syariah does not meet the requirements as referred to in paragraph (1), BPR Syariah must make determinations in accordance with the provisions as referred to in Article 4 paragraph (1) letter a or Article 5 paragraph (1) letter a.

Second Section
Financing

Article 7
(1) The quality of Productive Assets in the form of Financing provided by each BPR Syariah to 1 (one) Customer or 1 (one) project or business is assessed based on assessment factors:
a. business prospects; b. Customer performance; and
c. repayment capacity.
(2) The quality of Productive Assets in the form of Financing provided by each BPR Syariah to 1 (one) Customer or 1 (one) project or business with an amount of up to Rp5,000,000,000.00 (five billion Rupiah) may be assessed based on the timeliness of principal and/or margin/profit-sharing/ujrah payments. (3) The determination of Productive Asset quality in the form of Financing as referred to in paragraph (1) and paragraph (2) is contained in Appendix II, Part A, Part B, and Part C, which are integral parts of this Financial Services Authority Regulation.

Article 8
(1) Assessment of business prospects as referred to in Article 7 paragraph (1) letter a includes assessment of components:
a. business growth potential; b. market conditions and Customer's position in competition;
c. management quality and labor issues;
d. support from owners, groups, or affiliates; and e. efforts made by the Customer to maintain the environment.
(2) Assessment of Customer performance as referred to in Article 7 paragraph (1) letter b includes assessment of components:
a. profitability; b. capital structure; and
c. cash flow.
(3) Assessment of repayment capacity as referred to in Article 7 paragraph (1) letter c includes assessment of components:
a. timeliness of principal and/or margin/profit-sharing/ujrah payments; b. availability and accuracy of Customer financial information;
c. completeness of Financing documentation;
d. compliance with Financing agreements; e. appropriateness of fund usage; and f. fairness of the source of obligation payments.

Article 9
The assessment of Productive Asset quality in the form of Financing as referred to in Article 7 paragraph (1) and Article 8 is conducted by considering:
a. the significance and materiality of each assessment factor and component; and b. the relevance of assessment factors and components to the respective Customer.

Article 10
In the event of conditions causing the Customer to lack the ability to repay principal and/or margin/profit-sharing/ujrah according to the Financing agreement with BPR Syariah, the Financial Services Authority has the authority to downgrade the Productive Asset quality determined by BPR Syariah as referred to in Article 7 paragraph (2).

Article 11
Based on the assessment as referred to in Article 7, the quality of Productive Assets in the form of Financing is determined as:
a. current; b. special mention;
c. substandard;
d. doubtful; or e. loss.

Article 12
In the event of deviations in the provision of Financing, BPR Syariah is required to downgrade the quality of Productive Assets in the form of Financing to loss.

Article 13
(1) BPR Syariah providing Financing with a grace period for payment shall calculate principal and/or margin/profit-sharing/ujrah arrears after the payment grace period has ended. (2) The final deadline for Financing with a payment grace period as referred to in paragraph (1) is stipulated in the Financing agreement.

Article 14
(1) The timeliness of profit-sharing payment as referred to in Article 7 paragraph (2) for Productive Asset quality in the form of Mudarabah Financing and Musyarakah Financing is assessed based on the calculation of the achievement ratio of RBH to PBH. (2) The calculation of the achievement ratio of RBH to PBH as referred to in paragraph (1) is conducted based on accumulation during the period of the ongoing Mudarabah Financing or Musyarakah Financing. (3) PBH is calculated in specific periods based on business feasibility analysis and Customer incoming cash flow during the term of Mudarabah Financing and Musyarakah Financing. (4) In the event of changes in macroeconomic, market, and political conditions affecting the Customer's business, BPR Syariah may change PBH based on agreement with the Customer. (5) BPR Syariah is required to include PBH and/or changes to PBH in the Mudarabah Financing or Musyarakah Financing agreement between BPR Syariah and the Customer.

Article 15
(1) Principal installment payments in Mudarabah Financing and Musyarakah Financing may be made periodically or at the end of the Financing.
(2) BPR Syariah is required to take steps to reduce the risk of non-payment of the Financing principal at maturity if it is agreed that there are no periodic principal installment payments in Mudarabah Financing and Musyarakah Financing. (3) BPR Syariah is required to include principal installment or repayment of Mudarabah Financing and Musyarakah Financing in the Financing agreement between BPR Syariah and the Customer.

Third Section
Sharia Securities

Article 16
(1) BPR Syariah may only hold Sharia Securities issued by Bank Indonesia, the Government, and/or Regional Governments.
(2) The quality of Productive Assets in the form of Sharia Securities issued by Bank Indonesia or the Government is determined as current.
(3) The quality of Productive Assets in the form of Sharia Securities issued by Regional Governments is determined as:
a. current; b. substandard; or
c. loss.
(4) The determination of Productive Asset quality in the form of Sharia Securities as referred to in paragraph (3) is contained in Appendix II, Part D, which is an integral part of this Financial Services Authority Regulation. (5) The quality of Sharia Securities in the form of sukuk resulting from the content of the contract and/or changes to the contract that result in non-compliance with Sharia Principles is determined based on the Financing quality provisions as referred to in Article 7 paragraph (1).

Fourth Section
Placement in Other Banks

Article 17
(1) The quality of Productive Assets in the form of Placement in Other Banks is determined as:
a. current; b. substandard; or
c. loss.
(2) The determination of Productive Asset quality in the form of Placement in Other Banks as referred to in paragraph (1) is contained in Appendix II, Part E, which is an integral part of this Financial Services Authority Regulation.

Fifth Section
Equity Participation

Article 18
(1) Equity Participation is measured and/or recorded using:
a. acquisition cost; or b. the equity method, with reference to financial accounting standards.
(2) The quality of Productive Assets in the form of Equity Participation measured and/or recorded using acquisition cost as referred to in paragraph (1) letter a is determined as:

a. current; b. doubtful;
c. questionable; or
d. non-performing.
(3) The quality of Productive Assets in the form of Capital Participation measured and/or recorded using the equity method as referred to in paragraph (1) letter b is determined to be current. (4) The determination of the quality of Productive Assets in the form of Capital Participation as referred to in paragraph (2) is contained in Appendix II in Part F, which is an inseparable part of this Financial Services Authority Regulation.

Part Six
Productive Assets Secured by Cash Collateral
Article 19
(1) A portion of Productive Assets secured by cash collateral is determined to have current quality.
(2) Cash collateral consists of:
a. savings, deposits, and/or precious metals; and/or b. Sharia Securities issued by Bank Indonesia or the Government.
(3) Cash collateral as referred to in paragraph (2) must meet the following requirements:
a. the collateral is blocked and accompanied by a disbursement power of attorney from the collateral owner for the benefit of the receiving Sharia BPR, including partial disbursement to pay principal installment arrears and/or margin/profit share/ujrah; b. the blocking period as referred to in letter a is at least equal to the term of the Productive Asset;
c. it has strong legal binding as collateral, free from all other obligations, free from disputes, not pledged to other parties, including having a clear guarantee purpose; and
d. proof of collateral ownership consists of:

savings and deposits; and/or
proof of ownership and physical precious metals,
stored at the Sharia BPR providing the funds.

Part Seven
Sanctions
Article 20
(1) Sharia BPRs that violate the provisions as referred to in Article 2, Article 3 paragraph (1), paragraph (3), Article 4 paragraph (1), paragraph (2), Article 5 paragraph (1), paragraph (3), paragraph (5), Article 6 paragraph (2), paragraph (3), Article 12, Article 14 paragraph (5), Article 15 paragraph (2), and/or paragraph (3) shall be subject to administrative sanctions in the form of a written reprimand. https://jdih.ojk.go.id/

(2) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 2, Article 3 paragraph (1), paragraph (3), Article 4 paragraph (1), paragraph (2), Article 5 paragraph (1), paragraph (3), paragraph (5), Article 6 paragraph (2), paragraph (3), Article 12, Article 14 paragraph (5), Article 15 paragraph (2), and/or paragraph (3), the Sharia BPR shall be subject to administrative sanctions in the form of:
a. reduction of the Sharia BPR's health level; and/or b. temporary suspension of some business activities.
(3) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 2, Article 3 paragraph (1), paragraph (3), Article 4 paragraph (1), paragraph (2), Article 5 paragraph (1), paragraph (3), paragraph (5), Article 6 paragraph (2), paragraph (3), Article 12, Article 14 paragraph (5), Article 15 paragraph (2), and/or paragraph (3), the principal party of the Sharia BPR may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER III
PLACEMENT OF FUNDS IN CONVENTIONAL BANKS
Article 21
(1) Sharia BPRs are prohibited from placing funds in conventional banks, except for fund placement in conventional commercial banks in the form of current accounts and/or savings for the purpose of fund transfers for the Sharia BPR and Sharia BPR Customers. (2) In the event that a Sharia BPR places funds in conventional commercial banks as referred to in paragraph (1):
a. the fund placement in conventional commercial banks is not included in the category of Productive Assets; and b. the Sharia BPR is required to form a Provision for Potential Losses (PPKA) with the same mechanism as the PPKA calculation as regulated in this Financial Services Authority Regulation.
Article 22
(1) The quality of assets in the form of fund placement in conventional commercial banks as referred to in Article 21 paragraph (2) is determined as:
a. current; b. doubtful; or
c. non-performing.
(2) The determination of asset quality in the form of fund placement in conventional commercial banks as referred to in paragraph (1) is contained in Appendix II in Part G, which is an inseparable part of this Financial Services Authority Regulation. https://jdih.ojk.go.id/

Article 23
(1) Sharia BPRs that violate the provisions as referred to in Article 21 paragraph (1) and/or paragraph (2) letter b shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 21 paragraph (1) and/or paragraph (2) letter b, the Sharia BPR shall be subject to administrative sanctions in the form of:
a. reduction of the Sharia BPR's health level; and/or b. temporary suspension of some business activities.
(3) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 21 paragraph (1) and/or paragraph (2) letter b, the principal party of the Sharia BPR may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER IV
PPKA AND CKPN
Part One
PPKA
Article 24
(1) Sharia BPRs are required to calculate PPKA consisting of general PPKA and specific PPKA for each Productive Asset.
(2) General PPKA as referred to in paragraph (1) is determined to be at least 0.5% (zero point five percent) of Productive Assets with current quality.
(3) Specific PPKA as referred to in paragraph (1) is determined to be at least:
a. 3% (three percent) of Productive Assets with special attention quality after being reduced by the value of collateral; b. 10% (ten percent) of Productive Assets with doubtful quality after being reduced by the value of collateral;
c. 50% (fifty percent) of Productive Assets with questionable quality after being reduced by the value of collateral; and/or
d. 100% (one hundred percent) of Productive Assets with non-performing quality after being reduced by the value of collateral.
(4) The calculation of general PPKA as referred to in paragraph (2) is excluded for Productive Assets in the form of:
a. Sharia Securities issued by Bank Indonesia or the Government; and https://jdih.ojk.go.id/

b. a portion of Productive Assets secured by cash collateral as referred to in Article 19.
Article 25
The calculation of PPKA for Productive Assets in the form of Financing is determined as follows:
a. Murabahah Financing, Istishna Financing, and Multi-service Financing are calculated based on the principal price balance; b. Mudarabah Financing, Musyarakah Financing, and Qardh Financing are calculated based on the amount, namely the Financing balance amount; and
c. Ijarah Financing and IMBT Financing are calculated based on principal arrears.
Article 26
Sharia BPRs are required to form depreciation or amortization of Productive Assets in the form of:
a. Ijarah Financing, in accordance with the Sharia BPR's depreciation or amortization policy for similar assets; and b. IMBT Financing, in accordance with the lease term.
Article 27
(1) The value of collateral calculated as a reduction in the calculation of specific PPKA as referred to in Article 24 paragraph (3) is determined to be at most:
a. 85% (eighty-five percent) of the market value for collateral in the form of jewelry gold; b. 80% (eighty percent) of the value of mortgage rights or fiduciary rights for collateral in the form of land and/or buildings that have certificates encumbered with mortgage rights or fiduciary rights;
c. 70% (seventy percent) of the value of collateral in the form of warehouse receipts whose valuation is conducted up to the last 12 (twelve) months and in accordance with regulations regarding warehouse receipts;
d. 60% (sixty percent) of the Taxable Object Value or market value based on valuation by an independent appraiser for collateral in the form of land and/or buildings that have certificates not encumbered with mortgage rights or fiduciary rights; e. 50% (fifty percent) of the Taxable Object Value based on the Tax Payment Notification Letter or the latest Taxable Object Value certificate from the competent authority, or from the market value based on valuation by an independent appraiser or competent authority, for collateral in the form of land and/or buildings with ownership in the form of customary land acknowledgment letters; f. 50% (fifty percent) of the market price, rental price, or transfer price, for collateral in the form of business premises accompanied by proof of ownership, usage permission letters, or usage rights over land issued by the competent authority and accompanied by a power of attorney to sell or transfer rights made or certified by a notary or made by other competent officials; g. 50% (fifty percent) of the value of mortgage or fiduciary rights in the form of motor vehicles, ships, motorboats, heavy equipment, and/or machinery that are part of the land, accompanied by proof of ownership and have undergone mortgage or fiduciary binding in accordance with regulations; h. 50% (fifty percent) of the value of collateral in the form of warehouse receipts whose valuation is conducted more than 12 (twelve) months up to 18 (eighteen) months in the last period and in accordance with regulations regarding warehouse receipts;
i. 50% (fifty percent) for the portion of Financing guaranteed by State-Owned Enterprises/Regional-Owned Enterprises that conduct business as guarantors of Financing, including Sharia guarantee institutions that are subsidiaries of guarantee institutions with the status of State-Owned Enterprises/Regional-Owned Enterprises, meeting criteria in accordance with the Financial Services Authority Regulation regarding minimum capital provision requirements and minimum core capital fulfillment for Sharia People's Economy Banks;
j. 30% (thirty percent) of the value of collateral in the form of warehouse receipts whose valuation is conducted more than 18 (eighteen) months but not exceeding 24 (twenty-four) months in the last period and in accordance with regulations regarding warehouse receipts; or k. 20% (twenty percent) of the value of collateral other than collateral as referred to in letters a to j which was valued 1 (one) year in the last period by an independent appraiser using the valuation method as regulated by the applicable valuation standards. (2) Collateral other than as referred to in paragraph (1) is not calculated as a reduction in the calculation of PPKA. (3) The value of collateral calculated as a reduction in the calculation of PPKA on Financing with non-performing quality for collateral as referred to in paragraph (1) letters b, d, e, and f:
a. is determined to be at most 50% (fifty percent) of the calculated collateral value after a period of 2 (two) years up to 4 (four) years since the determination of the Financing quality becoming non-performing; and https://jdih.ojk.go.id/

b. cannot be calculated as a reduction factor in the calculation of PPKA after a period of 4 (four) years since the determination of the Financing quality becoming non-performing. (4) The provisions as referred to in paragraph (3) may be excluded in the event that the collateral meets the following requirements:
a. the collateral in the form of land and/or buildings has a certificate encumbered with mortgage rights or fiduciary rights; b. the collateral is valued by an independent appraiser conducted within the last 1 (one) year; and
c. the mortgage right value at least covers the entire amount of the Customer's obligations to the Sharia BPR.
(5) The value of collateral calculated as a reduction in the calculation of PPKA on Financing with non-performing quality for collateral as referred to in paragraph (1) letter g:
a. is determined to be at most 50% (fifty percent) of the calculated collateral value after a period of 1 (one) year up to 2 (two) years since the determination of the Financing quality becoming non-performing; and b. cannot be calculated as a reduction factor in the calculation of PPKA after a period of 2 (two) years since the determination of the Financing quality becoming non-performing. (6) The Financial Services Authority may determine different time periods from the time periods as referred to in paragraph (3) based on analysis of the local and surrounding economic conditions.
Article 28
(1) Sharia BPRs are required to conduct periodic valuations of collateral to determine the economic value of the collateral.
(2) Collateral is not calculated as a reduction in the calculation of PPKA if:
a. no valuation is conducted by the Sharia BPR as referred to in paragraph (1); b. its existence cannot be known;
c. it cannot be executed; and/or
d. the collateral belongs to another party without the consent of the collateral owner.
(3) Sharia BPRs are required to adjust the collateral value as a reduction in the calculation of PPKA if there is a significant decrease in the collateral value.
Article 29
(1) In the event that a Sharia BPR does not meet the provisions as referred to in Article 27 and Article 28, the Financial Services Authority is authorized to recalculate the collateral value that has been calculated as a reduction in the calculation of PPKA. https://jdih.ojk.go.id/

(2) Sharia BPRs are required to adjust the PPKA calculation in accordance with the calculation determined by the Financial Services Authority as referred to in paragraph (1) in reports submitted to the Financial Services Authority by referring to the Financial Services Authority's regulations regarding reporting through the Financial Services Authority's reporting system and transparency of financial conditions for Sharia BPRs.
Article 30
Part Placements in Other Banks and placements in conventional commercial banks that meet the guarantee criteria of the Deposit Insurance Agency can be used as reduction factors in the calculation of general PPKA and specific PPKA.
Article 31
Sharia BPRs are required to form PPKA with the same mechanism as the calculation of PPKA as referred to in Article 24 to Article 30.
Article 32
Sharia BPRs are required to form reserves of 100% (one hundred percent) over the claims of the Sharia BPR arising from the counterparty's failure to fulfill obligations to the Sharia BPR.

Part Two
CKPN
Article 33
Sharia BPRs are required to form CKPN in accordance with financial accounting standards.
Article 34
(1) In calculating the KPMM ratio, Sharia BPRs are required to consider the CKPN formed and PPKA over Productive Assets.
(2) In the event that the result of the CKPN calculation formed is smaller than the PPKA over Productive Assets, the Sharia BPR is required to consider the difference between the calculated CKPN formed and the PPKA over Productive Assets as a reduction in capital in the calculation of the KPMM ratio. (3) In the event that the result of the CKPN calculation formed is equal to or greater than the PPKA over Productive Assets, the Sharia BPR does not need to consider the PPKA over Productive Assets in the calculation of the KPMM ratio.

Part Three
Sanctions
Article 35
(1) Sharia BPRs that violate the provisions as referred to in Article 24 paragraph (1), Article 26, Article 28 paragraph (1), paragraph (3), Article 29 paragraph (2), Article 31, Article 32, https://jdih.ojk.go.id/

Article 33, Article 34 paragraph (1), and/or paragraph (2) shall be subject to administrative sanctions in the form of a written reprimand.
(2) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 24 paragraph (1), Article 26, Article 28 paragraph (1), paragraph (3), Article 29 paragraph (2), Article 31, Article 32, Article 33, Article 34 paragraph (1), and/or paragraph (2), the Sharia BPR shall be subject to administrative sanctions in the form of:
a. reduction of the Sharia BPR's health level; and/or b. temporary suspension of some business activities.
(3) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 24 paragraph (1), Article 26, Article 28 paragraph (1), paragraph (3), Article 29 paragraph (2), Article 31, Article 32, Article 33, Article 34 paragraph (1), and/or paragraph (2), the principal party of the Sharia BPR may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER V
FINANCING RESTRUCTURING
Part One
General
Article 36
Financing Restructuring must fulfill the principles of prudence and Sharia Principles.
Article 37
(1) Sharia BPRs may conduct Financing Restructuring on Customers who, in the judgment of the Sharia BPR, meet the following criteria:
a. experience difficulties in paying principal and/or margin/profit share/ujrah; and b. have good business prospects and are assessed to be able to fulfill obligations after Financing Restructuring is conducted. (2) Financing Restructuring as referred to in paragraph (1) is conducted through:
a. rescheduling; b. reconditioning; and/or
c. restructuring.
(3) Sharia BPRs are required to document Financing Restructuring conducted in the Financing agreement.
(4) The Financing agreement as referred to in paragraph (3) must refer to the previous Financing agreement.
(5) The procedures for Financing Restructuring as referred to in paragraph (1) are contained in Appendix III https://jdih.ojk.go.id/

which is an inseparable part of this Financial Services Authority Regulation.
Article 38
(1) Sharia BPRs are prohibited from conducting Financing Restructuring with the purpose of avoiding:
a. decline in Financing quality; b. increase in PPKA; and/or
c. cessation of accrual recognition of margin/profit share/ujrah income,
without considering the Customer criteria as referred to in Article 37.
(2) In conducting Financing Restructuring, Sharia BPRs must observe the following principles:
a. objectivity; b. independence;
c. avoidance of conflicts of interest; and
d. fairness.
Article 39
(1) The quality of Financing that undergoes Financing Restructuring as referred to in Article 37 is determined as:
a. at most doubtful for Financing that before Financing Restructuring was classified as questionable or non-performing; or b. unchanged, for Financing that before Financing Restructuring was classified as current, special attention, or doubtful. (2) The determination of Financing quality as referred to in paragraph (1) may become:
a. current, in the event that there are no principal installment and/or margin/profit share/ujrah arrears for 3 (three) consecutive payment periods; or b. the same as the Financing quality before Financing Restructuring, in the event that the Customer cannot meet the conditions as referred to in letter a. (3) The determination of Financing quality as referred to in paragraph (2) is subsequently determined based on assessment factors as referred to in Article 7.
Article 40
Sharia BPRs are required to apply accounting treatment for Financing Restructuring in accordance with financial accounting standards and accounting guidelines for Sharia BPRs.
Article 41
(1) The quality of Financing that undergoes Financing Restructuring with the granting of a payment grace period as referred to in Article 13 paragraph (1) is determined as:
a. during the payment grace period, the Financing quality follows the quality determination before Financing Restructuring was conducted; and b. after the payment grace period ends, the Financing quality follows the quality determination as referred to in Article 39. (2) In the event that Mudarabah Financing and Musyarakah Financing undergo Financing Restructuring, the calculation of the achievement of the RBH to PBH ratio as referred to in Article 14 paragraph (1) is conducted based on the accumulation during the Financing period since the Financing Restructuring agreement.
Article 42
The Financial Services Authority may make corrections to the determination of Financing quality that undergoes Financing Restructuring, the formation of PPKA, and the accrual recognition of margin/profit share/ujrah income if Financing Restructuring is not conducted in accordance with this Financial Services Authority Regulation, which includes:
a. based on the Financial Services Authority's assessment, Financing Restructuring is conducted with the purpose as referred to in Article 38 paragraph (1); b. the Customer does not implement the Financing agreement as referred to in Article 37 paragraph (3);
c. Financing Restructuring is conducted repeatedly with the purpose of improving Financing quality without considering the Customer's business prospects; and/or
d. Financing Restructuring is not supported by complete documents and adequate analysis regarding the Customer's repayment ability and business prospects.

Part Two
Sanctions
Article 43
(1) Sharia BPRs that violate the provisions as referred to in Article 36, Article 37 paragraph (3), paragraph (4), Article 38, and/or Article 40 shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 36, Article 37 paragraph (3), paragraph (4), Article 38, and/or Article 40, the Sharia BPR shall be subject to administrative sanctions in the form of:
a. reduction of the Sharia BPR's health level; and/or b. temporary suspension of some business activities. https://jdih.ojk.go.id/

(3) In the event that a Sharia BPR has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 36, Article 37 paragraph (3), paragraph (4), Article 38, and/or Article 40, the principal party of the Sharia BPR may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER VI
VACANT PROPERTY
Article 44
(1) Sharia BPRs are required to identify and determine Vacant Property owned.
(2) Vacant Property as referred to in paragraph (1) is property and/or part of property that for the majority of 3 (three) years has not been used for business activities related to the operational activities of the Sharia BPR since the property was owned. (3) The determination of Vacant Property as referred to in paragraph (1) must be approved by the Board of Directors and documented. (4) In the event of a difference in the determination of Vacant Property of the Sharia BPR between the Sharia BPR and the Financial Services Authority, the determination of Vacant Property determined by the Financial Services Authority shall apply.
Article 45
(1) Sharia BPRs are required to take resolution efforts for Vacant Property owned.
(2) Sharia BPRs are required to document resolution efforts for Vacant Property as referred to in paragraph (1).
(3) Sharia BPRs are required to consider Vacant Property recorded in the financial position report as a reduction factor in the core capital of the Sharia BPR in the calculation of KPMM by:
a. 15% (fifteen percent) of the value of Vacant Property owned for more than 1 (one) year up to 3 (three) years since it was determined as Vacant Property; b. 50% (fifty percent) of the value of Vacant Property owned for more than 3 (three) years up to 5 (five) years since it was determined as Vacant Property; or
c. 100% (one hundred percent) of the value of Vacant Property owned for more than 5 (five) years since it was determined as Vacant Property.
(4) The Financial Services Authority may determine different time periods from the time periods as referred to https://jdih.ojk.go.id/

meant in paragraph (3) based on an analysis of the local and surrounding regional economic conditions.

Article 46
(1) Sharia People's Economy Banks (BPR Syariah) that violate the provisions as referred to in Article 44 paragraph (1), paragraph (3), Article 45 paragraph (1), paragraph (2), and/or paragraph (3) shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 44 paragraph (1), paragraph (3), Article 45 paragraph (1), paragraph (2), and/or paragraph (3), the Sharia People's Economy Bank shall be subject to administrative sanctions in the form of:
a. a downgrade of the Sharia People's Economy Bank's health level; and/or b. a temporary suspension of some business activities.
(3) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 44 paragraph (1), paragraph (3), Article 45 paragraph (1), paragraph (2), and/or paragraph (3), the principal party of the Sharia People's Economy Bank may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER VII
ASSETS IN THE FORM OF REAL ESTATE (AYDA)

Article 47
(1) Sharia People's Economy Banks are required to classify Productive Assets as non-performing before carrying out the acquisition of AYDA.
(2) To carry out the acquisition of AYDA as referred to in paragraph (1), Sharia People's Economy Banks are required to conduct an appraisal of each collateral. (3) The appraisal of each collateral as referred to in paragraph (2) shall be conducted through:
a. auction, conducted in accordance with the provisions of legislation regarding the implementation of auctions; b. outside of auction, must be conducted by:

an independent appraiser for collateral with a value of at least Rp1,000,000,000.00 (one billion rupiah); and
an internal appraiser for collateral with a value of less than Rp1,000,000,000.00 (one billion rupiah).
(4) Sharia People's Economy Banks are required to conduct periodic re-appraisals of AYDA in accordance with financial accounting standards and Sharia People's Economy Bank accounting guidelines. (5) The re-appraisal as referred to in paragraph (4) must be conducted by:
a. an independent appraiser for AYDA with a value of at least Rp1,000,000,000.00 (one billion rupiah); and b. an internal appraiser for AYDA with a value of less than Rp1,000,000,000.00 (one billion rupiah). (6) In the event that the value of AYDA experiences a decline, Sharia People's Economy Banks are required to recognize such decline as a loss. (7) In the event that the value of AYDA experiences an increase, Sharia People's Economy Banks are prohibited from recognizing such increase as income. (8) In carrying out the acquisition of AYDA for the settlement of Financing, Sharia People's Economy Banks apply:
a. the principle of prudence and risk management; and b. the principle of consumer protection in accordance with the provisions of legislation regarding consumer and community protection in the financial service sector.

Article 48
(1) The acquisition of AYDA as referred to in Article 47 paragraph (1) is temporary and must be liquidated as soon as possible calculated from the acquisition of AYDA by the Sharia People's Economy Bank. (2) Sharia People's Economy Banks are required to calculate AYDA for types of collateral as referred to in Article 27 paragraph (1) letters b, d, e, and f recorded in the financial position report as a factor reducing the core capital of the Sharia People's Economy Bank in the calculation of the KPMM ratio by:
a. 15% (fifteen percent) of the AYDA value for AYDA held for more than 1 (one) year up to 3 (three) years; b. 50% (fifty percent) of the AYDA value for AYDA held for more than 3 (three) years up to 5 (five) years; and/or
c. 100% (one hundred percent) of the AYDA value for AYDA held for more than 5 (five) years.
(3) Sharia People's Economy Banks are required to calculate AYDA for types of collateral other than those referred to in Article 27 paragraph (1) letters b, d, e, and f recorded in the financial position report as a factor reducing the core capital of the Sharia People's Economy Bank in the calculation of the KPMM ratio by:
a. 50% (fifty percent) of the AYDA value for AYDA held for more than 1 (one) year up to 2 (two) years; and/or b. 100% (one hundred percent) of the AYDA value for AYDA held for more than 2 (two) years. (4) Sharia People's Economy Banks are required to document efforts to liquidate AYDA as referred to in paragraph (1). (5) Sharia People's Economy Banks are required to apply accounting treatment for the acquisition of AYDA in accordance with financial accounting standards and accounting guidelines for Sharia People's Economy Banks. (6) The Financial Services Authority may establish different timeframes from the timeframe as referred to in paragraph (2) based on an analysis of the local and surrounding regional economic conditions.

Article 49
(1) Sharia People's Economy Banks that violate the provisions as referred to in Article 47 paragraph (1), paragraph (2), paragraph (3) letter b, paragraph (4), paragraph (5), paragraph (6), paragraph (7), Article 48 paragraph (1), paragraph (2), paragraph (3), paragraph (4), and/or paragraph (5) shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 47 paragraph (1), paragraph (2), paragraph (3) letter b, paragraph (4), paragraph (5), paragraph (6), paragraph (7), Article 48 paragraph (1), paragraph (2), paragraph (3), paragraph (4), and/or paragraph (5), the Sharia People's Economy Bank shall be subject to administrative sanctions in the form of:
a. a downgrade of the Sharia People's Economy Bank's health level; and/or b. a temporary suspension of some business activities.
(3) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 47 paragraph (1), paragraph (2), paragraph (3) letter b, paragraph (4), paragraph (5), paragraph (6), paragraph (7), Article 48 paragraph (1), paragraph (2), paragraph (3), paragraph (4), and/or paragraph (5), the principal party of the Sharia People's Economy Bank may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER VIII
WRITE-OFF

Article 50
(1) Write-off is prohibited except for Productive Assets that have a non-performing quality and are supported by the formation of reserves of 100% (one hundred percent). (2) Write-off is prohibited for a portion of fund provision.

Article 51
(1) Sharia People's Economy Banks are prohibited from carrying out write-off as referred to in Article 50 unless the Sharia People's Economy Bank has made efforts to recover the Productive Assets provided. (2) Sharia People's Economy Banks are required to document efforts to recover the Productive Assets provided as referred to in paragraph (1) and the basis for consideration for the implementation of write-off. (3) Sharia People's Economy Banks are required to administer data and information regarding Productive Assets that have undergone write-off.

Article 52
(1) Sharia People's Economy Banks that violate the provisions as referred to in Article 50 and/or Article 51 shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 50 and/or Article 51, the Sharia People's Economy Bank shall be subject to administrative sanctions in the form of:
a. a downgrade of the Sharia People's Economy Bank's health level; and/or b. a temporary suspension of some business activities.
(3) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 50 and/or Article 51, the principal party of the Sharia People's Economy Bank may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER IX
FINANCING POLICY AND FINANCING PROCEDURE

Article 53
(1) For the provision of funds in the form of Financing, Sharia People's Economy Banks are required to:
a. have and apply written Financing Policy and Financing Procedure referring to the Sharia People's Economy Bank Financing Policy Guidelines contained in Appendix IV which is an integral part of this Financial Services Authority Regulation; and b. evaluate the Financing Policy and Financing Procedure periodically in accordance with the needs of the Sharia People's Economy Bank. (2) The Financing Policy as referred to in paragraph (1) must contain at least:
a. the principle of prudence in Financing; b. the fulfillment of Sharia principles in Financing;
c. Financing organization and management;
d. Financing approval policy; e. Financing documentation and administration; f. Financing supervision; g. handling of problematic Financing; and h. the implementation of periodic evaluation of the Financing Policy and Financing Procedure as referred to in paragraph (1). (3) The Financing Policy as referred to in paragraph (1) must be approved by the Board of Commissioners. (4) The Financing Procedure as referred to in paragraph (1) must be approved by the Board of Directors. (5) The Financing Policy as referred to in paragraph (3) and the Financing Procedure as referred to in paragraph (4) must be evaluated by the Sharia Supervisory Board (DPS) before being approved by the Board of Commissioners and the Board of Directors.

Article 54
(1) The Board of Commissioners and DPS are required to conduct effective supervision over the implementation of the Financing Policy as referred to in Article 53 paragraph (1). (2) Effective supervision conducted by the Board of Commissioners as referred to in paragraph (1) must include at least:
a. reviewing and approving the Financing Policy proposed by the Board of Directors; b. supervising the implementation of the Board of Directors' responsibilities regarding the application of the Financing Policy and Financing Procedure; and
c. reporting the results of supervision over the implementation of the Financing Policy and Financing Procedure by the Board of Directors to the Financial Services Authority in the supervision report of the Sharia People's Economy Bank's business plan in accordance with the Financial Services Authority Regulation regarding the business plan of people's credit banks and Sharia people's financing banks.
(3) The supervision result report as referred to in paragraph (2) letter c must contain at least:
a. the application of the principle of prudence in the provision of Financing in the form of:

assessment of the implementation of the Financing Policy and Financing Procedure;
fulfillment of the Maximum Financing Limit (PPKA);
maximum fund disbursement limits;
Financing to related parties, Group Customers, and/or certain Large Customers; and
handling of problematic Financing, consisting of Financing Restructuring, settlement through the acquisition of AYDA or sale of collateral, and/or write-off;
b. assessment of the implementation of handling problematic Financing accompanied by an explanation of the factors causing problematic Financing and efforts that have been made to resolve problematic Financing; and
c. suggestions and recommendations of the Board of Commissioners regarding the implementation of the Financing Policy.
(4) Effective supervision conducted by the DPS as referred to in paragraph (1) must include at least:
a. evaluating the Financing Policy and Financing Procedure related to the fulfillment of Sharia Principles as referred to in Article 53 paragraph (5); b. evaluating the Board of Directors' accountability for the implementation of the Financing Policy and Financing Procedure related to the fulfillment of Sharia Principles; and
c. reporting the results of supervision over the fulfillment of Sharia principles in the implementation of the Financing Policy and Financing Procedure by the Board of Directors to the Financial Services Authority in the DPS supervision result report in accordance with the Financial Services Authority regulations regarding governance for Sharia people's financing banks.

Article 55
(1) Sharia People's Economy Banks that violate the provisions as referred to in Article 53, Article 54 paragraph (1), and/or paragraph (3) shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 53, Article 54 paragraph (1), and/or paragraph (3), the Sharia People's Economy Bank shall be subject to administrative sanctions in the form of:
a. a downgrade of the Sharia People's Economy Bank's health level; and/or b. a temporary suspension of some business activities.
(3) In the event that a Sharia People's Economy Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2) and continues to violate the provisions as referred to in Article 53, Article 54 paragraph (1), and/or paragraph (3), the principal party of the Sharia People's Economy Bank may be subject to administrative sanctions in the form of a prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER X
TRANSITIONAL PROVISIONS

Article 56
The provisions regarding Vacant Property as referred to in Article 44 and Article 45 shall be implemented with the following provisions:
a. for property owned before this Financial Services Authority Regulation takes effect, it shall be designated as Vacant Property as referred to in Article 44 if within a period of 3 (three) years after this Financial Services Authority Regulation takes effect it is not used for business activities related to the operational activities of the Sharia People's Economy Bank and the Sharia People's Economy Bank calculates the Vacant Property as a factor reducing core capital in the KPMM calculation as referred to in Article 45; and b. for property owned after this Financial Services Authority Regulation takes effect, it shall be designated as Vacant Property as referred to in Article 44 and the Sharia People's Economy Bank calculates the Vacant Property as a factor reducing core capital in the KPMM calculation as referred to in Article 45.

Article 57
At the time this Financial Services Authority Regulation takes effect, the formation of the Maximum Financing Limit (PPKA) as referred to in Article 31 shall be carried out until December 31, 2024, except for the formation of the PPKA as referred to in Article 21 paragraph (2) letter b.

Article 58
At the time this Financial Services Authority Regulation takes effect, the Financing Policy and Financing Procedure of Sharia People's Economy Banks that have not undergone evaluation by the DPS as referred to in Article 53 paragraph (5), the implementation of evaluation by the DPS over the Financing Policy and Financing Procedure shall be reported in the DPS supervision result report as referred to in Article 54 paragraph (4) letter c in the I Semester 2025 reporting period.

CHAPTER XI
CLOSING PROVISIONS

Article 59
The provisions regarding:
a. Capital Participation as referred to in Article 18; and b. Provision for Impairment of Productive Assets (CKPN) as referred to in Article 33 and Article 34, shall take effect as of January 1, 2025.

Article 60
At the time this Financial Services Authority Regulation takes effect, the provisions as referred to in Article 7 paragraph (4) and Article 8 paragraph (5) of Financial Services Authority Regulation Number 66/POJK.03/2016 regarding Minimum Capital Provision and Minimum Core Capital Fulfillment for Sharia People's Financing Banks (State Gazette of the Republic of Indonesia Year 2016 Number 299, Supplement to the State Gazette of the Republic of Indonesia Number 5989) are repealed and declared invalid.

Article 61
At the time this Financial Services Authority Regulation takes effect, Financial Services Authority Regulation Number 29/POJK.03/2019 regarding Productive Asset Quality and Formation of Provision for Write-off of Productive Assets of Sharia People's Economy Banks (State Gazette of the Republic of Indonesia Year 2019 Number 228, Supplement to the State Gazette of the Republic of Indonesia Number 6424) is repealed and declared invalid.

Article 62
This Financial Services Authority Regulation takes effect as of the date of its promulgation.

This copy is in accordance with the original
Director of Legal Development
Legal Department
Aat Windradi

In order that everyone may know it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on November 29, 2024
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,
MAHENDRA SIREGAR

Promulgated in Jakarta on November 29, 2024
MINISTER OF LAW OF THE REPUBLIC OF INDONESIA,
SUPRATMAN ANDI AGTAS

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2024 NUMBER 34/OJK

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 24 YEAR 2024
CONCERNING
ASSET QUALITY OF SHARIA PEOPLE'S ECONOMY BANKS

I. GENERAL
Sharia People's Economy Banks (BPR Syariah) as intermediary institutions that carry out business activities of collecting and disbursing funds from and to the community must always pay attention to the principle of prudence and the principle of healthy Financing, including policies in the provision of Financing, assessment of Financing quality, as well as professionalism and integrity of the Board of Directors, Board of Commissioners, Sharia Supervisory Board (DPS), and BPR Syariah employees in the field of Financing so that Financing quality remains smooth.

In addition to managing Productive Assets in the form of Financing provided, Sharia People's Economy Banks need to ensure that the management of Assets in general is carried out by paying attention to the principle of prudence, risk management, and Sharia Principles.

Considering that there are several provisions related to the prudence principle of Sharia People's Economy Banks and to implement the provisions of Article 40 of Law Number 21 of 2008 concerning Sharia Banking as amended several times, lastly with Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector as well as changes in accounting standards applicable to Sharia People's Economy Banks, it is necessary to harmonize the provisions so that the implementation of the aforementioned provisions can be carried out well, thereby creating a productive, healthy, and competitive Sharia People's Economy Bank industry.

In this regard and considering the dynamic and challenging development of the Sharia People's Economy Bank industry in facing asset management risks, it is necessary to refine regulations regarding asset quality, including the expansion of the scope of Productive Assets, mechanisms and timeframes for the settlement of AYDA, the obligation to form Provision for Impairment of Productive Assets (CKPN) in accordance with financial accounting standards, strengthening the role of the Sharia Supervisory Board (DPS) in asset management, and other regulations.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Paragraph (1)
The principle of prudence in Asset management, particularly Financing, is among others conducted based on an analysis of business feasibility by paying attention to at least the 5C's factors, namely character, capacity, capital, collateral, and condition of economy. The application of Sharia Principles in Asset management, among others, means that managed Assets do not contain elements of riba, maisir, garar, haram, and zalim. Paragraph (2) Good quality in Productive Assets is indicated by smooth quality. Steps required to maintain good Asset quality include among others the effective application of credit risk management, including through the preparation and implementation of financing policies and guidelines in accordance with this Financial Services Authority Regulation.

Article 3
Paragraph (1)
Clear enough.
Paragraph (2)
The determination of Productive Asset quality by the Financial Services Authority is among others based on the results of Financial Services Authority examinations regarding the assessment and information regarding the condition of Customers. Paragraph (3) Clear enough.

Article 4
Paragraph (1)
The same project or business includes projects or businesses that are the same source of payment for principal and/or margin/profit share/ujrah.
Paragraph (2)
Example 1:
Sharia People's Economy Bank "B" provides 2 (two) Financing facilities in the form of Home Ownership Financing and Motor Vehicle Ownership Financing to Customer "A". The assessment results conducted by Sharia People's Economy Bank "B" for each of these facilities:
a. Smooth, for Home Ownership Financing; and b. Less Smooth, for Motor Vehicle Ownership Financing.
Given that both Financings are used to finance 1 (one) same Customer, the Productive Asset quality determined by Sharia People's Economy Bank "B" for the Financing provided to Customer "A" follows the lower Productive Asset quality, namely less smooth. Example 2:
Sharia People's Economy Bank "B" provides Financing facilities to Customer "A" and Customer "C" which are used to finance the same project, namely project "D". The main source of repayment for Financing, both by Customer "A" and Customer "C", comes from the cash flow to be obtained from project "D". The assessment results conducted by Sharia People's Economy Bank "B" for Financing provided to Customer "A" and Customer "C":
a. Smooth, for Customer "A"; and b. Less Smooth, for Customer "C".
Given that both Financings are used to finance the same project and the source of payment for Financing obligations comes from the same project, the Productive Asset quality determined by Sharia People's Economy Bank "B" for Financing provided to Customer "A" and Customer "C" follows the lower Productive Asset quality, namely less smooth. Paragraph (3) Example of determining Productive Asset quality based on different assessment factors:
Sharia People's Economy Bank "A" determines the Productive Asset quality against Company "B" which is a supporting institution of Sharia People's Economy Bank "A" as follows:
a. in the form of Financing based on assessment factors consisting of business prospects, Customer performance, and payment ability; and b. in the form of Capital Participation based on measurement and/or recording methods for Capital Participation. Because there are differences in assessment factors for determining the quality of Productive Assets in the form of Financing and Capital Participation, the quality of Financing and the quality of Capital Participation can be determined differently.

Article 5
Paragraph (1)
The same project or business includes projects or businesses that are the same source of payment for principal and/or margin/profit share/ujrah.
Paragraph (2)
Letter a
The amount limit as referred to in this regulation is calculated against all facilities provided to each Customer or each project, both for individual Customers and groups of Customers if Productive Assets are used to finance the same project. Productive Assets provided by each Sharia People's Economy Bank with an amount greater than Rp1,000,000,000.00 (one billion rupiah) to 1 (one) Customer or 1 (one) same project are not influenced by the Productive Asset quality provided by other Sharia People's Economy Banks to the same Customer or project with an amount less than or equal to Rp1,000,000,000.00 (one billion rupiah). Letter b The 25 (twenty-five) largest Customers are determined individually by the Sharia People's Economy Bank. The amount limit as referred to in this regulation is calculated against all facilities provided to each Customer. Productive Assets provided by Sharia People's Economy Bank with an amount greater than Rp500,000,000.00 (five hundred million

rupiah) up to Rp1,000,000,000.00 (one billion rupiah) to 1 (one) Customer who is one of the 25 (twenty-five) largest Customers of that Sharia People's Economy Bank, is not influenced by the quality of Productive Assets provided by other Sharia People's Economy Banks to the same Customer or project with an amount less than or equal to Rp1,000,000,000.00 (one billion rupiah).

Example:
Customer “A” is:
a. One of the 25 (twenty-five) largest Customers of Sharia People's Economy Bank “C” with a Productive Asset portfolio of Rp750,000,000.00 (seven hundred fifty million rupiah) with a performing quality; b. A Customer of Sharia People's Economy Bank “D” with a Productive Asset portfolio of Rp750,000,000.00 (seven hundred fifty million rupiah) with a special attention quality.

Sharia People's Economy Bank “C” is not required to equalize the quality of Productive Assets for Customer “A” to special attention, considering the Productive Asset portfolio of Sharia People's Economy Bank “D” for Customer “A” is less than Rp1,000,000,000.00 (one billion rupiah).

Letter c
Productive Assets provided based on a Joint Financing agreement, i.e., financing structures such as syndication. In determining the same quality for Productive Assets provided based on a Joint Financing agreement, there is no minimum amount limit. Thus, Productive Assets provided to 1 (one) Customer or 1 (one) same project based on a Joint Financing agreement are determined to have the same quality even if the Productive Assets provided by each Sharia People's Economy Bank are less than or equal to Rp1,000,000,000.00 (one billion rupiah).

Paragraph (3)
Example:
Sharia People's Economy Bank “B” and Sharia People's Economy Bank “C” have a Joint Financing (syndication) agreement to provide Financing facilities to Customer “A”. The assessment results conducted by Sharia People's Economy Bank “B” and Sharia People's Economy Bank “C” for the Financing provided to Customer “A”:
a. Performing, at Sharia People's Economy Bank “B”; and b. Substandard, at Sharia People's Economy Bank “C”.

Considering the facility is provided to the same Customer and the source of payment for obligations comes from the same business and there is no clear separation of cash flows, the quality determined for the Financing facilities to Customer “A” by both Sharia People's Economy Bank “B” and Sharia People's Economy Bank “C” is the same, following the lower quality of Productive Assets, which is substandard.

Paragraph (4)
Example of determining Productive Asset quality based on different assessment factors:
Financing quality is determined based on assessment factors such as business prospects, Customer performance, and payment ability. On the other hand, Sharia Securities quality is determined based on assessment factors such as rating, timeliness of payment of remuneration or other similar obligations, and payment maturity. Because there are differences in assessment factors for determining the quality of Financing and Sharia Securities, the quality of Financing and Sharia Securities can be determined differently even for the same Customer or project.

Paragraph (5)
Clearly stated.

Article 6
Paragraph (1)
Letter a
Sources of funds include, among others, salaries, inheritances, and/or other income.

Letter b
The term “clear separation of cash flows from each different project, business, or source of funds” means there is no significant interconnection in cash flows between projects, businesses, or sources of funds. Cash flow interconnection is considered significant, among others, in cases where the continuity of cash flow for a project, business, or source of funds will be disrupted if the cash flow of another project, business, or source of funds experiences disruption. Information on the separation of cash flows from each project, business, or source of funds is included in the Financing analysis during the Financing provision process and documented adequately.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.

Article 7
Paragraph (1)
Business prospects include project prospects that are part of that business.

Paragraph (2)
Limits are calculated against all Financing facilities provided to 1 (one) Customer or more than 1 (one) Customer when Financing is used to finance the same project or business. Timeliness of principal and/or margin/profit share/ujrah payments is, among others, assessed through timely payment of principal and/or margin/profit share/ujrah and/or no arrears and in accordance with the agreed Financing requirements.

Paragraph (3)
Clearly stated.

https://jdih.ojk.go.id/

Article 8
Paragraph (1)
Letter a
Potential business growth is, among others, assessed through projections of the Customer's business growth.

Letter b
Market conditions and the Customer's position in competition are, among others, assessed through the impact of economic conditions and/or business competition in the market on the Customer's business.

Letter c
Management quality and labor issues are, among others, assessed through the Customer's business management governance, labor composition, and/or labor disputes or strikes.

Letter d
Support from owners, groups, or affiliates is, among others, assessed from the capacity and ability of owners, groups, or affiliates to support the Customer's business.

Letter e
The term “Customer” refers to Customers who are required to carry out environmental management efforts in accordance with regulations concerning environmental protection and management.

Paragraph (2)
Letter a
Profitability is, among others, assessed through income and cost analysis (cost and benefit analysis) and/or profit growth from period to period.

Letter b
Capital structure is, among others, assessed through the Customer's capital ability to finance the business, including the ability to add capital if necessary.

Letter c
Cash flow is, among others, assessed through liquidity analysis and the Customer's working capital and/or the Customer's ability to meet principal and/or margin/profit share/ujrah payment obligations without support from other sources of funds besides the financed project or business.

Paragraph (3)
Letter a
Timeliness of principal and/or margin/profit share/ujrah payments is, among others, assessed through timely payment of principal and/or margin/profit share/ujrah and/or no arrears and in accordance with the agreed Financing requirements.

Letter b
Availability and accuracy of Customer financial information is, among others, assessed through the regular and accurate submission of financial information by the Customer that can be trusted for its correctness.

Letter c
Completeness of Financing documentation is, among others, assessed through compliance with Financing documentation requirements based on Financing policies and procedures.

Letter d
Compliance with Financing agreements is, among others, assessed through the level of Customer violations of Financing agreements.

Letter e
Appropriateness of fund usage is, among others, assessed through the alignment between the actual use of funds and the purpose of the Financing application and/or the alignment of Financing facilities with the Customer's needs.

Letter f
Fairness of the obligation payment source is, among others, assessed through the alignment of the obligation payment source with the project or business financed by the Sharia People's Economy Bank or the relevant Customer's income.

Article 9
Letter a
The term “significance and materiality” refers to the magnitude of the impact of assessment factors and components on the determination of Financing quality.

Letter b
Clearly stated.

Article 10
Conditions causing Customers to lack the ability to pay principal and/or margin/profit share/ujrah include, among others, the source of payment for principal and/or margin/profit share/ujrah coming from the same Sharia People's Economy Bank.

Article 11
Clearly stated.

Article 12
Financing violations include, among others, Financing provided using fake identities or the identities of other parties who do not enjoy the Financing facility.

Article 13
Paragraph (1)
The term “payment grace period” refers to the period granted to not make principal and/or margin/profit share/ujrah installment payments while the Customer's project or business has not yet generated revenue.

Example:
Financing for agriculture with a payment grace period during the planting period.
The provision of a payment grace period is included in the Financing agreement.

Paragraph (2)
Clearly stated.

https://jdih.ojk.go.id/

Article 14
Paragraph (1)
Clearly stated.

Paragraph (2)
The term “accumulation during the period of running Mudarabah Financing or Musyarakah Financing” refers to the sum of RBH or PBH from the beginning of Financing until the position of the assessment month.

Example:
Mudarabah Financing is provided in March 2025, with a tenure of 1 (one) year. The calculation of accumulated PBH conducted in June 2025 is the PBH of March 2025 plus the PBH of April 2025 plus the PBH of May 2025 plus the PBH of June 2025.

Paragraph (3)
PBH can be set in annual, semi-annual, quarterly, or monthly periods, considering among others the business cycle and Customer cash inflows.

Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.

Article 15
Paragraph (1)
The determination of whether periodic principal installment payments are necessary is adjusted to the characteristics of the Customer's business being financed.

Paragraph (2)
Steps to reduce risk include, among others, evaluating the Customer's business performance at least 1 (one) time in 1 (one) year.

Paragraph (3)
Clearly stated.

Article 16
Clearly stated.

Article 17
Clearly stated.

Article 18
Clearly stated.

Article 19
Paragraph (1)
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
The term “blocked” refers to actions preventing the transfer, conversion, exchange, placement, distribution, relocation, or movement of collateral for a certain period.

https://jdih.ojk.go.id/

Article 20
Clearly stated.

Article 21
Paragraph (1)
Conventional banks consist of conventional general banks and people's economy banks.

Paragraph (2)
Letter a
Fund placement in conventional general banks is not included in the category of Productive Assets because interest income from conventional general banks cannot be recognized as income for Sharia People's Economy Banks.

Letter b
Clearly stated.

Article 22
Clearly stated.

Article 23
Clearly stated.

Article 24
Clearly stated.

Article 25
Letter a
The term “Multiservice Financing” refers to the provision of funds for the transfer of benefits over services for a certain period with rental payments (ujrah) as referred to in the Financial Services Authority regulations concerning the implementation of Sharia People's Economy Bank products.

Letter b
Clearly stated.

Letter c
Clearly stated.

Article 26
Depreciation or amortization policies for Ijarah Financing and IMBT Financing refer to the applicable financial accounting standards for Sharia People's Economy Banks. The chosen depreciation or amortization policy must reflect the expected pattern of consumption of future economic benefits from the objects of Ijarah Financing and IMBT Financing.

Article 27
Paragraph (1)
Letter a
The term “market value” is the estimated monetary amount that can be obtained from a sale transaction or the result of an exchange of an asset on the assessment date after deducting transaction costs. The market value of jewelry gold refers to the prevailing price in the local gold market. The determination of the market value of jewelry gold can be conducted internally by the Sharia People's Economy Bank or by an independent appraiser, such as a gold shop or a gold pawn institution. Internal appraisers of the Sharia People's Economy Bank are permitted provided that the employees of that Sharia People's Economy Bank have adequate ability and experience in appraising jewelry gold.

Letter b
The term “land and/or buildings with certificates” refers to land and/or buildings, with proof of ownership rights to land and/or buildings in the form of ownership rights, business use rights, building use rights, use rights, and/or building ownership certificates for individual apartment units. Included in buildings are standalone houses, apartments, shop-houses, office-houses, or office buildings. Properties that can be subject to fiduciary rights include, among others, apartments with proof of ownership certificates for individual apartment units in accordance with regulations.

Letter c
Clearly stated.

Letter d
Included in buildings are standalone houses, apartments, shop-houses, office-houses, or office buildings.

Letter e
The term “Taxable Tax Notification or last Taxable Object Value Notification letter” refers to the Taxable Tax Notification or the last available Taxable Object Value Notification letter. Land acknowledgment letters include, among others, girik letters, petok D, letter C, rincik, and/or ketitir.

Letter f
The term “business premises” includes, among others, stalls, kiosks, and/or stands.

Letter g
Mortgages for ships with a weight of 20 m³ (twenty cubic meters) and above in accordance with regulations.

Letter h
Clearly stated.

Letter i
Financing that is secured includes, among others, Financing secured by employment termination insurance for Financing to employees in accordance with the agreed agreement.

Letter j
Clearly stated.

Letter k
The term “independent appraiser” refers to an appraiser who:
a. is not a related party to the Sharia People's Economy Bank; b. is not part of a Customer group with the Sharia People's Economy Bank's Customers; and
c. meets requirements in accordance with regulations established by the competent authority.

https://jdih.ojk.go.id/

Paragraph (2)
Clearly stated.

Paragraph (3)
Example:
On August 20, 2025, Sharia People's Economy Bank “YP” provided a Financing facility to Customer “Nia” with collateral in the form of land subject to a mortgage worth Rp375,000,000.00 (three hundred seventy-five million rupiah). The collateral that can be calculated as a reduction for Special PPKA is 80% (eighty percent) of the collateral value, which is Rp300,000,000.00 (three hundred million rupiah). On August 20, 2027, the Financing facility was classified as non-performing by Sharia People's Economy Bank “YP”. If after 2 (two) years, i.e., after August 19, 2029, Customer “Nia”'s non-performing Financing has not been resolved, the collateral value used as a factor for reducing Special PPKA is 50% (fifty percent) of Rp300,000,000.00 (three hundred million rupiah), which is Rp150,000,000.00 (one hundred fifty million rupiah). If after 4 (four) years, i.e., after August 19, 2031, Customer “Nia”'s non-performing Financing above is still not resolved, the collateral value cannot be calculated as a factor for reducing Special PPKA.

Paragraph (4)
Customer obligations to the Sharia People's Economy Bank calculate the remaining principal balance, margin/profit share/ujrah, and other costs related to Financing settlement in accordance with the Financing agreement, including costs required for collateral execution.

Paragraph (5)
Example:
On August 20, 2025, Sharia People's Economy Bank “YP” provided a Financing facility to Customer “Nia” with collateral in the form of a motor vehicle subject to fiduciary rights worth Rp100,000,000.00 (one hundred million rupiah). The collateral that can be calculated as a factor for reducing Special PPKA is 50% (fifty percent) of the collateral value, which is Rp50,000,000.00 (fifty million rupiah). On August 20, 2027, the Financing facility was classified as non-performing by Sharia People's Economy Bank “YP”. If after 1 (one) year, i.e., after August 19, 2028, Customer “Nia”'s non-performing Financing has not been resolved, the collateral value used as a factor for reducing Special PPKA is 50% (fifty percent) of Rp50,000,000.00 (fifty million rupiah), which is Rp25,000,000.00 (twenty-five million rupiah). If after 2 (two) years, i.e., after August 19, 2029, Customer “Nia”'s non-performing Financing has not been resolved, the collateral value cannot be calculated as a factor for reducing Special PPKA.

Paragraph (6)
Analysis of the local and surrounding economic conditions is based on, among others:

economic growth; and
observation of prices and/or sales levels:

https://jdih.ojk.go.id/

a. land; and/or b. buildings, in that area.

Article 28
Paragraph (1)
The term “collateral assessment” refers to the estimate and opinion by the internal appraiser of the Sharia People's Economy Bank and/or an independent appraiser regarding the economic value of collateral based on analysis of objective and relevant facts according to methods and principles generally applicable in the appraisal of each type of collateral. Periodic collateral assessment includes, among others, re-appraisal of collateral during Financing restructuring. The term “periodically” refers to the assessment period for collateral as contained in the Financing policies and procedures of the Sharia People's Economy Bank.

Paragraph (2)
Clearly stated.

Paragraph (3)
The term “significant decline in collateral value” refers to a decline in collateral value caused by, among others, fire and/or natural disasters.

Article 29
Clearly stated.

Article 30
The term “Deposit Insurance Agency” refers to the Deposit Insurance Agency in accordance with the Law on the Deposit Insurance Agency.

Example:
Sharia People's Economy Bank “NR” places funds with “Bank Dina Syariah” with the following details:

Deposit Type	Amount Placed	Quality
Current Account	Rp2,000,000,000.00	Performing
Savings	Rp1,000,000,000.00	Performing
Deposits	Rp4,000,000,000.00	Performing
Sharia Certificates of Deposit	Rp3,000,000,000.00	Performing
Total Placements	Rp10,000,000,000.00

All fund placements of Sharia People's Economy Bank “NR” with “Bank Dina Syariah” meet the criteria requirements for Deposit Insurance Agency guarantee. Assuming the guaranteed balance in accordance with regulations concerning guarantee by the Deposit Insurance Agency for each customer at one bank is at most Rp2,000,000,000.00 (two billion rupiah), the calculation of PPKA for all placements of Sharia People's Economy Bank “NR” with “Bank Dina Syariah” is as follows:

PPKA = 0.5% x (Rp10,000,000,000.00 – Rp2,000,000,000.00) = Rp40,000,000.00.

Article 31
Clearly stated.

https://jdih.ojk.go.id/

Article 32
Counterparties include, among others, fraud perpetrators.

Article 33
Clearly stated.

Article 34
Clearly stated.

Article 35
Clearly stated.

Article 36
Compliance with Sharia Principles includes, among others:

Sharia People's Economy Banks may impose compensation (ta’widh) on Customers in Financing Restructuring. Compensation is determined at the actual cost incurred for collecting rights that should have been paid by the Customer and not estimated potential losses due to lost opportunities (al-furshah al-dha-i’ah).
Changes agreed upon between the Sharia People's Economy Bank and the Customer in Financing Restructuring, including the determination of compensation, must be included in an addendum to the Financing agreement.
In the event that Financing Restructuring is carried out through conversion of the contract, a new Financing agreement must be made.

Article 37
Paragraph (1)
Clearly stated.

Paragraph (2)
Letter a
Rescheduling is carried out through, among others, changes to the Customer's obligation payment schedule and/or changes to the tenure.

Letter b
Reconditioning is carried out through, among others:

changes to the payment schedule;
changes to the installment amount;
changes to the tenure;
changes to the nisbah in Mudarabah Financing or Musyarakah Financing;
changes to PBH in Mudarabah Financing or Musyarakah Financing; and/or
provision of discounts.

Letter c
Restructuring is carried out through, among others:

addition of Financing facility funds by the Sharia People's Economy Bank; and/or
conversion of the Financing contract.

Paragraph (3)
Clearly stated.

Paragraph (4)
The term “previous Financing agreement” refers to all related Financing agreements between the Sharia People's Economy Bank and the Customer.

Paragraph (5)
Clearly stated.

Article 38
Paragraph (1)
Clearly stated.

Paragraph (2)
Letter a
The term “objectivity” refers to an honest attitude without being influenced by personal opinions and considerations or groups in making decisions or taking actions.

Letter b
The term “independence” refers to the professional management of the Sharia People's Economy Bank without influence or pressure from any party.

Letter c
Conflicts of interest include, among others, differences between the economic interests of the Sharia People's Economy Bank and the personal economic interests of shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, executives, and/or related parties to the Sharia People's Economy Bank. The term “executives” refers to executives in accordance with Financial Services Authority Regulations regarding people's economy banks and Sharia People's Economy Banks.

Letter d
The term “fairness” refers to justice and equality in fulfilling the rights of stakeholders arising from agreements and regulations.

Article 39
Paragraph (1)
Clearly stated.

Paragraph (2)
Example 1:
Sharia People's Economy Bank “AP” provides Murabahah Financing to Customer “Fauzan” in the amount of Rp1,000,000,000.00 (one billion rupiah). However, Customer “Fauzan” experiences difficulty in paying principal and/or margin, so the Financing quality is classified as non-performing and Financing Restructuring is conducted by Sharia People's Economy Bank “AP” considering that the Customer still has good business prospects and is assessed to be able to meet obligations after Financing restructuring. The determination of Financing quality for Customer “Fauzan” after Financing Restructuring is as follows:

Payment Period	Financing Quality at End of Assessment Month	Principal	Margin
0 (restructuring)	Substandard	-	-
1	Meets	Meets	Substandard
2	Meets	Meets	Substandard
3	Meets	Meets	Performing
4	Meets	Meets	Financing quality for Customer “Fauzan” is determined based on timeliness of principal and/or margin payments.

Example 2:
Sharia People's Economy Bank “NTP” provides Murabahah Financing to Customer “Meli” in the amount of Rp7,000,000,000.00 (seven billion rupiah). However, Customer “Meli” experiences difficulty in paying principal and/or margin, so the Financing quality is classified as non-performing and Financing Restructuring is conducted by Sharia People's Economy Bank “NTP” considering that the Customer still has good business prospects and is assessed to be able to meet obligations after Financing Restructuring. The determination of Financing quality for Customer “Meli” after Financing Restructuring is as follows:

Payment Period	Financing Quality at End of Assessment Month	Principal	Margin
0 (restructuring)	Substandard	-	-
1	Meets	Meets	Substandard
2	Meets	Meets	Substandard
3	Meets	Meets	Performing
4	Meets	Meets	Financing quality for Customer “Meli” is determined based on business prospects, Customer performance, and payment ability.

Example 3:
Sharia People's Economy Bank “EQ” provides Murabahah Financing to Customer “Arman” in the amount of Rp1,000,000,000.00 (one billion rupiah). However, Customer “Arman” experiences difficulty in paying principal and/or margin, so the Financing quality is classified as non-performing and Financing Restructuring is conducted by Sharia People's Economy Bank “EQ” considering that Customer “Arman” still has good business prospects and is assessed to be able to meet obligations after Financing Restructuring. The determination of Financing quality for Customer “Arman” after Financing Restructuring is as follows:

Payment Period	Financing Quality at End of Assessment Month	Principal	Margin
0 (restructuring)	Substandard	-	-
1	Meets	Meets	Substandard

https://jdih.ojk.go.id/

not meet meet stuck meet meet current* stuck meet meet quality of Customer "Arman" Financing determined based on accuracy of principal and/or margin payment. Explanation:
no outstanding principal and/or margin after restructuring was carried out, in the example above the principal arrears for period 2 have been paid off. there is outstanding principal and/or margin after carrying out Financing Restructuring because in the example above in period 3 the Customer did not pay the principal arrears for period 2, so the quality of Financing determined is the same as the quality of Financing before carrying out Financing Restructuring. Example 4:
Sharia BPR "YP" provides Murabahah Financing to Customer "Aldo" with an amount of Rp7,000,000,000.00 (seven billion rupiah). However, Customer "Aldo" experienced difficulty in paying principal and/or margin so that the quality of Financing was determined as stuck and carried out Financing Restructuring by Sharia BPR "YP" by considering Customer "Aldo" still has good business prospects and is assessed to be able to meet obligations after Financing Restructuring. The determination of quality of Financing for Customer "Aldo" after Financing Restructuring is as follows:
Period
Payment
Quality of Financing at the End of the Month
Assessment Principal Margin
0 restructuring substandard meet meet substandard not meet meet stuck meet meet current stuck meet meet quality of Financing for Customer "Aldo" determined based on business prospects, performance of the Customer, and ability to pay. Explanation:
*no outstanding principal and/or margin after carrying out Financing Restructuring, in the example above the principal arrears for period 2 have been paid off. https://jdih.ojk.go.id/

there is outstanding principal and/or margin after carrying out Financing Restructuring because in the example above in period 3 the Customer did not pay the principal arrears for period 2, so the quality of Financing determined is the same as the quality of Financing before carrying out Financing Restructuring. Paragraph (3) Clear enough.
Article 40
Accounting treatment for Financing Restructuring is applied among other things recognition of losses arising from Financing Restructuring.
Article 41
Paragraph (1)
Clear enough.
Paragraph (2)
What is meant by "accumulation during the period Financing since the Financing Restructuring agreement" is the sum of RBH or PBH from the beginning of Financing Restructuring until the position of the assessment month. Example:
Musyarakah Financing was given in January 2024, with a duration of 2 (two) years. In March 2025 it was approved to carry out Financing Restructuring.
Calculation of accumulated PBH carried out in June 2025, namely PBH of March 2025 plus PBH of April 2025 plus PBH of May 2025 plus PBH of June 2025, does not take into account accumulated PBH before carrying out Financing Restructuring.
Article 42
Clear enough.
Article 43
Clear enough.
Article 44
Paragraph (1)
Idle Property includes among other things land and/or buildings that are not used for Sharia BPR business activities such as buildings and/or land that are leased. Not included in Idle Property among other things properties categorized as Sharia BPR assets related to transactions ijarah and IMBT, properties used to support Sharia BPR business activities and owned in reasonable quantities such as official residences, properties used for educational facilities, and other properties that have been established for use in business activities in the near future. Paragraph (2) Properties used for Sharia BPR business activities are predominantly, i.e., with a share of more than 50% (fifty percent). Measurement of the portion used for Sharia BPR business activities is carried out separately for each property. https://jdih.ojk.go.id/

On August 20, 2025, Sharia BPR purchased land and buildings that will be used for the opening of a new branch office with an acquisition value of Rp500,000,000.00 (five hundred million rupiah). If after 3 (three) years, i.e., after August 19, 2028, the land and buildings mentioned are not used for branch offices, since August 20, 2028, Sharia BPR establishes the land and buildings mentioned as Idle Property at their book value. Paragraph (3) Clear enough. Paragraph (4) The determination of Idle Property by the Financial Services Authority among other things is based on the results of examinations by the Financial Services Authority regarding the utilization of property.
Article 45
Paragraph (1)
Settlement efforts among other things can be done by actively marketing to sell Idle Property.
Paragraph (2)
Documentation among other things includes evidence of data and information regarding marketing efforts for the sale of Idle Property.
Paragraph (3)
Example:
On September 20, 2028, Sharia BPR established land and buildings as Idle Property with a book value of Rp350,000,000.00 (three hundred fifty million rupiah). a. If after 1 (one) year since the date of establishment Idle Property, Sharia BPR has not been able to use the land and buildings mentioned for Sharia BPR operational activities, in the calculation of KPMM Sharia BPR, since September 20, 2029 until September 19, 2031, the value of Idle Property calculated as a factor reducing the core capital of Sharia BPR:
Idle Property = 15% x Rp350,000,000.00 =
Rp52,500,000.00. b. If after 3 (three) years since the date of establishment Idle Property, Sharia BPR has not been able to use the land and buildings mentioned for Sharia BPR operational activities, in the calculation of KPMM Sharia BPR, since September 20, 2031 until September 19, 2033, the value of Idle Property calculated as a factor reducing the core capital of Sharia BPR:
Idle Property = 50% x Rp350,000,000.00 =
Rp175,000,000.00.
c. If after 5 (five) years since the date of establishment
Idle Property, Sharia BPR has not been able to use the land and buildings mentioned for Sharia BPR operational activities, in the calculation of KPMM Sharia BPR, since September 20, 2033, the value of Idle Property calculated as a factor reducing the core capital of Sharia BPR:
https://jdih.ojk.go.id/

Idle Property = 100% x Rp350,000,000.00 =
Rp350,000,000.00.
Paragraph (4)
See explanation of Article 27 paragraph (6).
Article 46
Clear enough.
Article 47
Paragraph (1)
Clear enough.
Paragraph (2)
What is meant by "assessment of each collateral" is the appraisal and opinion by the internal appraiser of Sharia BPR and/or independent appraiser on the economic value of collateral based on analysis of objective facts and relevant according to methods and principles generally applicable in appraisal of each type of collateral. What is meant by "independent appraiser" is an appraiser who:
a. is not a related party to Sharia BPR; b. is not a group of Customers with Customers of Sharia BPR; and
c. meets requirements according to regulations established
by the competent authority.
Paragraph (3)
Clear enough.
Paragraph (4)
What is meant by "periodically" is according to the period of assessment of collateral as contained in Sharia BPR in Financing policy and Financing procedures. Paragraph (5) Clear enough. Paragraph (6) Clear enough. Paragraph (7) Clear enough. Paragraph (8) Clear enough.
Article 48
Paragraph (1)
What is meant by "disbursed as soon as possible" is BPR Syariah immediately carries out disbursement efforts against AYDA.
In the event that there is a buyer offering a fair price or not detrimental to Sharia BPR, Sharia BPR must be able to settle the purchase offer mentioned and not hold or delay the purchase offer mentioned. Thus, disbursement of AYDA carried out as soon as possible. Efforts to disburse against AYDA among other things are carried out by actively marketing and selling AYDA. Paragraph (2) Example:
On August 20, 2025, Sharia BPR "X" carried out acquisition of AYDA in the form of land submitted by https://jdih.ojk.go.id/

by the Customer with a net realizable value of Rp100,000,000.00 (one hundred million rupiah). a. If after 1 (one) year since the date of acquisition of AYDA, Sharia BPR "X" has not been able to disburse AYDA, in the calculation of KPMM for Sharia BPR "X", since August 20, 2026 until August 19 2028, the value of AYDA calculated as a factor reducing the core capital of Sharia BPR "X":
AYDA = 15% x Rp100,000,000.00
= Rp15,000,000.00 b. If after 3 (three) years since the acquisition of AYDA Sharia BPR "X" has not been able to disburse AYDA, in the calculation of KPMM for Sharia BPR "X", since August 20, 2028 until August 19, 2030, the value of AYDA calculated as a factor reducing the core capital of Sharia BPR "X":
AYDA = 50% x Rp100,000,000.00
= Rp50,000,000.00
c. If after 5 (five) years since the acquisition of
AYDA, Sharia BPR "X" has not been able to disburse AYDA thereof, in the calculation of KPMM for Sharia BPR "X", since August 20, 2030, the value of AYDA calculated as a factor reducing the core capital of Sharia BPR "X":
AYDA = 100% x Rp100,000,000.00
= Rp100,000,000.00
Paragraph (3)
Example:
On August 20, 2025, Sharia BPR "X" carried out acquisition of AYDA in the form of motor vehicles submitted by the Customer with a net realizable value (net realizable value) of Rp100,000,000.00 (one hundred million rupiah). a. If after 1 (one) year since the date of acquisition of AYDA, Sharia BPR "X" has not been able to disburse AYDA, in the calculation of KPMM for Sharia BPR "X", since August 20, 2026 until August 19 2027, the value of AYDA calculated as a factor reducing the core capital of Sharia BPR "X":
AYDA = 50% x Rp100,000,000.00
= Rp50,000,000.00 b. If after 2 (two) years since the acquisition of AYDA, Sharia BPR "X" has not been able to disburse AYDA, in the calculation of KPMM for Sharia BPR "X", since August 20, 2027, the value of AYDA calculated as a factor reducing the core capital of Sharia BPR "X":
AYDA = 100% x Rp100,000,000.00
= Rp100,000,000.00
Paragraph (4)
Clear enough.
Paragraph (5)
Clear enough.
Paragraph (6)
See explanation of Article 27 paragraph (6).
Example:
The Financial Services Authority establishes additional time for settlement of AYDA for 1 (one) year, calculation of AYDA https://jdih.ojk.go.id/

as a factor reducing the core capital of Sharia BPR in the calculation of KPMM ratio is:
a. 15% (fifteen percent) of the value of AYDA for AYDA owned for more than 2 (two) years up to 4 (four) years; b. 50% (fifty percent) of the value of AYDA for AYDA owned for more than 4 (four) years up to 6 (six) years; and/or
c. 100% (one hundred percent) of the value of AYDA for AYDA
owned for more than 6 (six) years.
Article 49
Clear enough.
Article 50
Paragraph (1)
Clear enough.
Paragraph (2)
Write-off implementation is carried out against all funds provided in one agreement.
Article 51
Paragraph (1)
Efforts to recover Productive Assets provided for fund provision among other things in the form of collection from Customers, Financing Restructuring, collection from parties providing guarantees for Productive Assets, and settlement of Financing through sale of collateral. Paragraph (2) Clear enough. Paragraph (3) Clear enough.
Article 52
Clear enough.
Article 53
Paragraph (1)
Evaluation of Financing policy and Financing procedures periodically is carried out by paying attention to regulations and legislation.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Clear enough.
Paragraph (5)
Evaluation carried out by DPS so that Financing policy and Financing procedures are in accordance with Sharia Principles.
Article 54
Paragraph (1)
Clear enough. https://jdih.ojk.go.id/

Paragraph (2)
Clear enough.
Paragraph (3)
Letter a
Number 1
Clear enough.
Number 2
Clear enough.
Number 3
Clear enough.
Number 4
What is meant by "related party" is related party according to Financial Services Authority Regulation regarding maximum limits for credit provision for rural credit banks and maximum limits for fund disbursement by Sharia people's financing banks. Number 5 Clear enough. Letter b Clear enough. Letter c Clear enough. Paragraph (4) Clear enough.
Article 55
Clear enough.
Article 56
Clear enough.
Article 57
After December 31, 2024, the formation of PPKA as referred to in Article 21 paragraph (2) letter b remains valid.
Article 58
Clear enough.
Article 59
Clear enough.
Article 60
Clear enough.
Article 61
Clear enough.
Article 62
Clear enough.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 102/OJK https://jdih.ojk.go.id/

APPENDIX I
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 24 YEAR 2024
REGARDING
ASSET QUALITY OF SHARIA PEOPLE'S ECONOMY BANKS PRODUCTIVE ASSET QUALITY DIFFERENCE REPORT Name of Sharia BPR :
Report Position :
No. Name
Customer
Identity
Number
Address
Customer
At the Relevant Sharia BPR
Type of
Productive Asset
Account
Number
Type
Usage Ceiling
Debit Balance
Start
Date
Due
Date
Quality
I II III IV V VI VII VIII IX X XI XII
At Other Sharia BPR
Explanation Name of Other Sharia
Bank
Bank
Code
Type of
Productive Asset
Type
Usage Ceiling
Debit Balance
Start
Date
Due
Date
Quality
XIII XIV XV XVI XVII XVIII XIX XX XXI XXII https://jdih.ojk.go.id/

Customer Name
Filled with the name of the Customer, whether individual Customer or in the form of a business entity.
Identity Number
Filled with the identity number of the Customer who receives facilities from Sharia BPR, namely National Identity Number (NIK) in the event that the customer is an individual or Taxpayer Identification Number (NPWP) in the event that the Customer is in the form of a business entity.
Customer Address
Filled with the complete address of the Customer or the address of the Customer's business location.
Account Number
Filled with the account number in accordance with the Circular Letter of the Financial Services Authority regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for Sharia BPR.
Type of Productive Asset
Filled with the type of Productive Asset received by the Customer.
Type of Usage
Filled with the type of usage in the form of working capital, investment, or consumption in accordance with the Circular Letter of the Financial Services Authority regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for Sharia BPR.
Ceiling
Filled with the nominal ceiling of the Financing facility. For Financing with a sales contract, this column is filled with the price of the principal of the Reporter (acquisition price minus down payment).
Debit Balance
Filled with:
a. principal price balance for Murabahah Financing, Istishna Financing, and multi-service Financing; b. total Financing balance for Mudarabah Financing, Musyarakah Financing, and Qardh Financing; and
c. principal arrears for Ijarah Financing and IMBT Financing.
Start Date
Filled with the start date in accordance with the Circular Letter of the Financial Services Authority regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for Sharia BPR.
Due Date
Filled with the due date in accordance with the Circular Letter of the Financial Services Authority regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for Sharia BPR.
Quality
Filled with the quality code in accordance with the Circular Letter of the Financial Services Authority regarding reporting through the Financial Services Authority reporting system and transparency of financial conditions for Sharia BPR. https://jdih.ojk.go.id/

This copy is in accordance with the original
Director of Legal Development
Legal Department
Aat Windradi
12. Explanation
Filled with information related to the Customer among other things in the form of project and/or business information that is financed, source of installment payments, reasons for determining quality differences, and others. Established in Jakarta on November 29, 2024 CHAIRMAN OF THE COMMISSIONERS BOARD FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, MAHENDRA SIREGAR signed signed https://jdih.ojk.go.id/

APPENDIX II
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 24 YEAR 2024
REGARDING
ASSET QUALITY OF SHARIA PEOPLE'S ECONOMY BANKS
PART A
DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF FINANCING BASED ON PROFIT-SHARING CONTRACTS BUSINESS PROSPECTS Component Current Special Attention Substandard Doubtful Stuck

Potential
business growth
Business activities still have growth.
Business activities do not have growth.
Business activities have negative growth.
Business activities are likely to have the potential to cease operations in the near future.
No potential business growth
(business has ceased operations).
Market conditions and
position of the Customer in competition

Stable market;
and/or
Customer's position in
the market is good, including position that is strong in the market.
Market share
comparable to competitors; and/or
Customer's position in
the market is quite good with a high level of competition.
Market is influenced
by changes in economic conditions; and/or
Customer's position in
the market is less good.
Market is influenced
by changes in economic conditions that are significant; and/or
Customer's position in
the market is weak.
Loss of market
in line with conditions economic downturn; and/or
Customer's business
has ceased operations. https://jdih.ojk.go.id/

BUSINESS PROSPECTS
Component
Current Special Attention Substandard Doubtful Stuck
3. Quality
management and labor issues

Quality
management is very good; and/or
Never recorded experiencing
management disputes or labor strikes, or ever experienced management disputes or labor strikes minor in 1 (one) year last year but has been resolved well.
Quality management
is good; and/or
Ever experienced
management disputes or labor strikes in 1 (one) last year that has been resolved well but still exists possibility for recurrence.
Quality
management is quite good; and/or
There are
management disputes or labor strikes in 1 (one) last year with impact that is quite material for Customer's business activities.
Quality
management is less good; and/or
There are
management disputes or labor strikes in 1
(one) year last year with impact that is material for Customer's business activities.
Quality management is not good (no human resources that support the implementation of business).

Support from
owners, groups, or affiliates
Owners, groups, or affiliates are stable and support Customer's business.
Owners, groups, or affiliates are stable and do not have burdensome impact on the Customer.
Owners, groups, or affiliates are less stable and start to give impact that is burdensome to the Customer.
Owners, groups, or affiliates have given impact that is burdensome to the Customer.
Owners, groups, or affiliates are very detrimental to the Customer. https://jdih.ojk.go.id/

BUSINESS PROSPECTS
Component
Current Special Attention Substandard Doubtful Stuck
5. Efforts made
by the Customer to maintain the environment (for large-scale Customers whose type of business has an impact important to the environment in accordance with the provisions of legislation) Environmental management efforts have been carried out well and achieve results in accordance with minimum requirements in accordance with the provisions of legislation regarding protection and management of the environment. Environmental management efforts have been carried out quite well but have not reached minimum requirements in accordance with the provisions of legislation regarding protection and management of the environment. Environmental management efforts are less good and have not reached minimum requirements in accordance with the provisions of legislation regarding protection and management of the environment. Environmental management efforts have not been carried out in accordance with the provisions of legislation regarding protection and management of the environment. Environmental management efforts have not been carried out in accordance with the provisions of legislation regarding protection and management of the environment, and there is a possibility to be prosecuted criminally or sued civilly in court. https://jdih.ojk.go.id/

CUSTOMER PERFORMANCE
Component
Current Special Attention Substandard Doubtful Stuck

Profitability Good profit acquisition. Good profit acquisition
but tends to decline.
Profit acquisition is low and declining very significantly.

Profit acquisition
negative
(incurring losses); and/or
Operational activities
are financed with asset sales.
Profit acquisition
negative
(incurring losses) in large amounts and eroding capital; and/or
Customer is unable
to meet all obligations.
•

Capital structure
Capital is very strong.
Capital is strong.
Capital is quite strong.
Capital is less strong.
Capital is not strong. https://jdih.ojk.go.id/

CUSTOMER PERFORMANCE
Component
Current Special Attention Substandard Doubtful Stuck
3. Cash flow • Strong liquidity and
working capital; and/or

Cash flow analysis
shows that the Customer is able to meet obligations for repayment of Financing as well as profit share without support from additional funding sources and meets other operational needs.
Liquidity and
working capital are quite strong; and/or
Cash flow analysis
shows that although the Customer is able to meet obligations for repayment of Financing as well as profit share but there are indications of certain problems that if not addressed will affect payments in the future.
Liquidity is less
and working capital is limited; and/or
Cash flow analysis
shows that the Customer is only able to provide profit share and/or partial installments of Financing.
Liquidity is very
low; and/or
Cash flow analysis
shows inability to repay installments of Financing as well as profit share.
Liquidity difficulties;
and/or
Cash flow analysis
shows that the Customer is unable to repay installments of Financing as well as profit share and cover production costs. https://jdih.ojk.go.id/

ABILITY TO PAY
Component
Current Special Attention Substandard Doubtful Stuck

Accuracy of principal and/or profit share payments.
a. There are principal installment payments

Principal installment payments
on time;
Arrears on
principal installment payments have not exceeded 30 (thirty) days and financing has not matured; or
Arrears on
principal repayment have not exceeded
15 (fifteen) days after maturity; and
Arrears on
principal installment payments have exceeded
30 (thirty) days but have not exceeded 90
(ninety) hours; or
Arrears on
principal repayment have exceeded
15 (fifteen) days but have not exceeded 30 (thirty) hours after maturity; and/or
Arrears on
principal installment payments have exceeded 90 (ninety) hours but have not exceeded 180 (one hundred eight teen) hours; or
Arrears on
principal repayment have exceeded 30
(thirty) days but have not exceeded 60 (sixty) hours after maturity; and/or
Arrears on
principal installment payments have exceeded
180 (one hundred eighty) days but have not exceeded 360 (three hundred sixty) hours; or
Arrears on
principal repayment have exceeded 60
(sixty) days but have not exceeded 90
(ninety) days after maturity; and/or
Arrears on
principal installment payments have exceeded
360 (three hundred sixty) days; or
Arrears on
principal repayment have exceeded
90 (ninety) days after maturity; and/or https://jdih.ojk.go.id/

PAYMENT ABILITY

Component	Current	Special Mention	Substandard	Doubtful	Loss
Payment Ability
Components
1. Payment of Principal and/or Margin
a. Financing with installments of 1 (one) month or more
- No overdue principal and margin installments; or
- Overdue principal and/or margin installments not exceeding 30 (thirty) days from the installment due date and the Financing has not yet matured.
- Overdue principal and/or margin installments exceeding 30 (thirty) days from the installment due date but not exceeding 90 (ninety) days from the installment due date; or
- The Financing has matured not more than 15 (fifteen) days.
- Overdue principal and/or margin installments exceeding 90 (ninety) days from the installment due date but not exceeding 180 (one hundred eighty) days from the installment due date; or
- The Financing has matured more than 15 (fifteen) days but not more than 30 (thirty) days.
- Overdue principal and/or margin installments exceeding 180 (one hundred eighty) days from the installment due date but not exceeding 360 (three hundred sixty) days from the installment due date; or
- The Financing has matured more than 30 (thirty) days but not more than 60 (sixty) days.
- Overdue principal and/or margin installments exceeding 360 (three hundred sixty) days from the installment due date;
- The Financing has matured more than 60 (sixty) days;
- The Financing has been handed over to the Directorate General of State Assets (DJKN); and/or
- The Financing has applied for compensation from the Financing insurance company.
b. Financing with installments of less than 1 (one) month
- No overdue principal and/or margin installments; or
- Overdue principal and/or margin installments not exceeding 15 (fifteen) days from the installment due date and the Financing has not yet matured.
- Overdue principal and/or margin installments exceeding 15 (fifteen) days from the installment due date but not exceeding 30 (thirty) days from the installment due date; or
- The Financing has matured not more than 15 (fifteen) days.
- Overdue principal and/or margin installments exceeding 30 (thirty) days from the installment due date but not exceeding 90 (ninety) days from the installment due date; or
- The Financing has matured more than 15 (fifteen) days but not more than 30 (thirty) days.
- Overdue principal and/or margin installments exceeding 90 (ninety) days from the installment due date but not exceeding 180 (one hundred eighty) days from the installment due date; or
- The Financing has matured more than 30 (thirty) days but not more than 60 (sixty) days.
- Overdue principal and/or margin installments exceeding 180 (one hundred eighty) days from the installment due date;
- The Financing has matured more than 60 (sixty) days;
- The Financing has been handed over to DJKN; and/or
- The Financing has applied for compensation from the Financing insurance company.
2. Availability and Accuracy of Financial Information
- The relationship between the Customer and the Sharia BPR is good, the Customer always submits financial information regularly and accurately; and/or
- There is up-to-date financial reports and the results of the Sharia BPR's analysis of the financial reports or financial information submitted by the Customer.
The relationship between the Customer and the Sharia BPR has deteriorated and the financial information is not reliable or there are no results of the Sharia BPR's analysis of the financial reports/financial information submitted by the Customer.
The relationship between the Customer and the Sharia BPR is very poor and financial information is not available or not reliable.
3. Completeness of Financing Documentation
Financing documentation is complete.
Financing documentation is incomplete, including among others regarding financing application documents, especially the identity documents of the business owner.
Financing documentation is incomplete, including among others regarding financing application documents, especially the business legality documents.
Financing documentation is significantly incomplete, including among others regarding financing application documents and financing analysis is inadequate.
There is no Financing documentation (financing application documents, financing analysis, financing agreements, disbursement warrants).
4. Compliance with Financing Agreements
There are no violations of the Financing agreement.
There are violations of the core requirements in the Financing agreement that can affect the Customer's ability to pay.
There are very fundamental violations of the core requirements in the Financing agreement that can affect the Customer's ability to pay and cause the collateral to be executed.
5. Appropriateness of Fund Usage
Fund usage is in accordance with the Financing application.
Fund usage is less in accordance with the Financing application, but the amount is not material.
Fund usage is less in accordance with the Financing application, with an amount that is quite material.
Fund usage is less in accordance with the Financing application, with an amount that is material.
Fund usage is not in accordance with the Financing application.
6. Fairness of Payment Source for Obligations
The payment source comes from the results of the financed project or business/income of the relevant Customer.
The payment source does not always come from the results of the financed project or business/income of the relevant Customer.
The payment source comes from other than the results of the financed project or business/income of the relevant Customer.
The payment source is unknown and the payment source comes from other than the results of the financed project or business/income of the relevant Customer.
There is no payment source.

PART B

DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF FINANCING BASED ON SALE AND PURCHASE AND LOAN AGREEMENTS

BUSINESS PROSPECTS

Component	Current	Special Mention	Substandard	Doubtful	Loss
1. Business Growth Potential
Business activities still have growth.
Business activities do not have growth.
Business activities have negative growth.
Business activities are likely to have the potential to cease operations in the near future.
There is no business growth potential (business has ceased operations).
2. Market Conditions and Customer's Position in Competition
- Stable market; and/or
- Customer's position in the market is good, including a strong position in the market.
- Market share is comparable to competitors; and/or
- Customer's position in the market is quite good with a high level of competition.
- The market is influenced by changes in economic conditions; and/or
- Customer's position in the market is less good.
- The market is influenced by significant changes in economic conditions; and/or
- Customer's position in the market is weak.
- Loss of market in line with deteriorating economic conditions; and/or
- The Customer's business has ceased operations.
3. Management Quality and Labor Issues
- Management quality is very good; and/or
- Never recorded experiencing management disputes or labor strikes, or has experienced minor management disputes or labor strikes in the last 1 (one) year but has been resolved well.
- Management quality is good; and/or
- Has experienced management disputes or labor strikes in the last 1 (one) year that have been resolved well but there is still a possibility of recurrence.
- Management quality is quite good; and/or
- There are management disputes or labor strikes in the last 1 (one) year with a quite material impact on the Customer's business activities.
- Management quality is less good; and/or
- There are management disputes or labor strikes in the last 1 (one) year with a material impact on the Customer's business activities.
Management quality is not good (there is no human resources to support business implementation).
4. Support from Owners, Groups, or Affiliations
Owners, groups, or affiliations are stable and support the Customer's business.
Owners, groups, or affiliations are stable and do not have a burdensome impact on the Customer.
Owners, groups, or affiliations are less stable and are beginning to have a burdensome impact on the Customer.
Owners, groups, or affiliations have had a burdensome impact on the Customer.
Owners, groups, or affiliations are very detrimental to the Customer.
5. Customer's Efforts to Maintain the Environment (for large-scale Customers whose business type has an important impact on the environment in accordance with the provisions of legislation)
Environmental management efforts have been implemented well and achieve results in accordance with minimum requirements in accordance with legislation regarding environmental protection and management.
Environmental management efforts have been implemented quite well but have not yet met minimum requirements in accordance with legislation regarding environmental protection and management.
Environmental management efforts are less good and have not met minimum requirements in accordance with legislation regarding environmental protection and management.
Environmental management efforts have not been implemented in accordance with legislation regarding environmental protection and management.
Environmental management efforts have not been implemented in accordance with legislation regarding environmental protection and management, and there is a possibility of being sued criminally or civilly in court.

CUSTOMER PERFORMANCE

Component	Current	Special Mention	Substandard	Doubtful	Loss
1. Profitability
Good profit acquisition.
Profit acquisition is quite good but tends to decline.
Profit acquisition is low and declining very significantly.
- Negative profit acquisition (incurring losses); and/or
- Operational activities are financed by asset sales.
- Negative profit acquisition (incurring losses) in large amounts and eroding capital; and/or
- The Customer is unable to meet all obligations.
2. Capital Structure
Capital is very strong.
Capital is strong.
Capital is quite strong.
Capital is less strong.
Capital is not strong.
3. Cash Flow
- Strong liquidity and working capital; and/or
- Cash flow analysis shows that the Customer is able to meet principal and margin payment obligations without additional funding support and meet other operational needs.
- Liquidity and working capital are quite strong; and/or
- Cash flow analysis shows that although the Customer is able to meet principal and margin payment obligations, there are indications of certain problems that, if not addressed, will affect future payments.
- Liquidity is low and working capital is limited; and/or
- Cash flow analysis shows that the Customer is only able to pay part of the principal and margin.
- Liquidity is very low; and/or
- Cash flow analysis shows the inability to pay principal and margin.
- Liquidity difficulties; and/or
- Cash flow analysis shows that the Customer is unable to pay principal and margin and cover production costs.

PART C

DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF FINANCING BASED ON LEASE AGREEMENTS

BUSINESS PROSPECTS

Component	Current	Special Mention	Substandard	Doubtful	Loss
1. Business Growth Potential
Business activities still have growth.
Business activities do not have growth.
Business activities have negative growth.
Business activities are likely to have the potential to cease operations in the near future.
There is no business growth potential (business has ceased operations).
2. Market Conditions and Customer's Position in Competition
- Stable market; and/or
- Customer's position in the market is good, including a strong position in the market.
- Market share is comparable to competitors; and/or
- Customer's position in the market is quite good with a high level of competition.
- The market is influenced by changes in economic conditions; and/or
- Customer's position in the market is less good.
- The market is influenced by significant changes in economic conditions; and/or
- Customer's position in the market is weak.
- Loss of market in line with deteriorating economic conditions; and/or
- The Customer's business has ceased operations.
3. Management Quality and Labor Issues
- Management quality is very good; and/or
- Never recorded experiencing management disputes or labor strikes, or has experienced minor management disputes or labor strikes in the last 1 (one) year but has been resolved well.
- Management quality is good; and/or
- Has experienced management disputes or labor strikes in the last 1 (one) year that have been resolved well but there is still a possibility of recurrence.
- Management quality is quite good; and/or
- There are management disputes or labor strikes in the last 1 (one) year with a quite material impact on the Customer's business activities.
- Management quality is less good; and/or
- There are management disputes or labor strikes in the last 1 (one) year with a material impact on the Customer's business activities.
Management quality is not good (there is no human resources to support business implementation).
4. Support from Owners, Groups, or Affiliations
Owners, groups, or affiliations are stable and support the Customer's business.
Owners, groups, or affiliations are stable and do not have a burdensome impact on the Customer.
Owners, groups, or affiliations are less stable and are beginning to have a burdensome impact on the Customer.
Owners, groups, or affiliations have had a burdensome impact on the Customer.
Owners, groups, or affiliations are very detrimental to the Customer.
5. Customer's Efforts to Maintain the Environment (for large-scale Customers whose business type has an important impact on the environment in accordance with the provisions of legislation)
Environmental management efforts have been implemented well and achieve results in accordance with minimum requirements in accordance with legislation regarding environmental protection and management.
Environmental management efforts have been implemented quite well but have not yet met minimum requirements in accordance with legislation regarding environmental protection and management.
Environmental management efforts are less good and have not met minimum requirements in accordance with legislation regarding environmental protection and management.
Environmental management efforts have not been implemented in accordance with legislation regarding environmental protection and management.
The company has not implemented environmental management efforts in accordance with legislation regarding environmental protection and management and has the possibility of being sued criminally or civilly in court.

CUSTOMER PERFORMANCE

Component	Current	Special Mention	Substandard	Doubtful	Loss
1. Profitability
Good profit acquisition.
Profit acquisition is quite good but tends to decline.
Profit acquisition is low and declining very significantly.
- Negative profit acquisition (incurring losses); and/or
- Operational activities are financed by asset sales.
- Negative profit acquisition (incurring losses) in large amounts and eroding capital; and/or
- The Customer is unable to meet all obligations.
2. Capital Structure
Capital is very strong.
Capital is strong.
Capital is quite strong.
Capital is less strong.
Capital is not strong.
3. Cash Flow
- Strong liquidity and working capital; and/or
- Cash flow analysis shows that the Customer is able to meet rental payment obligations without additional funding support and meet other operational needs.
- Liquidity and working capital are quite strong; and/or
- Cash flow analysis shows that although the Customer is able to meet rental payment obligations, there are indications of certain problems that, if not addressed, will affect future payments.
- Liquidity is low and working capital is limited; and/or
- Cash flow analysis shows that the Customer is only able to pay part of the rent.
- Liquidity is very low; and/or
- Cash flow analysis shows the inability to pay rent.
- Liquidity difficulties; and/or
- Cash flow analysis shows that the Customer is unable to pay rent and cover production costs.

PAYMENT CAPACITY
Component
Performing Special Attention Substandard Doubtful Loss

Timeliness of lease payment.
a. Lease payment
1 month or more

No outstanding lease payment arrears;
or
Outstanding lease payment arrears not exceeding 30 (thirty) days from the lease payment due date and the Financing has not yet matured.
Outstanding lease payment arrears exceeding 30 (thirty) days from the lease payment due date but not exceeding 90 (ninety) days from the lease payment due date;
or
The Financing has matured not exceeding 15 (fifteen) days.
Outstanding lease payment arrears exceeding 90 (ninety) days from the lease payment due date but not exceeding 180 (one hundred eighty) days from the lease payment due date;
or
The Financing has matured exceeding 15 (fifteen) days but not exceeding 30 (thirty) days.
Outstanding lease payment arrears exceeding 180 (one hundred eighty) days from the lease payment due date but not exceeding 360 (three hundred sixty) days from the lease payment due date;
or
The Financing has matured exceeding 30 (thirty) days but not exceeding 60 (sixty) days.
Outstanding lease payment arrears exceeding 360 (three hundred sixty) days from the lease payment due date;
The Financing has matured exceeding 60 (sixty) days;
The Financing has been handed over to the Directorate General of State Assets (DJKN); or
The Financing has been submitted for insurance claim to the Financing insurance company.

b. Lease payment less than 1 month

No outstanding lease payment arrears;
or
Outstanding lease payment arrears not exceeding 15 (fifteen) days from the lease payment due date and the Financing has not yet matured.
Outstanding lease payment arrears exceeding 15 (fifteen) days from the lease payment due date but not exceeding 30 (thirty) days from the lease payment due date; or
The Financing has matured not exceeding 15 (fifteen) days.
Outstanding lease payment arrears exceeding 30 (thirty) days from the lease payment due date but not exceeding 90 (ninety) days from the lease payment due date;
or
The Financing has matured exceeding 15 (fifteen) days but not exceeding 30 (thirty) days.
Outstanding lease payment arrears exceeding 90 (ninety) days from the lease payment due date but not exceeding 180 (one hundred eighty) days from the lease payment due date;
or
The Financing has matured exceeding 30 (thirty) days but not exceeding 60 (sixty) days.
Outstanding lease payment arrears exceeding 180 (one hundred eighty) days from the lease payment due date;
The Financing has matured exceeding 60 (sixty) days;
The Financing has been handed over to DJKN; and/or
The Financing has been submitted for insurance claim to the Financing insurance company.

Availability and accuracy of customer financial information

Customer relationship with Sharia BPR is good, customer always submits financial information regularly and accurately; and/or
There is the latest financial report and the results of Sharia BPR analysis of the financial report or financial information submitted by the customer.
Customer relationship with Sharia BPR has deteriorated and financial information cannot be trusted or there are no results of Sharia BPR analysis of the financial report/financial information submitted by the customer. Customer relationship with Sharia BPR is very poor and financial information is not available or cannot be trusted.

Completeness of Financing documentation
Financing documentation is complete.
Financing documentation is incomplete, including among others regarding Financing application documents, specifically business owner identity documents.
Financing documentation is incomplete, including among others regarding Financing application documents, specifically business legality documents.
Financing documentation is significantly incomplete, including among others regarding Financing application documents and Financing analysis is inadequate. There is no Financing documentation (Financing application documents, Financing analysis, Financing agreement, Financing disbursement warrants).
Compliance with Financing agreement
There is no violation of the Financing agreement.
There is a violation of the main Financing requirements that can affect the customer's payment capacity.
There is a very fundamental violation of the main requirements in the Financing agreement that can affect the customer's payment capacity and cause the collateral to be executed.
Appropriateness of fund usage
Fund usage is in accordance with the Financing application.
Fund usage is less in accordance with the Financing application, but the amount is not material.
Fund usage is less in accordance with the Financing application, with a fairly material amount.
Fund usage is less in accordance with the Financing application, with a material amount.
Fund usage is not in accordance with the Financing application.
Fairness of payment source for obligations
Payment source originates from the results of the financed project or business/customer income.
Payment source does not always originate from the results of the financed project or business/customer income.
Payment source originates from other than the results of the financed project or business/customer income.
Payment source is unknown and payment source originates from other than the results of the financed project or business/customer income.
There is no payment source.

PART D
DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF SHARIA SECURITIES Quality of Sharia Securities Performing Substandard Loss

a. Has an investment grade or higher rating established by a rating agency in accordance with regulations regarding rating agencies in accordance with OJK Circular Letter regarding rating agencies and ratings recognized by the Financial Services Authority; b. Remuneration and/or other similar obligations are paid in the correct amount and time in accordance with the agreement; and
c. Has not yet matured.

a. Has an investment grade or higher rating established by a rating agency in accordance with regulations regarding rating agencies in accordance with OJK Circular Letter regarding rating agencies and ratings recognized by the Financial Services Authority; b. There is a delay in payment of remuneration and/or other similar obligations; and
c. Has not yet matured;
or
If Sharia Securities do not meet the quality criteria other than number 1 (performing) and number 2 (substandard).

a. Has a lowest rating of 1 (one) level below investment grade established by a rating agency in accordance with regulations regarding rating agencies in accordance with OJK Circular Letter regarding rating agencies and ratings recognized by the Financial Services Authority; b. There is no delay in payment of remuneration and/or other similar obligations; and
c. Has not yet matured.

PART E
DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF PLACEMENTS IN OTHER BANKS Quality of Placements in Other Banks Performing Substandard Loss

In the event that there are no outstanding payments of principal and/or margin/profit share/ujrah/bonus.
In the event that there are outstanding payments of principal and/or margin/profit share/ujrah/bonus up to 5 (five) working days.

a. There are outstanding payments of principal and/or margin/profit share/ujrah/bonus exceeding 5 (five) working days; b. Sharia BPR, Sharia commercial bank, or conventional commercial bank with a Sharia business unit has been established in a bank rehabilitation status; and/or
c. Sharia BPR, Sharia commercial bank, or conventional commercial bank with a Sharia business unit has been established in a bank resolution status.

PART F
DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF CAPITAL PARTICIPATION Quality of Capital Participation Performing Substandard Doubtful Loss

In the event that the party where the Sharia BPR makes Capital Participation does not experience cumulative losses based on the latest audited annual financial report. In the event that the party where the Sharia BPR makes Capital Participation experiences cumulative losses up to 25% (twenty-five percent) of the capital of the party where the Sharia BPR makes Capital Participation based on the latest audited annual financial report. In the event that the party where the Sharia BPR makes Capital Participation experiences cumulative losses exceeding 25% (twenty-five percent) up to 50% (fifty percent) of the capital of the party where the Sharia BPR makes Capital Participation based on the latest audited annual financial report. In the event that the party where the Sharia BPR makes Capital Participation experiences cumulative losses exceeding 50% (fifty percent) of the capital of the party where the Sharia BPR makes Capital Participation based on the latest audited annual financial report.

This copy is in accordance with the original
Director of Legal Development
Legal Department
Aat Windradi

PART G
DETERMINATION OF ASSET QUALITY IN THE FORM OF FUNDS PLACEMENT IN CONVENTIONAL COMMERCIAL BANKS Quality of Funds Placement in Conventional Commercial Banks Performing Substandard Loss

In the event that there are no outstanding payments of principal.
In the event that there are outstanding payments of principal up to 5 (five) working days.

a. There are outstanding payments of principal for more than 5 (five) working days; b. The conventional commercial bank has been established in a bank rehabilitation status; and/or
c. The conventional commercial bank has been established in a bank resolution status.

Established in Jakarta on 29 November 2024
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,
MAHENDRA SIREGAR

ANNEX III
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 24 YEAR 2024
CONCERNING
ASSET QUALITY OF SHARIA PEOPLE'S ECONOMY BANKS FINANCING RESTRUCTURING PROCEDURE

Financing Restructuring can be carried out by considering the characteristics of each form of Financing, as follows:

Murabahah Financing and Istishna Financing
Restructuring of Murabahah Financing and Istishna Financing is carried out by:
a. Rescheduling
Restructuring is carried out by extending the maturity period of the Financing without changing the remaining obligations of the customer to be paid to the Sharia BPR. b. Reconditioning Restructuring is carried out by re-establishing Financing conditions including changes in payment schedule, installment amount, duration and/or granting discounts as long as it does not increase the remaining obligations of the customer to be paid to the Sharia BPR.
c. Reorganization by Converting Murabahah Financing or Istishna Financing with an Amount Equal to the Customer's Remaining Obligations into IMBT Financing, Mudarabah Financing, or Musyarakah Financing.
The aforementioned Financing Conversion is carried out as follows:

The Sharia BPR terminates the Murabahah Financing or Istishna Financing contract by considering the fair value of the Murabahah or Istishna Financing object.
If there is a difference between the customer's obligation amount and the fair value of the Murabahah or Istishna Financing object, it is recognized as follows:
a) If the fair value is smaller than the customer's obligation amount, the remaining customer obligation remains the right of the Sharia BPR, the settlement of which is agreed upon between the Sharia BPR and the customer; b) If the fair value is larger than the customer's obligation amount, the difference in value is recognized as a down payment for IMBT Financing or reduces the Mudarabah Financing capital of the Sharia BPR or increases the customer's capital portion for Musyarakah Financing.
The Murabahah or Istishna Financing object previously becomes the basis for creating a new Financing contract.
The Sharia BPR enters into a new Financing contract by considering customer conditions including business type and payment capacity.
The Sharia BPR includes the chronology of the previous Financing contract in the new Financing contract.

The remaining customer obligation in the restructuring of Murabahah Financing or Istishna Financing as referred to in letters a to c is the principal and margin amount not yet paid by the customer at the time of Financing restructuring.

Qardh Financing
Restructuring of Qardh Financing is carried out by:
a. Rescheduling
Restructuring is carried out by extending the maturity period of the Financing without changing the remaining obligations of the customer to be paid to the Sharia BPR. b. Reconditioning Restructuring is carried out by re-establishing Financing conditions including changes in payment schedule, installment amount, duration and/or granting discounts as long as it does not increase the remaining obligations of the customer to be paid to the Sharia BPR. The remaining customer obligation in the restructuring of Qardh Financing as referred to in letters a and b is the principal amount not yet paid by the customer at the time of restructuring.
Mudarabah Financing and Musyarakah Financing
Restructuring of Mudarabah Financing and Musyarakah Financing is carried out by:
a. Rescheduling
Restructuring is carried out by extending the maturity period of the Financing without changing the remaining obligations of the customer to be paid to the Sharia BPR. b. Reconditioning Restructuring is carried out by re-establishing Financing conditions including profit sharing ratio, installment amount, duration, payment schedule, and/or granting principal discounts without increasing the remaining obligations of the customer to be paid to the Sharia BPR.
c. Reorganization with Additional Funds
Restructuring is carried out by adding Sharia BPR funds to the customer so that the customer's business activities can run well again.
The remaining customer obligation in the restructuring of Mudarabah Financing or Musyarakah Financing as referred to in letters a and b is the principal amount not yet paid by the customer at the time of restructuring. Financing Restructuring does not include the extension of Mudarabah Financing or Musyarakah Financing that meets performing quality and has matured, and is not caused by the customer experiencing a decrease in payment capacity.
Ijarah Financing and IMBT Financing
Restructuring of Ijarah Financing and IMBT Financing is carried out by:
a. Rescheduling
Restructuring is carried out by extending the maturity period of the Financing and the Sharia BPR may re-establish the amount of ujrah to be paid by the customer under the following conditions:

Ijarah Asset Owned by Sharia BPR
The extension period is at most until the economic life of the ijarah asset.
Ijarah Asset Not Owned by Sharia BPR
The extension period is at most until the end of the right to use the ijarah asset. b. Reconditioning Restructuring is carried out by re-establishing Financing conditions including installment amount, duration, payment schedule, and/or granting ujrah discounts and the Sharia BPR may re-establish the ujrah to be paid by the customer, under the following conditions:
Ijarah Asset Owned by Sharia BPR
If the Sharia BPR grants an extension of the duration, the extension period is at most until the economic life of the ijarah asset.
Ijarah Asset Not Owned by Sharia BPR
If the Sharia BPR grants an extension of time, the extension period is at most until the end of the right to use the ijarah asset.
c. Reorganization by Converting Ijarah Financing or IMBT Financing into Mudarabah Financing or Musyarakah Financing.
Conversion of Financing against ijarah assets owned by the Sharia BPR is carried out as follows:
The Sharia BPR terminates the Ijarah Financing or IMBT Financing contract by considering the fair value of the ijarah asset.
If there is a difference between the fair value of the ijarah asset and the book value of the ijarah asset plus ijarah installment arrears, it is recognized as follows:
a) If the fair value is smaller than the book value plus ijarah installment arrears, the Sharia BPR recognizes a loss equal to the difference; b) If the fair value is larger than the book value plus ijarah installment arrears, the Sharia BPR recognizes deferred profit equal to the difference and amortizes it during the period of Mudarabah Financing or Musyarakah Financing.
The Sharia BPR creates a new Financing contract by considering customer conditions including business type and payment capacity.
The Sharia BPR records Mudarabah Financing or Musyarakah Financing at the fair value of the ijarah asset.
The Sharia BPR includes the chronology of the previous Financing contract in the new Financing contract.

Multijasa Financing
Restructuring of multijasa Financing is carried out by:
a. Rescheduling
Restructuring is carried out by extending the maturity period of the Financing without changing the remaining obligations of the customer to be paid to the Sharia BPR. b. Reconditioning Restructuring is carried out by re-establishing Financing conditions including installment amount, duration, payment schedule, and/or granting discounts without increasing the remaining obligations of the customer to be paid to the Sharia BPR.

This copy is in accordance with the original
Director of Legal Development
Legal Department
Aat Windradi

Established in Jakarta on 29 November 2024
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,
MAHENDRA SIREGAR

ANNEX IV
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 24 YEAR 2024
CONCERNING
ASSET QUALITY OF SHARIA PEOPLE'S ECONOMY BANKS GUIDELINES FOR SHARIA PEOPLE'S ECONOMY BANK FINANCING POLICY (PKPB)

TABLE OF CONTENTS
CHAPTER I ....................................................................................................- 73 -
INTRODUCTION ....................................................................................- 73 - A. BACKGROUND.........................................................................- 73 - B. FUNCTION AND OBJECTIVE OF SHARIA BPR FINANCING POLICY...- 73 -

Function....................................................................................- 73 -
Objective ...................................................................................- 73 -
CHAPTER II ...................................................................................................- 74 -
SCOPE OF SHARIA BPR FINANCING POLICY .............................- 74 - A. BASIC POLICIES IN FINANCING ....................................- 74 -
Prudence Principle in Financing ...............................- 74 -
Fulfillment of Sharia Principles in Financing .....................- 77 -
Organization and Management of Financing.................................- 77 -
Financing Approval Policy........................................- 81 -
Financing Documentation and Administration...........................- 84 -
Financing Supervision........................................................- 85 -
Handling of Problematic Financing ....................................- 87 -
Implementation of Periodic Evaluation of Financing
Policy and Financing Procedures..................................- 91 - B. TRANSPARENCY .............................................................................- 91 -
Information regarding Characteristics of Financing
Offered............................................................................- 91 -
Clarity regarding Financing Agreement Material and
Collateral Attachment................................................................- 92 -

CHAPTER I
INTRODUCTION
A. BACKGROUND
Based on Law Number 21 of 2008 concerning Sharia Banking as amended several times, lastly with Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (Sharia Banking Law), Sharia BPR is one type of bank with main activities of collecting funds and distributing Financing. The distribution of Financing is a business activity that is the main source of income for Sharia BPR for the continuity of Sharia BPR's business, so that Sharia BPR must maintain the quality of Financing by applying prudent principles and sound Financing principles as well as the application of Sharia Principles so that the quality of Financing provided remains performing. In the event that Sharia BPR is unable to maintain the quality of Financing well, this will affect the performance of Sharia BPR, specifically financial performance which can result in the ability of Sharia BPR to meet obligations to depositor customers being disrupted. Therefore, in order for the application of prudent principles and sound Financing principles as well as the application of Sharia Principles to be implemented consistently, Sharia BPR must have a Sharia BPR Financing Policy at least in accordance with the guidelines in this Annex.

B. FUNCTION AND OBJECTIVE OF SHARIA BPR FINANCING POLICY

Function
In carrying out business activities, Sharia BPR must have an internal control system. To implement this internal control system, Sharia BPR must have policies, procedures, and organizational devices that have functional separation. One of the internal control systems that must be owned by Sharia BPR is the internal control system in Financing, which is formulated in the FPP. The aforementioned FPP has the function as:
a. a guideline for Sharia BPR in every implementation of activities in the field of Financing that contains all aspects of Financing that meet prudent principles and sound Financing principles as well as Sharia Principles, including among others in the process of providing Financing individually, monitoring the entire Financing portfolio, as well as rescue and settlement of Financing; and b. a standard or measure in the implementation of supervision of Financing provision at all stages of the Financing process individually.
Objective
Sharia BPR must have an FPP with the objective:
a. to consistently and continuously apply prudent principles and sound Financing principles as well as Sharia Principles for the mitigation of risk in every provision of Financing; b. to prevent the abuse of authority by parties in the provision of Financing that can harm the Sharia BPR; and
c. to prevent the practice of providing Financing that is not healthy.

CHAPTER II
SCOPE OF SHARIA PEOPLE'S ECONOMY BANK FINANCING POLICY A. BASIC POLICIES IN FINANCING

Prudence Principle in Financing
The prudence principle in Financing includes policies in the provision of Financing, assessment of Financing quality, as well as professionalism and integrity of BPR Syariah officials in the field of Financing. a. Policies in the Provision of Financing Policies in the provision of Financing cover basic policies regarding the provision of healthy Financing, collateral assessment, provision of Financing to parties related to the BPR Syariah, Group Clients, and/or Large Clients, Financing to economic sectors, business activities, and high-risk clients, as well as Financing that needs to be avoided.

Healthy Financing provision policies must at least cover:
a) procedures and authority for healthy Financing including having Financing analysis procedures, Financing approval procedures, Financing documentation and administration procedures, and Financing supervision procedures; b) Financing that requires special attention; c) procedures for handling problematic Financing consisting of Financing rescue and Financing settlement; and d) settlement of collateral already possessed by the BPR Syariah obtained from the results of Financing settlement.
Collateral assessment policies must at least cover:
a) procedures and methods for collateral assessment from legal and economic aspects including:
(1) collateral ownership documents;
(2) collateral attachment;
(3) determination of collateral appraisal value; and (4) determination of the limit of collateral value against the amount of Financing to be provided, with regard to changes in collateral value during the Financing period and risk mitigation in case of obstacles to executing collateral, including ownership of land separated from ownership of buildings on that land, which are pledged separately. b) collateral to be used as a factor for reducing PPKA is collateral that exists and is clearly present, and can be executed as regulated in this Financial Services Authority Regulation. Meanwhile, collateral that does not exist and is not clearly present, and cannot be executed and cannot be used as a factor for reducing the formation of PPKA includes:
(1) collateral that has been used for general facilities that cannot be returned to its function, for example used as a public cemetery; (2) collateral in dispute; (3) collateral seized by the state; (4) collateral whose existence cannot be known, for example vehicles whose physical body no longer exists; and/or (5) collateral that no longer has economic value due to certain reasons, for example fire, accident, and others. c) Periodic Assessment of Collateral To obtain the latest value of collateral serving as Financing guarantees, BPR Syariah conducts periodic collateral assessment evaluations. The periodic evaluation period is carried out according to the needs of each BPR Syariah, including considering the results of monitoring the condition of collateral and paying attention to the development of market prices of collateral in society. Periodic collateral assessment policies include among others:
(1) Consistency of evaluation periods for collateral based on the type of collateral; and/or (2) Use of internal or independent appraisers to conduct collateral assessments.
Policies for providing Financing to parties related to the BPR Syariah, Group Clients, and/or Large Clients must at least cover:
a) the percentage of the maximum amount of Financing facilities provided to parties related to the BPR Syariah, Group Clients, and/or Large Clients against the total amount of Financing or the total capital of the BPR Syariah, based on the calculation of the BPR Syariah KPMM; b) the percentage of the maximum amount of Financing facilities provided to parties related to the BPR Syariah, Group Clients, and/or Large Clients with reference to the Financial Services Authority Regulation regarding the maximum limit for providing credit to people's credit banks and the maximum limit for distributing funds to Sharia people's financing banks; c) the provision of Financing to parties related to the BPR Syariah must be approved by at least 1 (one) member of the Board of Directors and 1 (one) member of the Board of Commissioners; d) the provision of Financing to Group Clients, and/or Large Clients, which will be syndicated and share risk (risk-sharing) with other banks, must be approved by at least 1 (one) member of the Board of Directors; e) maintaining a list of names of parties related to the BPR Syariah, Group Clients, and/or Large Clients to ensure the effectiveness of applying the maximum limit of fund distribution to all Financing facilities provided by the BPR Syariah to parties related to the BPR Syariah, Group Clients, and/or Large Clients; and f) Financing procedures approved by the Board of Directors must contain criteria for parties related to the BPR Syariah and Group Clients in accordance with the Financial Services Authority Regulation regarding the maximum limit for providing credit to people's credit banks and the maximum limit for distributing funds to Sharia people's financing banks, as well as criteria for Large Clients established by the Board of Directors.
Policies for providing Financing to economic sectors, business activities, and high-risk clients, among others, BPR Syariah must have a Financing work unit or employees who have adequate competence in the business field to be financed.
Financing provision policies for Clients who are considered politically exposed persons (PEP) must among others pay attention to regulations regarding anti-money laundering and counter-terrorism financing. Provision of Financing to economic sectors, business activities, and high-risk clients, among others:
a) commodities with highly fluctuating prices; b) economic sectors or business activities that are greatly influenced by external factors such as weather factors and others; c) economic sectors or business activities outside the expertise and capabilities of the BPR Syariah; d) business locations in specific areas such as conflict areas, riots, or disaster-prone areas; and/or e) Clients who are considered PEP in accordance with the Financial Services Authority Regulation regarding the implementation of anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction programs in the financial services sector.
Policies regarding Financing that needs to be avoided, among others:
a) Financing for speculative purposes; b) Financing provided without sufficient financial information except for Financing to micro businesses as long as there is certainty about the Client; c) Financing that requires special expertise not possessed by the BPR Syariah; and/or d) Financing to problematic Clients and/or Clients who have Financing with bad quality at the BPR Syariah or other banks. b. Financing Quality Assessment Policy The Financing quality assessment policy must be in accordance with this Financial Services Authority Regulation, among others BPR Syariah must establish the same Financing quality for several Financing accounts:
used to finance 1 (one) Client or 1 (one) project or the same business at the same BPR Syariah; and/or
provided by more than 1 (one) BPR Syariah:
a. jointly used to finance 1 (one) Client or 1 (one) project or the same business based on a joint Financing agreement; and/or b. to finance 1 (one) Client or 1 (one) project or the same business that meets certain criteria in accordance with this Financial Services Authority Regulation. The definition of 1 (one) Client includes Financing facilities to husband and wife except in the case of a property separation agreement in accordance with applicable regulations.
c. Policies regarding Professionalism and Integrity of Financing Officials or Employees
All BPR Syariah officials or employees related to Financing including members of the Board of Directors, members of the Board of Commissioners, and members of the Sharia Supervisory Board of the BPR Syariah must at least:
carry out expertise professionally, honestly, objectively, carefully, and meticulously; and
have a commitment not to carry out acts as referred to in Article 63 paragraph (2) of the Islamic Banking Law.

Fulfillment of Sharia Principles in Financing
In the KPB, it must be clearly and firmly stated that there are basic regulations regarding the procedures for providing Financing that do not contradict Sharia Principles, at least covering:
a. Financing procedures, including Financing approval procedures, documentation procedures, and Financing administration, as well as Financing supervision procedures; b. procedures for handling problematic Financing; and
c. procedures for settling Financing collateral that has been possessed by the Bank obtained from the results of Financing settlement.
Financing Organization and Management
a. Policies regarding Financing Devices
Financing devices can be:

a unit or work unit for Financing; or
employees,
who perform the function of providing Financing from the application to the disbursement of Financing, and Financing administration.
Employees who carry out Financing analysis must be different from employees who disburse Financing and Financing administrative employees.
BPR Syariah forms a Financing Committee (KP) especially for BPR Syariah that have Financing provided to parties related to the BPR Syariah, Group Clients, and/or Large Clients, and Clients with high risk. The KP is tasked with assisting the Board of Directors in evaluating and/or deciding on Financing applications in accordance with the amount and type of Financing established by the Board of Directors. The number and membership of the KP are established by the Board of Directors of the BPR Syariah in accordance with the needs of the BPR Syariah, at least consisting of the Board of Directors and officials in the field of Financing. b. Policies regarding Duties, Authorities, and Responsibilities of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Financing Devices, and Financing Committee in the Field of Financing BPR Syariah must clearly regulate the details of duties, authorities, and responsibilities of:
Board of Directors
The duties, authorities, and responsibilities of the Board of Directors related to Financing at least cover:
a) being responsible for drafting the KPB containing all aspects listed in the KPB Guidelines to be approved by the Board of Commissioners; b) approving Financing procedures referring to the KPB approved by the Board of Commissioners; c) ensuring the BPR Syariah's compliance with regulations in the field of financing; d) ensuring that the KPB is applied and implemented consistently and consistently; e) appointing KP members in the event that KP formation is required; f) being responsible for drafting the business plan in the field of Financing which is embodied in the BPR Syariah business plan submitted to the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding the business plan for people's credit banks and Sharia people's financing banks; g) ensuring that the business plan in the field of Financing is implemented; h) ensuring the implementation of improvement steps for various deviations in Financing found by the internal audit work unit or executive officials responsible for implementing the internal audit function; i) reporting improvement steps that have been, are being, and will be carried out to the Board of Commissioners periodically and in writing at least regarding:
(1) development and quality of Financing as a whole; (2) development and quality of Financing provided to parties related to the BPR Syariah, Group Clients, and/or Large Clients; (3) Financing under special supervision and problematic Financing; (4) deviations in the implementation of the KPB; (5) important findings in Financing including deviations or violations of regulations in the field of Financing reported by the internal audit work unit or executive officials responsible for implementing the internal audit function; (6) implementation of the Financing plan as embodied in the BPR Syariah business plan submitted to the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding the business plan for people's credit banks and Sharia people's financing banks; (7) deviations or violations of regulations in the field of Financing that are findings of external auditors and/or the Financial Services Authority; and (8) the number and type of education and training for Financing devices, j) establishing education and training plans for employees handling Financing and ensuring the implementation of such education and training in accordance with employee needs; and k) establishing the form, duties, authorities, and responsibilities of Financing devices in accordance with the needs of the BPR Syariah.
Board of Commissioners
The duties, authorities, and responsibilities of the Board of Commissioners related to Financing at least cover:
a) approving the BPR Syariah's Financing policies proposed by the Board of Directors; b) approving the annual Financing provision plan including to parties related to the BPR Syariah, which is embodied in the BPR Syariah business plan submitted to the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding the business plan for people's credit banks and Sharia people's financing banks; c) supervising the implementation of the annual Financing provision plan as referred to in letter b); d) requesting explanations and/or accountability from the Board of Directors and requesting improvement steps in the event that the implementation of the provision of Financing deviates from the Financing plan that has been made; e) requesting explanations and/or accountability from the Board of Directors regarding all aspects listed in the KPB; f) requesting explanations and/or accountability from the Board of Directors in the event of deviations in the implementation of the KPB; g) requesting explanations and/or accountability from the Board of Directors regarding the development and quality of the Financing portfolio as a whole including Financing provided to parties related to the BPR Syariah, Group Clients, and/or Large Clients, and other matters as referred to in Chapter II Section A.1.a.3); h) monitoring the planning and implementation of education and training for employees handling Financing; and i) reporting the results of supervision on the implementation of Financing policies and procedures by the Board of Directors to the Financial Services Authority in the business plan supervision report of the BPR Syariah in accordance with the Financial Services Authority Regulation regarding the business plan for people's credit banks and Sharia people's financing banks.
Sharia Supervisory Board
The duties and authorities of the Sharia Supervisory Board related to Financing at least include the following:
a) ensuring the fulfillment of Sharia Principles in the KPB; and b) requesting explanations and/or accountability from the Board of Directors in the event of deviations in the implementation of the KPB related to the fulfillment of Sharia Principles.
Financing Devices
The duties, authorities, and responsibilities of each employee of the Financing devices at least cover:
a) complying with all regulations established in the KPB and Financing procedures; b) carrying out duties honestly, objectively, carefully, and meticulously without influence from parties interested in the Financing applicant or other parties that can harm the BPR Syariah; c) continuously improving abilities and knowledge in the field of Financing including abilities and knowledge regarding economic sectors, business activities, and/or Clients with high risk that have been and will be financed by the BPR Syariah; and d) rejecting Financing applications submitted by Clients in the event they do not meet the requirements in the Financing procedures.
Financing Committee
The duties, authorities, and responsibilities of the KP from the Financing devices at least cover:
a) providing recommendations on the approval or rejection of Financing in accordance with the limits of authority or type of Financing including considering liquidity aspects; b) obeying and following all Financing policies and Financing procedures that have been established; c) carrying out duties especially in relation to the provision of Financing approval professionally, honestly, objectively, carefully, meticulously, and independently without being influenced by any party; and d) providing recommendations for approval or rejection of Financing to the Board of Directors along with its considerations. BPR Syariah can expand the scope of functions, duties, authorities, and responsibilities referred to in accordance with the needs of the BPR Syariah as long as it does not contradict the functions, duties, authorities, and responsibilities established in this PKPB.

Financing Approval Policy
Financing approval policies must at least cover the concept of the total relationship of the Financing applicant, the establishment of limits for Financing approval authority, the responsibility of the Financing decision-making official, the Financing approval process, the Financing agreement, and the Financing disbursement approval. a. Concept of Total Relationship of the Financing Applicant Approval of the provision of Financing must not only be based on considerations for the application for 1 (one) transaction or 1 (one) Financing account from the applicant, but must be based on a comprehensive assessment of all Financing facilities that have been provided or will be provided simultaneously to the Financing applicant referred to, or known as the concept of the total relationship of the Financing applicant. The definition of the Financing applicant includes all individuals, companies, and/or parties related to the Financing applicant who have received Financing facilities or will be given Financing simultaneously by the BPR Syariah. Approval of the provision of Financing based on the concept of the total relationship of the Financing applicant must be reflected in the Financing analysis. b. Establishment of Limits for Financing Approval Authority Regulation of limits for Financing approval authority must at least cover:

the basis for consideration and criteria for regulating limits for Financing approval authority are written in the Board of Directors' decision, including the ceiling amount, Client criteria such as connection with the BPR Syariah, being considered a high-risk Client, PEP, Group Client, and others, as well as the level of position of the appointed employee;
stages of the Financing approval process;
every provision of Financing must obtain approval from the official authorized to decide on Financing;
every Financing approval must be done in writing;
signing the Financing agreement; and
Financing disbursement approval.
c. Responsibility of the Financing Decision-Making Official
The responsibility of the Financing decision-making official must at least cover:
ensuring that every Financing provided has met banking regulations and is in accordance with the prudence principle and the principle of healthy Financing as well as Sharia Principles;
ensuring that the implementation of the provision of Financing has been in accordance with the KPB and Financing procedures;
ensuring that the provision of Financing has been based on honest, objective, careful, and meticulous assessment and is free from the influence of parties interested in the Financing applicant or other parties that can harm the BPR Syariah; and
believing that the Financing to be provided can be paid off at maturity based on analysis of the application submitted.
d. Financing Approval Process
Financing Application
In assessing the Financing application, BPR Syariah must pay attention to:
a) the Financing application is done in writing for both new Financing and Financing Restructuring; b) the Financing application as referred to in letter a) must contain complete information and meet requirements in accordance with the regulations established in the Financing procedures, including Financing history at the BPR Syariah, other banks, and/or other financial institutions; and c) data, information, and documents submitted in the Financing application must be verified to ensure completeness and truthfulness. Financing application documents must at least contain:
(1) documents related to the Client, for example Client identity documents, Family Card, Taxpayer Identification Number (NPWP), business legality documents; (2) Client financial information; and (3) documents related to collateral and its attachment.
Financing Analysis
Every Financing application that has met the requirements must be analyzed in writing, paying attention to:
a) the form, format, and analysis of Financing are adjusted to the amount and type of Financing; b) the Financing analysis must describe the concept of the total relationship of the Financing applicant in the event that the applicant has received Financing facilities or is simultaneously applying for other Financing; c) the Financing analysis must be made completely, accurately, and objectively at least containing:
(1) information related to the project or business and applicant data including results of research in the Financial Information Service System (SLIK); (2) assessment of the feasibility of the amount of the Financing application with the project or business to be financed, with the aim of avoiding the possibility of inflation (mark-up) practices that can harm the BPR Syariah; and (3) an objective assessment that is not influenced by parties interested in the Financing applicant. Financing analysis

must not merely be a formality performed to fulfill financing procedures;

d) the scope of financing analysis includes ensuring that the amount of financing requested and proposed complies with the Financial Services Authority Regulation regarding the maximum limit for granting credit to people's credit banks and the maximum limit for distributing funds by Sharia people's financing banks;

e) financing analysis must at least cover the assessment of the customer's character (character), capacity (capacity), capital (capital), collateral (collateral), and business prospects (condition of economy), commonly known as the 5C’s, as well as the assessment of the financing repayment source, which focuses on the business results conducted or the income source related to the object financed by the Sharia People's Economy Bank, and presents an evaluation of the legal aspects of financing with the aim of protecting the Sharia People's Economy Bank from potential risks; and

f) in syndicated financing, the financing analysis for a Sharia People's Economy Bank that is a syndicate participant must include an assessment of the bank acting as the syndicate coordinator. In the event that the Sharia People's Economy Bank acts as the syndicate coordinator, it must conduct an assessment of the syndicate participant banks.

Financing Approval Recommendation
The financing approval recommendation must be prepared in writing based on the results of the financing analysis that has been conducted. The content of the financing approval recommendation must align with the conclusions of the financing analysis.
Granting Financing Approval
a) Every granting of financing approval must take into account the financing analysis and the financing approval recommendation. b) Every granting of financing approval that differs from the content of the financing approval recommendation must be explained in writing.

e. Financing Agreement
Every financing that has been approved must be stipulated in a written financing agreement, with the substance of the agreement known and understood by both parties. The form, format, and content of the financing agreement are determined by the Sharia People's Economy Bank at least:

meeting the validity and legal requirements that can protect the interests of the Sharia People's Economy Bank and the Customer;
containing the amount, tenure, rate of return, purpose of use, method of repayment of financing, and other financing requirements as stipulated in the financing approval decision; and
the financing agreement must be made in at least 2 (two) copies, with one of them delivered to the Customer.

f. Financing Disbursement Approval
The disbursement of approved financing must be based on:

Financing disbursement is only approved if all conditions stipulated in the financing grant approval letter and the financing agreement have been fulfilled by the financing applicant.
Before financing disbursement is carried out, it must be ensured that all legal aspects related to the financing have been resolved and have provided adequate protection for both the Sharia People's Economy Bank and the Customer.

Financing Documentation and Administration
a. Financing Documentation
Documentation is one of the important aspects in the financing process, so financing documents must be documented well and orderly in accordance with statutory regulations.

Types of Financing Documents
Financing documents are all documents required for the disbursement of financing, which serve as evidence of the agreement or legal bond between the Sharia People's Economy Bank and the Customer, evidence of ownership of collateral goods, and other financing documents that constitute legal acts and/or may have legal consequences.

The types of financing documents that must be documented are adjusted to the financing provided, including financing application documents, financing analysis documents, financing agreements, and financing disbursement warrants.

Storage and Use of Financing Documents
Every financing document must be stored safely and orderly in accordance with statutory regulations regarding company documents. The method of use or retrieval of financing documents from storage must be ensured to have adequate security.

b. Financing Administration
Financing administration is very necessary for assessing the development and quality of financing, financing supervision, protection of the interests of the Sharia People's Economy Bank, and reporting to the Financial Services Authority, so all bookkeeping and administration of the financing process need to be regulated well and orderly.

Financing Bookkeeping
All financing provided by the Sharia People's Economy Bank must be recorded and booked correctly, completely, and accurately, covering all information required.
Financing Administration Procedures
Financing administration procedures must include elements in the internal control system, at least covering:

a) the determination of financing devices responsible for financing administration; b) types of documents that must be kept, at least covering:
(1) financing application documents including documents related to collateral and its encumbrance; (2) financing analysis documents; (3) financing agreements; (4) financing disbursement warrants; (5) documents related to the Customer; and (6) documents related to collateral and its encumbrance; and c) document bookkeeping procedures, including document codification, and document retention periods in accordance with statutory regulations.

Financing Supervision
a. Principles of Financing Supervision
Financing is one of the business activities of the Sharia People's Economy Bank that carries risks that can harm the Sharia People's Economy Bank, the interests of depositors, and banking service users, so the function of financing supervision needs to be applied comprehensively by paying attention to:

The financing supervision function must begin with early prevention efforts against the possibility of unhealthy financing practices and/or other matters that can harm the Sharia People's Economy Bank.

This must be reflected in the Sharia People's Economy Bank's internal control system related to financing, which consists of at least financing organization and management, financing policies and procedures, and the information system in the field of financing.

There is a mechanism that any violation of Standard Operating Procedures (SOP) and financing procedures can be immediately known and reported to the competent official, the Board of Directors, and/or the Board of Commissioners.
In the event of deviations in the implementation of SOPs and financing procedures related to the fulfillment of Sharia Principles, the report is also submitted to the Sharia supervisory board.
There is sufficient opportunity for the supervised party to provide explanations regarding the background of the problems and input as solutions for the future.
Financing supervision includes:
a) daily supervision by the Board of Directors and/or officials handling financing hierarchically over every implementation of granting financing, commonly known as attached supervision; and b) supervision conducted by the internal audit work unit or executive officials responsible for implementing the internal audit function

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over all aspects of financing, including review of financing policies and procedures, as well as financing organization and management.

b. Objects of Financing Supervision
Financing supervision must cover all aspects of financing and all supervision objects without exception, namely:

Supervision over the implementation of financing policies and procedures, as well as officials or employees of the Sharia People's Economy Bank related to financing.
Supervision over all types of financing and customers, especially financing to related parties with the Sharia People's Economy Bank, group customers, and/or large customers. Supervision of these parties must be conducted intensively.

c. Scope of Financing Supervision
Financing supervision must at least cover:

Regarding internal Sharia People's Economy Bank:
a) Monitoring and supervising the compliance of the financing granting and collection process with policies, procedures, and statutory regulations. b) Ensuring that the amount of financing provided does not violate or exceed the maximum fund distribution limit in accordance with Financial Services Authority Regulations governing the maximum limit for granting credit to people's credit banks and the maximum limit for providing funds by Sharia people's financing banks. c) Monitoring and supervising the compliance of handling problematic financing (Financing Restructuring, write-off, write-off of claims, and collateral takeover) with SOPs and statutory regulations. d) Monitoring the compliance of financing document bookkeeping and administration with statutory regulations. e) Monitoring the determination of financing quality and the adequacy of the amount of Provision for Financing Impairment (PPKA) in the form of financing in accordance with this Financial Services Authority Regulation. f) Issuing early warnings to work units or relevant employees in the event that the quality of customer financing or the entire financing portfolio in that work unit or employee is potentially subject to decline. g) Evaluating the compliance of the determination of employees occupying positions in the financing field with their competencies. h) Supervising the behavior of financing employees and reporting to superiors, the Board of Directors, and/or the Board of Commissioners in the event of violations or deviations committed by financing employees. i) Evaluating financing policies, procedures, organization, and management comprehensively.

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Regarding external to the Sharia People's Economy Bank:
a) Supervising the use of financing in accordance with the purpose of use of financing as stated in the financing agreement. b) Monitoring the development of customer business and customer repayment capacity, including monitoring through business site and customer collateral visits at any time based on criteria such as the amount of financing facilities, type of customer, type of project or business, and/or quality of financing. c) Issuing written early warnings to customers in the event of a decline in customer financing quality assessed as posing a risk to the Sharia People's Economy Bank. d) Monitoring economic development and customer business competition, especially customers with economic sectors, business activities, and high-risk customers.

d. Internal Audit of Financing
The internal audit function is to monitor the performance of the internal control system and ensure that the implementation of financing has been carried out correctly and in accordance with SOPs, and has met the scope of financing supervision principles, accompanied by corrective actions or recommendations.

Implementation of internal audit on financing to ensure:

financing has been granted in accordance with SOPs, financing procedures, and internal Sharia People's Economy Bank regulations, as well as statutory regulations;
financing quality and the adequacy of the amount of financing impairment provisions are in accordance with this Financial Services Authority Regulation;
financing granted to related parties with the Sharia People's Economy Bank, group customers, and/or large customers is in accordance with SOPs and Financial Services Authority Regulations governing the maximum limit for granting credit to people's credit banks and the maximum limit for providing funds by Sharia people's financing banks;
monitoring the implementation of financing document bookkeeping and administration in accordance with statutory regulations; and
handling of problematic financing, namely Financing Restructuring, write-off, write-off of claims, and collateral takeover, is in accordance with SOPs and statutory regulations.

Handling of Problematic Financing
Sharia People's Economy Banks must detect the existence of problematic financing or financing that has the potential to become problematic and handle problematic financing as soon as possible.

a. Principles of Handling Problematic Financing All employees of the Sharia People's Economy Bank, especially those related to financing, must have the same understanding in handling problematic financing, by making efforts as follows:

handling of problematic financing is carried out among others by more intensive guidance to customers with problematic financing and financing that has the potential to be problematic;
information regarding problematic financing must be clearly disclosed in financing documentation and administration for follow-up handling internally in the Sharia People's Economy Bank and submitted to the Board of Commissioners to become material in the Board of Commissioners' supervision report on the Sharia People's Economy Bank's business plan to the Financial Services Authority.
Information as referred to in item 2) must at least cover the main causes of problematic financing, the development of problematic financing, the development of handling problematic financing, and follow-up handling of problematic financing, especially those having a significant impact on the performance of the Sharia People's Economy Bank;
not making exceptions in handling problematic financing, especially for problematic financing to related parties with the Sharia People's Economy Bank, group customers, and/or large customers; and
not settling problematic financing by increasing the financing ceiling or arrears of margin/profit share/ujrah and capitalizing such arrears of margin/profit share/ujrah.

b. Formulation of Problematic Financing Handling Program The problematic financing handling program must be approved by the Board of Directors and formulated as early as possible before impacting the overall financing performance of the Sharia People's Economy Bank. The problematic financing handling program must at least cover:

handling procedures for each problematic financing in accordance with this Financial Services Authority Regulation as well as the financing policies and procedures of the Sharia People's Economy Bank regarding the rescue and settlement of problematic financing;
estimated time for settlement;
estimated results of rescue or settlement of problematic financing, both from the side of financing repayment and from the side of financing quality; and
prioritizing the handling of problematic financing to related parties with the Sharia People's Economy Bank, group customers, and/or large customers.

The problematic financing handling program is one of the materials that must be reported in the supervision report on the business plan as referred to in Chapter II item A.3.b.2).i).

c. Efforts to Handle Problematic Financing
In formulating a problematic financing handling program, the Sharia People's Economy Bank can make efforts as follows:

Financing Restructuring
Criteria for financing that can be restructured must at least meet:

a) the Customer experiences difficulties in paying principal and/or margin/profit share/ujrah; and b) the Customer has good business prospects and is assessed to be able to fulfill obligations after financing is restructured.

Financing Restructuring Policy covers at least:

a) the Board of Directors must form a work unit or appoint an official or employee to handle Financing Restructuring; b) officials or employees assigned in the work unit or officials or employees appointed to handle Financing Restructuring are not involved in the process of granting financing to the Customer to be restructured; c) in the event that the Sharia People's Economy Bank does not have a sufficient number of employees, this authority can be exercised by the Board of Directors; d) determination of the authority limit for deciding on restructured financing regulated in financing procedures; e) the development of handling restructured financing must be reported periodically by the work unit or appointed official or employee to the Board of Directors and/or the Board of Commissioners; f) the rights and obligations of the Customer and other requirements for Financing Restructuring must be stipulated in a written amendment (addendum) to the financing agreement; and g) the implementation of Financing Restructuring needs to consider the need to adjust the Sharia People's Economy Bank's financing with the projection of the Customer's repayment capacity after Financing Restructuring.

Settlement of Problematic Financing
For problematic financing that cannot be collected after rescue efforts have been made, the problematic financing can be settled with the following provisions:

a) The Board of Directors of the Sharia People's Economy Bank formulates a policy for settling problematic financing, which is stipulated in financing procedures and is responsible for its implementation. b) The Sharia People's Economy Bank must choose one of the problematic financing settlement treatments, consisting of:

settlement of financing through takeover of AYDA (Assets Yielding Dividends/Income); or
the financing settlement process.

Settlement of problematic financing is carried out in accordance with this Financial Services Authority Regulation and the Sharia People's Economy Bank's accounting guidelines.

The basis for consideration in choosing the treatment for settling problematic financing must be documented in writing.

c) To determine the treatment as referred to in letter a), the Sharia People's Economy Bank must consider:

the legality of collateral;
the type of collateral;
the good market value of collateral that is easily marketable;
the comparison of collateral value to Customer obligations (coverage); and
a statement of surrender of collateral or a power of attorney to sell from the Customer.

d) Procedures for settling financing through takeover of AYDA as referred to in item 1).a) are supplemented with:

Procedures and time limits for AYDA disbursement, including the determination of the Board of Directors or appointed officials for AYDA disbursement, and the formulation of an action plan for AYDA disbursement in accordance with this Financial Services Authority Regulation.
Procedures and periods for AYDA valuation, including periodic valuation of AYDA. Periodic re-evaluation periods are carried out according to the needs of each Sharia People's Economy Bank, paying attention to among others:
(1) Evaluation periods for AYDA based on the type of collateral; and/or (2) Use of internal or independent appraisers to conduct collateral valuation.
Application of AYDA accounting treatment, including differences in return to the Customer in accordance with this Financial Services Authority Regulation as well as the financing policies and procedures of the Sharia People's Economy Bank.
Periodic re-evaluation of AYDA in accordance with this Financial Services Authority Regulation and the Sharia People's Economy Bank's accounting guidelines.
Documentation and administration of problematic financing settlement.

e) Procedures for settling problematic financing through the financing settlement process as referred to in item a).2) are carried out in accordance with the Sharia People's Economy Bank's accounting guidelines. f) Procedures for notifying the Customer regarding the settlement of problematic financing through the takeover of AYDA.

d. Write-off and/or Write-off of Claims
In carrying out write-off and/or write-off of claims against financing with bad quality, the Sharia People's Economy Bank must pay attention to the following provisions:

Write-off can only be carried out against financing that has bad quality.
Plans for write-off of financing with bad quality in significant amounts must be recorded in the Sharia People's Economy Bank's business plan.
Implementation of write-off and/or write-off of claims

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is adjusted to the authority stated in the financing policies and procedures of the Sharia People's Economy Bank.

Write-off of bad financing can be carried out in the event:
a) the customer has no prospects for restructuring or financing restructuring efforts are unsuccessful so that the Sharia People's Economy Bank's financing portfolio remains bad; b) the collateral controlled by the Sharia People's Economy Bank is insufficient to pay off the financing; and c) the Sharia People's Economy Bank has formed sufficient PPKA (Provision for Financing Impairment).
Write-off cannot be carried out against part of the financing (partial write-off).
Write-off and/or write-off of claims can only be carried out after the Sharia People's Economy Bank has made efforts to recover the financing provided.
Write-off of bad financing is carried out in good faith, considering fairness, and without conflict of interest.
The Sharia People's Economy Bank must document the efforts made and the basis for consideration for the implementation of write-off and/or write-off of claims.
The Sharia People's Economy Bank must administer data and information regarding financing that has been written off and/or claims written off.

Implementation of Periodic Evaluation of Financing Policies and Procedures
To assess the adequacy and effectiveness of the financing granting process, the Sharia People's Economy Bank implements periodic evaluation of financing policies and procedures. The period for implementation of evaluation is carried out according to the needs of each Sharia People's Economy Bank, paying attention to among others:

a. issuance of the latest statutory regulations; b. the strategy and business plan of the Sharia People's Economy Bank; and/or
c. the current condition of the Sharia People's Economy Bank.

B. TRANSPARENCY
In the application of governance, the Sharia People's Economy Bank must apply transparency of information regarding each type of financing to be offered to Customers or prospective Customers adequately, clearly, accurately, and comparably between one product and another in accordance with the rights and needs of the Customer or prospective Customer.

The information provided must be easy and understandable for Customers and must at least cover:

Information Regarding Characteristics of Offered Financing
Information regarding the characteristics of offered financing must at least cover:

a. product name; b. benefits and risks of the financing offered to Customers or prospective Customers in full, especially risks that will arise if the Customer or prospective Customer cannot fulfill obligations as stated in the financing agreement, including imposition of sanctions (ta’zir), compensation (ta’widh), collateral takeover, and others;
c. financing requirements including among others documents that

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This copy is consistent with the original
Director of Legal Development
Legal Department
Aat Windradi

required, the mechanism and procedures for Financing applications, and collateral requirements; d. incidental costs to be charged to Customers, including administrative fees, commissions, penalties (ta'zir), compensation (ta'widh), and insurance, so that Customers obtain certainty regarding the costs to be charged and have confidence in their ability and willingness to meet obligations to the Sharia People's Economy Bank; e. information on the size of margins, profit-sharing ratios, or ujrah (fees) at least covering calculation methods, calculation procedures, charging, and adjustment of the size of profit-sharing ratios or ujrah. The calculation method for the size of margins, profit-sharing ratios, or ujrah must be accompanied by estimates or simulations of the size of margins, profit-sharing ratios, or ujrah to be charged to Customers during the Financing period; and f. the duration of each offered product and the installment schedule. Information regarding product characteristics as referred to in letters a through f must be provided by the Sharia People's Economy Bank to Customers or prospective Customers before the signing of the Financing agreement.

Clarity Regarding Financing Agreement Materials and Collateral Binding
Before the signing of the Financing agreement, the Sharia People's Economy Bank must inform transparently, completely, and clearly to prospective customers regarding the form and content of the Financing agreement and the collateral binding agreement.

Determined in Jakarta on 29 November 2024
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,
MAHENDRA SIREGAR

signed signed https://jdih.ojk.go.id/

OJK Regulation No. 24 of 2024 on Asset Quality of Sharia People's Economy Banks

PAYMENT ABILITY

PART B

DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF FINANCING BASED ON SALE AND PURCHASE AND LOAN AGREEMENTS

BUSINESS PROSPECTS

CUSTOMER PERFORMANCE

PART C

DETERMINATION OF PRODUCTIVE ASSET QUALITY IN THE FORM OF FINANCING BASED ON LEASE AGREEMENTS

BUSINESS PROSPECTS

CUSTOMER PERFORMANCE

Lineage: In force

Timeline

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