Financial Services Authority Regulation Number 13/POJK.03/2021 Concerning the Implementation of Commercial Bank Products

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FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 /POJK.03/2021
CONCERNING
THE IMPLEMENTATION OF COMMERCIAL BANK PRODUCTS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that the increase in competition in the financial services industry is driving banks to transform in providing services to the community; b. that to drive the transformation of bank services, support from the Authority for the use of technology is needed to generate innovation in creating services that are dynamic and targeted to meet customer needs;
c. that as one of the efforts to support banks in creating services that are dynamic and targeted to meet customer needs, a licensing mechanism for the implementation of products is needed that emphasizes the principle of prudence and the principle of customer protection;
d. that based on the considerations as referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning the Implementation of Commercial Bank Products.

Recalling:

Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
Law Number 21 of 2008 concerning Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);

DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE IMPLEMENTATION OF COMMERCIAL BANK PRODUCTS.

CHAPTER I
GENERAL PROVISIONS

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

Commercial Bank, hereinafter referred to as Bank, is a bank that conducts business activities conventionally or based on Sharia principles, which in its activities provides services in the payment circuit, including branch offices of banks located abroad and Sharia business units.
Bank Product is a business activity conducted by the Bank in the form of implementing products, services, and/or facilities for customer interests.
Sharia Principle is the principle of Islamic law in banking activities based on fatwas issued by institutions having authority in setting fatwas in the Sharia field.
Bank Product Implementation Plan, hereinafter abbreviated as RPPB, is a document detailing the plan for implementing new Bank Products for a period of 1 (one) year contained in the bank's business plan.
Bank Business Plan is a business plan in accordance with Financial Services Authority regulations regarding bank business plans.

Article 2
(1) Banks are required to apply effective risk management in the implementation of Bank Products.
(2) Bank Products are implemented with regard to alignment with the strategy, Bank Business Plan, and applicable regulations.
(3) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in accordance with:
a. Financial Services Authority Regulation concerning the application of risk management for commercial banks; or b. Financial Services Authority Regulation concerning the application of risk management for Sharia commercial banks and Sharia business units.

Article 3
Banks must ensure the creation of convergence in the implementation of Bank Products.

CHAPTER II
BANK PRODUCTS

Article 4
(1) Bank Products are classified into:
a. Basic Bank Products; and b. Advanced Bank Products.
(2) Basic Bank Products as referred to in paragraph (1) letter a consist of products, services, and/or facilities that are activities:
a. fundraising; b. fund disbursement; and/or
c. other simple activities,
which are determined by the Financial Services Authority.
(3) Advanced Bank Products as referred to in paragraph (1) letter b are Bank Products that:
a. are based on information technology; b. relate to the implementation of activities or products of financial service institutions other than banks;
c. require approval or licensing from other authorities; and/or
d. are complex.
(4) The types of Basic Bank Products as referred to in paragraph (2) are listed in Appendix I or Appendix II which are an integral part of this Financial Services Authority Regulation. (5) The Financial Services Authority may, based on certain considerations, designate Advanced Bank Products as Basic Bank Products.

Article 5
(1) Banks must include the plan for implementing new Bank Products in the RPPB.
(2) The inclusion of the plan for implementing new Bank Products in the RPPB as referred to in paragraph (1) covers:
a. Basic Bank Products; and/or b. Advanced Bank Products.
(3) In the event that Bank Products meet the criteria:
a. have never been implemented previously by the Bank; or b. represent a development from Bank Products that results in material changes increasing the risk exposure of previously implemented Bank Products, Bank Products are categorized as new Bank Products as referred to in paragraph (1). (4) Banks are required to have a mechanism for measuring or assessing the materiality of the increase in risk exposure from the development of Bank Products. (5) Banks that violate the obligations as referred to in paragraph (4) are subject to administrative sanctions in the form of written reprimands. (6) In the event that a Bank has been subject to administrative sanctions in the form of written reprimands as referred to in paragraph (5) and has not yet fulfilled the provisions as referred to in paragraph (4), the Bank is subject to administrative sanctions in the form of:
a. suspension of specific Bank Products; and/or b. prohibition on implementing new Bank Products.
(7) In the event that there are no plans for new Bank Products to be implemented by the Bank in a 1 (one) calendar year, the Bank must still submit a zero RPPB to the Financial Services Authority.

CHAPTER III
RISK MANAGEMENT OF BANK PRODUCT IMPLEMENTATION

Article 6
Banks ensure that the application of risk management, governance, and internal control over the implementation of Bank Products becomes an integral part of the general application of risk management, governance, and internal control.

Article 7
(1) Banks are required to have written policies and procedures to manage risks inherent in Bank Products.
(2) Policies and procedures as referred to in paragraph (1) must at least cover:
a. systems, procedures, and authorities in the management of Bank Products; b. identification of all risks inherent in Bank Products;
c. methods for measuring and monitoring risks over Bank Products;
d. accounting recording methods for Bank Products; e. analysis of legal aspects of Bank Products; and f. transparency of information to customers in accordance with Financial Services Authority Regulations concerning consumer protection in the financial services sector. (3) Banks are required to apply policies and procedures as referred to in paragraph (2) consistently and continuously. (4) Banks are required to periodically review and update policies and procedures as referred to in paragraph (2). (5) Banks that violate the obligations as referred to in paragraph (1), paragraph (3), and/or paragraph (4) are subject to administrative sanctions in the form of written reprimands. (6) In the event that a Bank has been subject to administrative sanctions in the form of written reprimands as referred to in paragraph (5) and has not yet fulfilled the provisions as referred to in paragraph (1), paragraph (3), and/or paragraph (4), the Bank is subject to administrative sanctions in the form of:
a. suspension of specific Bank Products; b. prohibition on implementing new Bank Products; and/or
c. downgrade of the Bank's health level.

Article 8
In the implementation of Bank Products, Banks must pay attention at least to:
a. customer needs; b. capital adequacy;
c. readiness of supporting infrastructure;
d. readiness of human resources; e. customer education; and f. alignment with applicable regulations.

CHAPTER IV
MECHANISM FOR IMPLEMENTATION OF NEW BANK PRODUCTS

Section One
Implementation of New Basic Bank Products

Article 9
(1) Banks implementing Basic Bank Products as referred to in Article 4 paragraph (1) letter a that meet the criteria as referred to in Article 5 paragraph (3) submit reports on the realization of new Basic Bank Products to the Financial Services Authority. (2) Banks are required to submit the realization report as referred to in paragraph (1) at the latest 5 (five) working days after the implementation of the new Basic Bank Product, accompanied by supporting documents. (3) The process flow for submitting the realization report as referred to in paragraph (1) is listed in Appendix III which is an integral part of this Financial Services Authority Regulation. (4) The format of the realization report and supporting documents as referred to in paragraph (2) is listed in Appendix IV which is an integral part of this Financial Services Authority Regulation. (5) Banks that are late in submitting the report as referred to in paragraph (2) are subject to administrative sanctions in the form of a fine of Rp1,000,000.00 (one million rupiah) per working day of delay per report and at most Rp50,000,000.00 (fifty million rupiah) per report. (6) The imposition of administrative sanctions as referred to in paragraph (5) does not eliminate the obligation to submit reports for Banks that have not yet submitted the report as referred to in paragraph (2). (7) Banks that submit the report as referred to in paragraph (2) but:
a. are assessed as incomplete; and/or b. are not accompanied by documents and material information, according to the specified format, are subject to administrative sanctions in the form of written reprimands. (8) Banks that do not correct the report within the time period specified in the written reprimand as referred to in paragraph (7) are subject to administrative sanctions in the form of a fine of Rp50,000,000.00 (fifty million rupiah).

Section Two
Implementation of New Advanced Bank Products

Article 10
(1) Banks that will implement Advanced Bank Products as referred to in Article 4 paragraph (1) letter b that meet the criteria as referred to in Article 5 paragraph (3) are required to obtain approval from the Financial Services Authority. (2) To obtain approval as referred to in paragraph (1), Banks conduct limited pilot projects. (3) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written reprimands and a fine of Rp100,000,000.00 (one hundred million rupiah) per Bank Product.

Article 11
(1) Banks conduct limited pilot projects in accordance with the RPPB as referred to in Article 5 paragraph (1).
(2) Banks are required to report the plan for implementing limited pilot projects as referred to in paragraph (1) to the Financial Services Authority at the latest 5 (five) working days before the implementation of the limited pilot project. (3) The plan for implementing limited pilot projects as referred to in paragraph (2) must at least contain:
a. the type of new Advanced Bank Product; b. the scope of the limited pilot project;
c. the implementation period;
d. the implementation scenario; and e. a board of directors' statement regarding the Bank's responsibility for risks arising during the implementation of the limited pilot project, signed by the director overseeing the Bank's compliance function and the director responsible for the new Advanced Bank Product to be implemented. (4) Banks determine the scope and scenario of the limited pilot project as referred to in paragraph (3) with regard to at least:
a. alignment with the purpose of implementing the new Advanced Bank Product; and b. the principle of consumer protection.
(5) In addition to paying attention to matters as referred to in paragraph (4), Banks utilizing information technology in limited pilot projects need to pay attention to the principle of prudence in the use of information technology to determine the scope and scenario of the limited pilot project. (6) The content of the board of directors' statement as referred to in paragraph (3) letter e must at least include items 1 to 5 as listed in Appendix IV Roman numeral IV which is an integral part of this Financial Services Authority Regulation. (7) Banks that do not fulfill the obligations as referred to in paragraph (2) are subject to administrative sanctions in the form of written reprimands and a fine of Rp100,000,000.00 (one hundred million rupiah) per Bank Product.

Article 12
(1) Banks submit applications for approval as referred to in Article 10 to the Financial Services Authority after the Bank has completed the entire process of the limited pilot project. (2) Banks submit applications for approval as referred to in paragraph (1) before the implementation of the new Advanced Bank Product, accompanied by complete application documents. (3) The Financial Services Authority grants or rejects the application for approval for the implementation of new Advanced Bank Products at the latest 14 (fourteen) working days after all requirements are fulfilled by the Bank and the application documents are received completely by the Financial Services Authority. (4) The process flow for the application for approval as referred to in paragraph (1) is listed in Appendix III which is an integral part of this Financial Services Authority Regulation. (5) The format of the application for approval and application documents as referred to in paragraph (2) is listed in Appendix IV which is an integral part of this Financial Services Authority Regulation.

Article 13
(1) Based on certain considerations, Banks may submit applications for approval for the implementation of new Advanced Bank Products without going through limited pilot projects as referred to in Article 10 paragraph (2). (2) In the event that the application for approval is submitted without going through limited pilot projects as referred to in paragraph (1), the Bank submits the application for approval for the implementation of new Advanced Bank Products accompanied by complete application documents. (3) The Financial Services Authority grants or rejects the application for approval for the implementation of new Advanced Bank Products at the latest 14 (fourteen) working days after all requirements are fulfilled and application documents are received completely by the Financial Services Authority. (4) The process flow for the application for approval as referred to in paragraph (1) is listed in Appendix III which is an integral part of this Financial Services Authority Regulation. (5) The format of the application for approval and application documents as referred to in paragraph (2) is listed in Appendix IV which is an integral part of this Financial Services Authority Regulation.

Article 14
(1) Banks that will implement new Advanced Bank Products in the form of development of information technology-based Advanced Bank Products as referred to in Article 4 paragraph (3) letter a may be exempted from fulfilling the provisions as referred to in Article 10 paragraph (2), Article 11, Article 12, and Article 13. (2) In the event that the Bank meets the criteria:
a. has a composite risk management application quality assessment with rank 1 (one) or rank 2 (two) based on the latest Bank health level assessment; b. has a good corporate governance factor rating with rank 1 (one) or rank 2 (two) based on the latest Bank health level assessment; and
c. has adequate information technology infrastructure and management of information technology infrastructure,
the exemption as referred to in paragraph (1) may be applied.
(3) Banks are required to submit an application for approval in the form of a notification regarding the plan for implementing new Advanced Bank Products to the Financial Services Authority before the implementation of the new Advanced Bank Product as referred to in paragraph (1), accompanied by complete application documents. (4) In the event that the Financial Services Authority does not submit objections within a period of 10 (ten) working days from the date the application documents are received completely by the Financial Services Authority, the approval for the implementation of new Advanced Bank Products submitted by the Bank as referred to in paragraph (3) becomes effective. (5) In the event that the plan for implementing new Advanced Bank Products submitted meets certain criteria, the Financial Services Authority has the authority to:
a. require the Bank to still fulfill the provisions as referred to in Article 10 paragraph (2), Article 11, and Article 12; b. require the Bank to still fulfill the provisions as referred to in Article 13; or
c. prohibit the implementation of new Advanced Bank Products.
(6) Certain criteria as referred to in paragraph (5) include:
a. non-alignment with applicable regulations; b. have never been implemented by the Bank previously; and/or
c. according to the Financial Services Authority's assessment, have the potential to cause significant risk.
(7) The process flow for the application for approval as referred to in paragraph (3) is listed in Appendix III which is an integral part of this Financial Services Authority Regulation. (8) The format of the application for approval and application documents as referred to in paragraph (3) is listed in Appendix IV which is an integral part of this Financial Services Authority Regulation. (9) Banks that violate the obligations as referred to in paragraph (3) are subject to administrative sanctions in the form of written reprimands and a fine of Rp100,000,000.00 (one hundred million rupiah) per Bank Product.

Section Three
Additional Documents and Time Limits for Implementation of Bank Products After Obtaining Approval

Article 15
In the event that there are additional document requirements for the implementation of new Bank Products regulated specifically in Financial Services Authority Regulations, in addition to referring to document requirements in this Financial Services Authority Regulation, Banks must also submit documents in accordance with Financial Services Authority Regulations.

Article 16
(1) Banks must implement new Advanced Bank Products at the latest 6 (six) months since obtaining approval from the Financial Services Authority.
(2) If the Bank does not implement new Advanced Bank Products within a period of 6 (six) months since obtaining approval from the Financial Services Authority, the Financial Services Authority's approval becomes invalid.

CHAPTER V
TERMINATION OF BANK PRODUCTS

Article 17
(1) Termination of Bank Products is done based on:
a. the initiative of the respective Bank; or b. an order from the Financial Services Authority.
(2) The order for termination of Bank Products as referred to in paragraph (1) letter b is given with the criteria:
a. Bank Products:

have not obtained approval as regulated in this Financial Services Authority Regulation;
do not align with the application for approval or notification of implementation of new Bank Products submitted to the Financial Services Authority;
do not align with the realization report of Bank Products;
do not align with Sharia Principles for Sharia commercial banks and Sharia business units; and/or
do not align with applicable regulations;
b. based on the Financial Services Authority's evaluation, the implementation of Bank Products is assessed or has the potential to:
cause material and/or significant losses to the Bank's financial condition;
significantly increase the Bank's legal or reputational risk due to complaints or lawsuits from customers; and/or
have a negative impact on financial system stability;
c. the Bank does not apply adequate risk management over the implemented Bank Products; and/or
d. there are other considerations.
(3) Termination of Bank Products as referred to in paragraph (1) letter b may be temporary or permanent based on the Financial Services Authority's assessment.

Article 18
(1) Banks ordered to stop the implementation of Bank Products as referred to in Article 17 paragraph (1) letter b are required to:
a. stop offering, selling, and/or new agreements or transactions over Bank Products; b. provide information to customers regarding the termination of Bank Products; and
c. submit an action plan to the Financial Services Authority regarding the termination of Bank Products at the latest 1 (one) month since the Bank was ordered to stop the implementation of Bank Products and implement the action plan.
(2) Banks that violate the obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written reprimands.
(3) In the event that a Bank has been subject to administrative sanctions in the form of written reprimands as referred to in paragraph (2) and has not yet fulfilled the provisions as referred to in paragraph (1), the Bank is subject to administrative sanctions in the form of:
a. prohibition on implementing new Bank Products; and/or b. downgrade of the Bank's health level.

CHAPTER VI
REPORTING

Article 19
(1) Banks are required to submit the RPPB as referred to in Article 5 paragraph (1) or Article 5 paragraph (7) at the latest by the end of November before the planned year of Bank Product implementation. (2) Banks may make changes to the submitted RPPB as referred to in paragraph (1) at most 3 (three) times, at the latest by the end of March, June, and September of the current year. (3) The Financial Services Authority may request Banks to make adjustments to the RPPB as referred to in paragraph (1) and/or paragraph (2). (4) The format of the RPPB as referred to in Article 5 paragraph (1) is listed in Appendix IV which is an integral part of this Financial Services Authority Regulation.

Article 20
(1) Banks submit the RPPB as referred to in Article 19 online through the Financial Services Authority's reporting system for unstructured reports.
(2) The procedure for submitting the RPPB online as referred to in paragraph (1) is carried out in accordance with Financial Services Authority Regulations concerning bank reporting through the Financial Services Authority's reporting system. (3) Submission of the RPPB as referred to in paragraph (1) is done through the Financial Services Authority's electronic system for unstructured reports with the purpose of:
a. the relevant Bank Supervision Department or Financial Services Authority Regional Office in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta province or Banten province; or b. Financial Services Authority Regional Offices or local Financial Services Authority Offices, for Banks headquartered outside the Special Capital Region of Jakarta province or Banten province.

Article 21
(1) Banks are required to submit reports on the realization of new Advanced Bank Products at the latest 5 (five) working days after the new Advanced Bank Product is implemented. (2) The realization report as referred to in paragraph (1) must at least contain information and explanations regarding:
a. the type and name of the new Advanced Bank Product; b. the issuance date of the new Advanced Bank Product; and

c. the consistency between the implementation and the approval of new advanced Bank Products.
(3) The time limit for submitting reports on the implementation of new advanced Bank Products in the form of information technology-based activities as referred to in Article 4 paragraph (3) letter a shall be carried out in accordance with Financial Services Authority Regulations regarding the management of digital banking services by general banks and Financial Services Authority Regulations regarding office-less financial services in the context of inclusive finance. (4) The content of the implementation reports as referred to in paragraph (3) shall be carried out in accordance with Financial Services Authority Regulations regarding the management of digital banking services by general banks and Financial Services Authority regulations regarding office-less financial services in the context of inclusive finance.

Article 22
(1) Banks shall include Bank Products that are discontinued during the current year in the report on the implementation of the discontinuation of Bank Products.
(2) Banks are required to submit reports on the implementation of the discontinuation of Bank Products as referred to in paragraph (1) on a quarterly basis for the positions of March, June, September, and December, no later than the 15th (fifteenth) day of the following month after the end of the reporting month. (3) The format of the report on the implementation of the discontinuation of Bank Products as referred to in paragraph (1) is contained in Appendix IV, which is an integral part of this Financial Services Authority Regulation.

Article 23
(1) Banks submit:
a. requests for approval as referred to in Article 12 paragraph (2) or Article 13 paragraph (2); or b. notifications as referred to in Article 14 paragraph (3); accompanied by a statement letter signed by the Director responsible for the Bank's compliance function and the Director responsible for the Bank Product to be managed. (2) Submission:
a. requests for approval or notifications as referred to in paragraph (1); b. reports on the implementation of new basic Bank Products as referred to in Article 9 paragraph (2);
c. reports on the implementation of new advanced Bank Products as referred to in Article 21 paragraph (1); and
d. reports on the implementation of the discontinuation of Bank Products as referred to in Article 22 paragraph (2), shall be conducted online through the Financial Services Authority's integrated licensing and registration system. (3) In the event that the submission facility as referred to in paragraph (2) is not yet available, submission shall be conducted through the Financial Services Authority's reporting system for unstructured reports to:
a. the relevant Bank Supervision Department or Financial Services Authority Regional Office in Jakarta, for Banks with headquarters in the Jakarta Special Capital Region province or Banten province; or b. the Financial Services Authority Regional Office or the local Financial Services Authority Office, for Banks with headquarters outside the Jakarta Special Capital Region province or Banten province. (4) The format of the statement letter as referred to in paragraph (1) is contained in Appendix IV, which is an integral part of this Financial Services Authority Regulation.

(5) Further regulations regarding the procedures for submitting requests for approval or notifications and the submission of reports as referred to in paragraph (2) shall be established by the Financial Services Authority.

Article 24
(1) In the event of information technology development regarding the plan to manage new advanced Bank Products in the form of information technology-based activities, Banks must adjust the report on the plan for information technology development in accordance with Financial Services Authority Regulations regarding the application of risk management in the use of information technology by general banks. (2) In the event of a need, Banks may make changes to the report on the plan for information technology development as referred to in paragraph (1) at most 3 (three) times, no later than the end of March, June, and September of the current year. (3) The mechanism and procedures for submitting the plan for information technology development and its amendments shall be carried out in accordance with Financial Services Authority Regulations regarding the application of risk management in the use of information technology by general banks.

Article 25
(1) Banks that are late in submitting reports as referred to in Article 19 paragraph (1), Article 21 paragraph (1), and/or Article 22 paragraph (2) shall be subject to administrative sanctions in the form of fines of IDR 1,000,000.00 (one million rupiah) per working day of delay per report and at most IDR 50,000,000.00 (fifty million rupiah) per report. (2) The imposition of administrative sanctions as referred to in paragraph (1) does not eliminate the obligation to submit reports for Banks that have not yet submitted reports as referred to in Article 19 paragraph (1), Article 21 paragraph (1), and/or Article 22 paragraph (2). (3) Banks that submit reports as referred to in Article 19 paragraph (1), Article 21 paragraph (1), and/or Article 22 paragraph (2), but:
a. are assessed as incomplete; and/or b. are not attached with documents and material information, according to the determined format, shall be subject to administrative sanctions in the form of written warnings. (4) Banks that do not correct reports within the time limit specified in the written warning as referred to in paragraph (3) shall be subject to administrative sanctions in the form of fines of IDR 50,000,000.00 (fifty million rupiah).

CHAPTER VII
CONSUMER PROTECTION AND/OR SHARIA PRINCIPLE COMPLIANCE

Article 26
(1) Banks are required to apply consumer protection principles in the management of Bank Products in accordance with regulations concerning consumer protection in the financial services sector. (2) Banks are required to have functions and mechanisms for handling every inquiry and/or complaint from customers that operate 24 (twenty-four) hours a day. (3) The mechanism and procedures for applying consumer protection principles as referred to in paragraph (1) shall be carried out in accordance with regulations concerning consumer protection in the financial services sector.

Article 27
(1) General Islamic Banks and Islamic Business Units are required to apply Sharia Principles in managing Bank Products.
(2) The fulfillment of the application of Sharia Principles as referred to in paragraph (1) must be supported by:
a. Fatwas of the National Sharia Council of the Indonesian Ulema Council that serve as the basis for the management of Bank Products or letters from the National Sharia Council of the Indonesian Ulema Council addressed to the Banks in the event that Fatwas of the National Sharia Council of the Indonesian Ulema Council are not yet available; and b. opinions from the Bank's Sharia Supervisory Board regarding new Bank Products. (3) Opinions from the Bank's Sharia Supervisory Board regarding new Bank Products as referred to in paragraph (2) letter b shall at least:
a. base new Bank Products on Fatwas of the National Sharia Council of the Indonesian Ulema Council; b. ensure the consistency of new Bank Products with Fatwas of the National Sharia Council of the Indonesian Ulema Council, at least covering:

the contracts used and the fulfillment of elements in the contracts used;
the objects of transactions and the purpose of use;
the consistency of the determination of bonuses/profit-sharing ratios/margins/ujrah/fees with the contracts used, including in the event that a review is needed regarding profit-sharing ratios/margins/ujrah for fund disbursement products;
the determination of administrative fees; and
the determination of prizes, penalties/sanctions and/or compensation, discounts, accelerated repayment, and treatment of collateral, if any;
c. standard operating procedures for new Bank Products regarding the fulfillment of Sharia Principles; and
d. the results of reviews regarding the concepts of contracts/agreements/application forms for new Bank Products regarding the fulfillment of Sharia Principles.
(4) The format of opinions from the Bank's Sharia Supervisory Board as referred to in paragraph (3) is contained in Appendix IV, which is an integral part of this Financial Services Authority Regulation.

Article 28
(1) Banks that violate regulations as referred to in Article 26 paragraph (1), Article 26 paragraph (2), and/or Article 27 paragraph (1) shall be subject to administrative sanctions in the form of written warnings. (2) In the event that Banks have been subject to administrative sanctions in the form of written warnings as referred to in paragraph (1) and have not yet fulfilled the regulations as referred to in Article 26 paragraph (1), Article 26 paragraph (2), and/or Article 27 paragraph (1), Banks shall be subject to administrative sanctions in the form of:
a. freezing of specific Bank Products; b. prohibition on managing new Bank Products; and/or
c. reduction of the Bank's health level.

CHAPTER VIII
MECHANISM FOR MANAGING ACTIVITIES CONDUCTED FOR THE BANK'S OWN INTEREST

Article 29
(1) Banks may manage activities conducted by the Bank for the Bank's own interest, not for the customers' interest.
(2) Activities conducted for the Bank's own interest as referred to in paragraph (1) consist of:
a. activities related to the application of risk management; b. activities related to the implementation of fund placement strategies; and/or
c. other activities that support the continuity of the Bank's business.
(3) In the event that there are specific regulations in Financial Services Authority regulations in the banking sector regarding the mechanism for implementing activities as referred to in paragraph (1), the implementation mechanism shall follow the Financial Services Authority regulations. (4) Banks that will manage activities conducted by the Bank for the Bank's own interest that can affect the composition of ownership and/or the Bank's capital are required to submit requests for approval accompanied by complete application documents. (5) The Financial Services Authority grants or rejects requests for approval for the management of activities as referred to in paragraph (4) within a maximum of 14 (fourteen) working days after all requirements are met and application documents are received completely by the Financial Services Authority. (6) Banks that do not fulfill obligations as referred to in paragraph (4) shall be subject to administrative sanctions in the form of written warnings and fines of IDR 100,000,000.00 (one hundred million rupiah) per Bank activity.

Article 30
(1) Activities conducted by the Bank for the Bank's own interest other than those referred to in Article 29 paragraph (3) and/or Article 29 paragraph (4) must be reported when the Bank first conducts such activities, no later than 5 (five) working days after implementation. (2) Banks that are late in submitting reports as referred to in paragraph (1) shall be subject to administrative sanctions in the form of fines of IDR 1,000,000.00 (one million rupiah) per working day of delay per report and at most IDR 50,000,000.00 (fifty million rupiah) per report. (3) Banks that submit reports as referred to in paragraph (1) but:
a. are assessed as incomplete; and/or b. are not attached with documents and material information, according to the determined format, shall be subject to administrative sanctions in the form of written warnings. (4) Banks that do not correct reports within the time limit specified in the written warning as referred to in paragraph (3) shall be subject to administrative sanctions in the form of fines of IDR 50,000,000.00 (fifty million rupiah).

Article 31
(1) Requests for approval as referred to in Article 29 paragraph (4) or reports for activities conducted by the Bank for the Bank's own interest as referred to in Article 30 paragraph (1) shall be submitted online through the Financial Services Authority's integrated licensing and registration system. (2) In the event that the submission facility for requests for approval as referred to in paragraph (1) is not yet available, submission shall be conducted through the Financial Services Authority's electronic system for unstructured reports to:
a. the relevant Bank Supervision Department or Financial Services Authority Regional Office in Jakarta, for Banks with headquarters in the Jakarta Special Capital Region province or Banten province; or b. the Financial Services Authority Regional Office or the local Financial Services Authority Office, for Banks with headquarters outside the Jakarta Special Capital Region province or Banten province. (3) The format and documents for requests for approval or reports on activities conducted by the Bank for the Bank's own interest as referred to in Article 29 paragraph (4) or Article 30 paragraph (1) are contained in Appendix IV, which is an integral part of this Financial Services Authority Regulation. (4) Further regulations regarding the procedures for requesting approval or submitting reports for activities conducted by the Bank for the Bank's own interest as referred to in paragraph (1) shall be established by the Financial Services Authority.

CHAPTER IX
OTHER PROVISIONS

Article 32
Banks submit the strategic plan for the management of Bank Products in the Bank's Business Plan with coverage in accordance with Financial Services Authority Regulations regarding bank business plans.

CHAPTER X
TRANSITIONAL PROVISIONS

Article 33
Upon the implementation of this Financial Services Authority Regulation:

Regarding the process of managing new basic Bank Products or new advanced Bank Products that are being applied before the implementation of this Financial Services Authority Regulation, the process of managing new basic Bank Products or new advanced Bank Products shall continue to be carried out in accordance with the regulations on the management of Bank Products contained in previous Financial Services Authority Regulations.
Procedures for managing new Bank Products shall refer to this Financial Services Authority Regulation.

Article 34
Banks submit the first New Basic Bank Product (NBBP) simultaneously with the submission of the 2022 Bank Business Plan.

CHAPTER XI
CLOSING PROVISIONS

Article 35
Upon the implementation of this Financial Services Authority Regulation:
a. Financial Services Authority Regulations regulating the management of Bank Products regulated specifically and their implementing regulations; and b. Financial Services Authority Regulation Number 24/POJK.03/2015 concerning Products and Activities of Islamic Banks and Islamic Business Units (State Gazette of the Republic of Indonesia Year 2015 Number 289, Supplement to the State Gazette of the Republic of Indonesia Number 5771); shall remain in force insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 36
Upon the implementation of this Financial Services Authority Regulation, Article 30 paragraph (3) and paragraph (4) of Financial Services Authority Regulation Number 38/POJK.03/2016 concerning the Application of Risk Management in the Use of Information Technology by General Banks (State Gazette of the Republic of Indonesia Year 2016 Number 267, Supplement to the State Gazette of the Republic of Indonesia Number 5963) insofar as it relates to changes to reports on plans for information technology development regarding the management of new advanced Bank Products in the form of information technology-based activities, are declared repealed and invalid.

Article 37
Upon the implementation of this Financial Services Authority Regulation:
a. Article 16 in Financial Services Authority Regulation Number 5/POJK.03/2016 concerning Bank Business Plans (State Gazette of the Republic of Indonesia Year 2016 Number 17, Supplement to the State Gazette of the Republic of Indonesia Number 5841); b. Article 33 in Financial Services Authority Regulation Number 16/POJK.03/2017 concerning Banking Intermediaries (State Gazette of the Republic of Indonesia Year 2016 Number 66, Supplement to the State Gazette of the Republic of Indonesia Number 6040);
c. Article 20, Article 21, Article 22, and Article 24 in Financial Services Authority Regulation Number 18/POJK.03/2016 concerning the Application of Risk Management for General Banks (State Gazette of the Republic of Indonesia Year 2016 Number 53, Supplement to the State Gazette of the Republic of Indonesia Number 5861);
d. Bank Indonesia Regulation Number 9/19/PBI/2007 concerning the Implementation of Sharia Principles in Fund Collection and Disbursement Activities and Islamic Banking Services (State Gazette of the Republic of Indonesia Year 2007 Number 165 DPbS, Supplement to the State Gazette of the Republic of Indonesia Number 4793) as amended by Bank Indonesia Regulation Number 10/16/PBI/2008 concerning Amendments to Bank Indonesia Regulation Number 9/19/PBI/2007 concerning the Implementation of Sharia Principles in Fund Collection and Disbursement Activities and Islamic Banking Services (State Gazette of the Republic of Indonesia Year 2008 Number 136 DPbS, Supplement to the State Gazette of the Republic of Indonesia Number 4896) and external implementation regulations; and e. Financial Services Authority Circular Letter Number 36/SEOJK.03/2015 concerning Products and Activities of General Islamic Banks and Islamic Business Units, are repealed and declared invalid.

Article 38
This Financial Services Authority Regulation shall come into force 3 (three) months after the date of enactment.

To ensure that everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 30 July 2021

CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, sd
WIMBOH SANTOSO

Enacted in Jakarta on 30 July 2021

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA sd
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 164

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 /POJK.03/2021
CONCERNING
MANAGEMENT OF GENERAL BANK PRODUCTS

I. GENERAL

The development of information technology has become one of the driving forces of change for business in almost all industries, including the banking industry in Indonesia. With the rapid development of information technology, the behavior and perspective of society in using financial services have also shifted. Society demands services that meet their needs easily, quickly, and safely. The development of information technology has also driven the emergence of new industries such as financial technology, which offers financial services by utilizing information technology in businesses similar to Banks, including payment services and credit or financing disbursement. The existence of financial technology has made the competitive space in the financial services industry increasingly tight, and ultimately, for Banks not to be abandoned by customers, Banks must immediately improve themselves so that they can provide services to society quickly when needed.

To maintain its existence, Banks must continuously improve service quality by transforming services. This is necessary given the high variety of societal needs, so Banks are required to be able to respond to needs quickly, so that Bank services are targeted correctly. To realize this, Bank transformation must be accompanied by changes in the Bank's business model in generating Bank Product innovations. Therefore, regulations regarding the management of Bank Products, which were previously linked to the Bank's core capital, need to be adjusted to a customer-needs-oriented approach while still considering capital adequacy and risk management.

On the other hand, efforts to accelerate the management of Bank Products also need to be supported by a faster licensing process. To realize this, in addition to strengthening supervision, there is also a need for strengthening on the part of Banks in managing risks over the entire process in managing Bank Products while still considering customer protection aspects.

In the management of Bank Products, the Financial Services Authority then opens wider space for the banking industry to innovate quickly according to societal needs through a more transparent and fast licensing mechanism. With the opening of innovation space, Banks can then conduct trials before Bank Products are launched, with responsibility remaining with the Banks.

With the issuance of this Financial Services Authority Regulation, the banking industry in Indonesia is expected to have higher competitiveness, both at the national and global levels. This increase in competitiveness is also accompanied by an increase in Bank responsibility for the management of Bank Products, so that every innovation of Bank Products can be accounted for (responsible innovation).

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Paragraph (1)
The application of effective risk management is implemented in accordance with Financial Services Authority Regulations regarding the application of risk management for general banks or Financial Services Authority Regulations regarding the application of risk management for general Islamic banks and Islamic business units.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Article 3
What is meant by "convergence in the management of Bank Products" is a condition where every party, function, or process in the management of Bank Products is well coordinated so that the management of Bank Products can be accounted for.

Article 4
Paragraph (1)
Letter a
Clear enough.

Letter b
Advanced Bank Products are Bank Products other than Basic Bank Products.

Paragraph (2)
Letter a
Basic Bank Products related to fund collection activities include, among others, checking accounts, savings accounts, and deposits.

Letter b
Basic Bank Products related to fund disbursement activities include, among others, loans or financing, factoring, provision of guarantees, and trade financing.

Letter c
Basic Bank Products related to simple activities include, among others, fund transfers, electronic money, digital financial services, card-based payment instruments, traveller’s cheques, cash management, safe deposit boxes, foreign currency paper money trading, simple or standard (plain vanilla) derivative transactions, government securities sales agents, bancassurance reference business models, and premium customer services.

Paragraph (3)
Letter a
Information technology-based Bank Products include, among others, electronic banking services, digital banking services, and office-less financial services in the context of inclusive finance.

Letter b
Bank Products related to the management of activities or products of financial services institutions other than banks include, among others, bancassurance distribution business models, bancassurance integration business models, custodians, trustees, mutual fund sales agents, securities broker agents, and debt and sukuk broker agents.

Letter c
Bank Products that require approval or licensing from other authorities include, among others, clearing organizers and settlement organizers.

Letter d
Complex Bank Products are Advanced Bank Products that are not included in Bank Products in letters a, b, and c, including, among others, complex derivative transactions, structured products, and trusts.

Paragraph (4)
Clear enough.

Paragraph (5)
Criteria for determining Advanced Bank Products as Basic Bank Products include, among others, the risk level of the Bank Products.

Article 5
Paragraph (1)
NBBP (New Basic Bank Product) is the basis for Banks in carrying out the process of managing new Bank Products.

Paragraph (2)
Clearly stated.
Paragraph (3)
Letter a
Included in the criteria of never previously implemented are Bank Products that have been implemented by other Banks but have never been implemented by the Bank in question. Included in the criteria of never previously implemented by a Sharia business unit are Bank Products that have been implemented by conventional general banks that have a Sharia business unit but have never been implemented by the Sharia business unit. Letter b Included in development are combinations or variations of Bank Products. Material changes may include matters that substantively change the quality or risk characteristics underlying the existing Bank Product. Paragraph (4) The mechanism for measuring or assessing the materiality of increased risk exposure is used by the Bank in determining whether the planned Bank Product is included in the New Bank Product category. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated. Paragraph (7) Clearly stated.
Article 6
The implementation of risk management, governance, and internal control is carried out in accordance with, among others:
a. Financial Services Authority Regulations regarding the implementation of risk management for general banks; b. Financial Services Authority Regulations regarding the implementation of risk management for Sharia general banks and Sharia business units;
c. Financial Services Authority Regulations regarding the implementation of governance for general banks; and/or
d. provisions of legislation regarding the implementation of good corporate governance for Sharia general banks and Sharia business units.
Article 7
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Review and updating of policies and procedures are conducted by considering changes in the Bank's internal and external conditions.
Paragraph (5)
Clearly stated.
Paragraph (6)
Clearly stated.
Article 8
Matters that the Bank needs to pay attention to in the implementation of Bank Products start from planning to implementation.
Letter a
The implementation of Bank Products is based on customer needs that must be met and can provide added value to customers.
Letter b
Capital adequacy is not intended to limit the implementation of Bank Products by linking it to specific capital, but this is necessary to absorb risks that may arise from the implementation of Bank Products. Letter c The Bank ensures, among others, the adequacy and security of information technology systems and infrastructure required to support the implementation of Bank Products. Letter d The Bank ensures that employees involved in the process of implementing Bank Products understand the Bank's policies and procedures, have appropriate competence, and have a good understanding of the Bank Product, including its risks. Letter e The Bank ensures that prospective customers or customers obtain information regarding Bank Products, Bank Product risks, and the rights and obligations of prospective customers or customers. Letter f Legislation provisions include, among others:

requirements for general banks to conduct business in foreign currency;
specific products, services, and/or services regulated specifically;
implementation of anti-money laundering and counter-terrorism financing programs in the financial services sector; and
implementation of risk management in the use of information technology by general banks.
Article 9
Clearly stated.
Article 10
Paragraph (1)
Clearly stated.
Paragraph (2)
Limited pilot projects (piloting review) are a means used by the Bank to carry out a series of activities in preparing for the implementation of new advanced Bank Products that are in accordance with customer needs. In this limited pilot project, the Financial Services Authority plays an active role in conducting evaluations and providing recommendations regarding the implementation of the Bank's limited pilot project (proof of concept). The active role of the Financial Services Authority aims to prove that the concept of the new advanced Bank Product being tested is feasible for implementation. This active role is carried out to ensure that the limited pilot project conducted is in accordance with the RPPB and that the new advanced Bank Product is ready for implementation. Evaluations and recommendations by the Financial Services Authority include, among others, the scope of the test, the Bank's infrastructure and resource readiness, obstacles faced, problem findings, risk mitigation steps taken, and problem resolution. The Bank follows up on the recommendations provided by the Financial Services Authority during the evaluation of the implementation of the limited pilot project. Paragraph (3) Clearly stated.
Article 11
Paragraph (1)
In limited pilot projects, the Bank must ensure that customers and/or prospective customers know that the new advanced Bank Product used is a new advanced Bank Product that is being tested and has not yet received approval from the Financial Services Authority. Paragraph (2) Clearly stated. Paragraph (3) Letter a Clearly stated. Letter b The scope of the limited pilot project includes, among others, target users, test location or area, and transaction limits. Letter c Clearly stated. Letter d Clearly stated. Letter e Clearly stated. Paragraph (4) The determination of the scope and scenario of the limited pilot project aims to allow the Bank to estimate risks that may arise, particularly regarding the Bank's operational and reputational risks. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated. Paragraph (7) Clearly stated.
Article 12
Paragraph (1)
Included in the limited pilot project process are proof of concept activities for the implementation of the limited pilot project.
Paragraph (2)
Included in the application documents for permission with a limited pilot project are additional documents requested by the Financial Services Authority during the implementation of the limited pilot project. Examples:
a. agreement documents between customers and the Bank regarding the implementation of the limited pilot project; and b. analysis and identification of cyber risks from the risk management work unit regarding the new advanced Bank Product being tested in limited pilot projects. Paragraph (3) Application documents are received completely, including the quantity and content of documents in accordance with requirements. Paragraph (4) Clearly stated. Paragraph (5) Clearly stated.
Article 13
Paragraph (1)
Certain considerations include:
a. New advanced Bank Products related to the implementation of activities or products of financial service institutions other than banks and which must obtain prior approval from the relevant authority for the said activity; b. New advanced Bank Products are products, services, and/or services for the implementation of government programs; and/or
c. The Bank can prove that the implementation of new advanced Bank Products does not require a limited pilot project process.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Article 14
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
The assessment of the quality rating of risk management implementation used is the result of an assessment by the Financial Services Authority in accordance with Financial Services Authority Regulations regarding the implementation of risk management for general banks or Financial Services Authority Regulations regarding the implementation of risk management for Sharia general banks and Sharia business units. Letter b The assessment of the good corporate governance factor rating used is the result of an assessment by the Financial Services Authority in accordance with Financial Services Authority Regulations regarding the implementation of governance for general banks or provisions of legislation regarding good corporate governance for Sharia general banks and Sharia business units. Letter c Adequate information technology infrastructure and information technology infrastructure management means that information technology infrastructure and information technology infrastructure management have met Financial Services Authority Regulations regarding the implementation of risk management in the use of information technology by general banks. Paragraph (3) Clearly stated. Paragraph (4) The effectiveness of permission within a period of 10 (ten) working days (instant approval) is a form of licensing incentive from the Financial Services Authority for Banks that meet the established requirements. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated. Paragraph (7) Clearly stated. Paragraph (8) Clearly stated. Paragraph (9) Clearly stated.
Article 15
Examples of additional document requirements that must be submitted as regulated in Financial Services Authority Regulations regarding the implementation of digital banking services by general banks include, among others:
a. descriptions of the cooperation mechanism carried out with Bank partners in the implementation of digital banking services by general banks; and b. results of independent examinations that provide opinions on product characteristics and the adequacy of information technology system security related to the implementation of digital banking services by general banks.
Article 16
Clearly stated.
Article 17
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
Clearly stated.
Letter b
Number 1)
Conditions that have the potential to cause material and/or significant losses to the Bank's financial condition include, among others, reputational risk and market risk from the implementation of Bank Products. Number 2) Clearly stated. Number 3) Clearly stated. Letter c Clearly stated. Letter d Other considerations include, among others, the potential for obstacles in the supervision process by the Financial Services Authority. Paragraph (3) Clearly stated.
Article 18
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Action plans include, among others:

settlement of obligations to Bank customers;
improvement of Bank Products; and
other necessary actions.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Article 19
Paragraph (1)
Clearly stated.
Paragraph (2)
Changes to the RPPB still need to pay attention to consistency with the Bank's Business Plan in accordance with Financial Services Authority Regulations regarding bank business plans that have been submitted to the Financial Services Authority. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated.
Article 20
Clearly stated.
Article 21
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Example:
On December 1, 2021, EMH Bank implemented a new digital banking service. Based on Financial Services Authority Regulations regarding the implementation of digital banking services for general banks, the submission of the realization report for digital banking services is 3 (three) months after implementation. Thus, the deadline for submitting the realization report for the implementation of the new digital banking service for EMH Bank is not December 8, 2021, but March 1, 2022. Paragraph (4) Clearly stated.
Article 22
Paragraph (1)
Clearly stated.
Paragraph (2)
Realization reports for the cessation of Bank Products are only submitted if the Bank has Bank Products that were ceased during a specific quarter period.
The realization report for the cessation of Bank Products is a report separate from the realization report of the Bank's Business Plan, but its submission is carried out at the same time. Paragraph (3) Clearly stated.
Article 23
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
The meaning that the submission medium is not yet available includes cases where electronic systems are available but cannot yet receive applications for permission, notifications, realization reports for new basic Bank Products, realization reports for new advanced Bank Products, and/or realization reports for the cessation of Bank Products. Paragraph (4) Clearly stated. Paragraph (5) Clearly stated.
Article 24
Clearly stated.
Article 25
Clearly stated.
Article 26
Paragraph (1)
Clearly stated.
Paragraph (2)
The function and mechanism of each customer question and/or complaint can be facilitated through media such as telephone, email, automated answering machines, and written documents. Paragraph (3) Clearly stated.
Article 27
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
Clearly stated.
Letter b
The opinion of the Bank's Sharia Supervisory Board is an opinion that refers, among others, to fatwas of the National Sharia Council of the Indonesian Ulema Council and regulations governing the implementation of Sharia principles in the business activities of Sharia general banks and Sharia business units. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated.
Article 28
Clearly stated.
Article 29
Paragraph (1)
Clearly stated.
Paragraph (2)
Examples of activities carried out for the Bank's own interests:
a. asset securitization; b. derivative transactions for the Bank's interest;
c. loans received;
d. purchase or sale of securities; e. placement at Bank Indonesia; f. placement at other banks; g. issuance of debt securities; and/or h. capital participation.
Paragraph (3)
Example:
IRM Bank intending to carry out asset securitization in accordance with Financial Services Authority Regulations regarding prudence principles in asset securitization activities for general banks can be done after IRM Bank obtains approval from the Financial Services Authority.
AMT Bank intending to carry out capital participation in accordance with Financial Services Authority Regulations regarding prudence principles in capital participation activities can be done after AMT Bank obtains approval from the Financial Services Authority.
Paragraph (4)
Examples of activities carried out by the Bank for its own interest that can affect the Bank's ownership composition and/or capital include, among others, the issuance of debt securities. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated.
Article 30
Paragraph (1)
Examples of activities:
a. loans received; b. purchase or sale of securities;
c. placement at Bank Indonesia; or
d. placement at other banks.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Article 31
Clearly stated.
Article 32
Clearly stated.
Article 33
Examples of regulations regarding the implementation of Bank Products include, among others:
a. Financial Services Authority Regulations regarding general bank business activities based on core capital; b. Financial Services Authority Regulations regarding the implementation of risk management for general banks or Financial Services Authority Regulations regarding the implementation of risk management for Sharia general banks and Sharia business units;
c. Financial Services Authority Regulations regarding products and activities of Sharia banks and Sharia business units;
d. Financial Services Authority Regulations regarding the implementation of digital banking services by general banks; and e. Financial Services Authority Regulations regarding general bank business activities involving custody with management (trust).
Examples:
a. The procedure for applying for permission for trust activities as a new Bank Product before this Financial Services Authority Regulation takes effect is carried out in accordance with Financial Services Authority Regulations regarding general bank business activities involving custody with management (trust) with a licensing stage consisting of principle approval and confirmation letters. When this Financial Services Authority Regulation takes effect, the procedure for implementing trust activities as a new Bank Product refers to the mechanism for implementing new Bank Products regulated in this Financial Services Authority Regulation. b. The procedure for applying for permission for premium customer services as a new Bank Product before this Financial Services Authority Regulation takes effect is carried out in accordance with Financial Services Authority Regulations regarding the implementation of risk management on general banks providing premium customer services which require prior approval. When this Financial Services Authority Regulation takes effect, the procedure for implementing premium customer services as a new Bank Product refers to the mechanism for implementing new Bank Products regulated in this Financial Services Authority Regulation.
Article 34
The RPPB and the 2022 Bank Business Plan are submitted simultaneously to the Financial Services Authority no later than November 2021.
Article 35
Letter a
Financial Services Authority Regulations governing the implementation of Bank Products that are regulated specifically include, among others, Financial Services Authority Regulations regarding:
implementation of digital banking services for general banks;
implementation of risk management on general banks providing premium customer services; and
general bank business activities involving custody with management (trust).
Letter b
Clearly stated.
Article 36
Clearly stated.
Article 37
Clearly stated.
Article 38
Clearly stated.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6701

APPENDIX I
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 13 /POJK.03/2021
REGARDING
IMPLEMENTATION OF GENERAL BANK PRODUCTS

BASIC BANK PRODUCTS OF CONVENTIONAL GENERAL BANKS

I. Basic Bank Products that are Fund Mobilization Activities
No. Bank Product Definition or General Characteristics

Checking Account A type of deposit product where funds can be withdrawn at any time using checks, giro orders, and/or other payment order instruments or through book transfers.
Savings A type of deposit product where withdrawals can only be made according to terms agreed upon between the Bank and the customer, but cannot be withdrawn using checks, giro orders, and/or instruments equivalent to them.
Time Deposits A type of deposit product where withdrawals can only be made at specific times in accordance with agreements between the Bank and the customer, including, among others, fixed-term deposits, on-call deposits, and certificates of deposit (Negotiable Certificate Deposit/NCD).

II. Basic Bank Products that are Fund Disbursement Activities
No. Bank Product Definition or General Characteristics

Credit Provision of money or claims that can be equated with it, based on loan-borrowing agreements or consensus between the Bank and other parties, which obligates the borrower to repay their debt after a certain period with the provision of interest.
Factoring Financing in the form of purchase and/or transfer and management of short-term receivables or claims of a company arising from domestic or foreign trade transactions.
Provision of Guarantees Provision of guarantees by the Bank, including, among others, bank guarantees, standby letters of credit (SBLC), and Domestic Documentary Letters of Credit (SKBDN).
Bank guarantees are written commitments given by the Bank to the guarantee recipient that the Bank will pay a certain amount of money to them at a specific time if the guaranteed party cannot fulfill their obligations. SBLC is a written, irrevocable promise by the Bank issued at the request of the customer or guaranteed party (applicant) to pay the guarantee recipient (beneficiary) in Rupiah or foreign currency, if the documents submitted comply with the document requirements stated in the SBLC. SBLC is issued as a guarantee and can only be drawn upon if the customer or guaranteed party (applicant) fails to fulfill their obligations (breach of contract) and the beneficiary makes a claim.
Trade Financing Provision of financing facilities for trade transactions, including, among others, in the form of Domestic Documentary Letters of Credit (SKBDN) and Letters of Credit (L/C).
SKBDN is a written promise based on the customer's or guaranteed party's (applicant) written request that binds the issuing bank to:
a. make payments to the recipient (beneficiary), or accept and pay bills of exchange drawn by the recipient (beneficiary); b. authorize other banks to make payments to the recipient (beneficiary), or accept and pay bills of exchange drawn by the recipient (beneficiary); or
c. authorize other banks to negotiate bills of exchange drawn by the recipient (beneficiary) upon presentation of documents, provided the SKBDN is fulfilled.
Provision of financing facilities by the Bank to customers for export-import transactions can be carried out with or without using L/C.
Provision of financing facilities by the Bank to customers for export-import transactions using L/C is a payment promise from the issuing bank to the recipient if the recipient submits documents in accordance with L/C requirements to the issuing bank. Provision of financing facilities by the Bank to customers for export-import without L/C, among others, through advance payment, open account, collection, or consignment.

III. Basic Bank Products that are Other Simple Activities
No. Bank Product Definition and General Characteristics

Foreign Currency Paper Money (Bank Notes) Sale or purchase of foreign currency paper money.
Foreign currency paper money is paper money in foreign currency officially issued by a country outside Indonesia that is recognized as legal tender of the respective country.
Plain Vanilla Derivative Transactions
Plain vanilla derivative transactions are financial instruments whose transactions are based on the value of underlying financial assets and are generally carried out for speculation, trading, or hedging. Derivatives included as plain vanilla are forward contracts, future contracts, options, and swaps that generally have only 1 (one) underlying asset and are issued with simple or standard maturity, strike-price, and/or payment (pay-off) features.
Government Securities (SBN) Sales Agent
The Bank as a sales agent for SBN to its customers, including the sale of Government Bonds (SUN).
Fund Transfer
Banks that carry out fund transfer activities are activities that start with an order from the originator sender aimed at transferring a certain amount of funds to the recipient specified in the fund transfer order until the funds are received by the recipient.
Card-Based Payment Instruments (APMK)
Banks that carry out APMK activities include credit cards, Automated Teller Machine (ATM) cards, and/or debit cards.
Included in the implementation of basic APMK are Banks as issuers and/or acquirers.
Electronic Money
Providers of payment instruments that meet the following elements:

issued based on the value of money deposited in advance to the issuer;
the value of money is stored electronically in a media such as a server or chip;
used as a payment instrument to merchants who are not the issuer of the electronic money; and
the value of electronic money managed by the issuer is not a deposit as referred to in banking laws.

Digital Financial Services
Payment system and financial service services carried out by Banks that issue electronic money through cooperation with third parties and using mobile-based and web-based technology tools and devices for inclusive finance.
Safe Deposit Box
Rental services for storage boxes for assets or securities in the Bank's vault.
Traveller’s Cheque
Issuance of traveller’s cheques in foreign currency that can be used as a payment instrument. Banks that can issue traveller’s cheques are Banks that have...

No. Bank Product Definition and General Characteristics obtains permission to conduct business activities in foreign currency.
10. Cash Management
Services or cash management services provided to customers who have deposits at the Bank, where each transaction is carried out based on the customer's order.
In this case, the Bank is only permitted to act as the paying party (paying agent) based on the customer's order and is not permitted to act as an investment agent (investment agent) for customer funds, both conventionally and/or based on Sharia principles. Examples of permitted cash management services or services include debiting or transferring customer accounts for bill payments or obligations, transferring or transferring funds from one account to another account owned by the customer, consolidating (pooling) or distributing funds from branch offices or corporate operational networks, and payroll services for employees (payroll).
11. Premium Customer Services
Services or services related to products and/or activities with certain privileges for premium customers.
12. Marketing cooperation
Insurance products
(bancassurance)
Business Model
Reference
Bancassurance reference business model is a marketing cooperation for insurance products, with the Bank playing a role only in referring or recommending an insurance product to customers.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja
No. Bank Product Definition and General Characteristics The Bank's role in marketing is limited as an intermediary in forwarding insurance product information from the Bank's partner insurance company to customers or providing access to the insurance company to offer insurance products to customers. Established in Jakarta on July 30, 2021 CHAIRMAN OF THE COMMISSIONERS FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed WIMBOH SANTOSO

APPENDIX II
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 /POJK.03/2021
ABOUT
MANAGEMENT OF GENERAL BANK PRODUCTS
I. Basic Bank Products that are Fund Collection Activities
No. Bank Product Definition or General Characteristics

Giro Definition:
Deposits based on Wadiah contract or deposits based on Mudarabah contract or investment of funds based on Mudarabah contract, which can be withdrawn at any time using checks, giro slips, other payment order instruments, or with transfer orders. Giro can have virtual account features, escrow accounts, Islamic Financial Institutions receiving Waqf money (LKS PWU)/Bank receiving Hajj service cost deposits (BPS BPIH)/Bank Receiving Hajj Travel Cost Deposits (BPS Bipih)/Hajj Cash, Lender Funds Account (RDL) and Customer Funds Account (RDN). Contract:
a. Wadiah. b. Mutlaq Mudarabah.
Requirements:
a. Wadiah Giro

The Bank acts as the recipient of the deposit and the customer acts as the depositor of the deposit funds.
The Bank can manage or use customer deposit funds.
The Bank is not permitted to promise the provision of remuneration or bonuses to customers. However, the Bank based on internal policy and without agreement can provide remuneration/bonuses to customers.
The Bank guarantees the return of customer deposit funds.
Wadiah Giro is guaranteed by the Deposit Insurance Agency (LPS).
b. Mutlaq Mudarabah Giro
The Bank acts as the fund manager and the customer acts as the fund owner.
The Bank is not limited to using customer funds in fund disbursement activities as long as it does not conflict with Sharia Principles.
The Bank and customers state the distribution of profits in the form of a mutually agreed nisbah and are recorded in the account opening contract.
In the event that account opening is carried out through an online mechanism, the terms and conditions of the nisbah agreement, are recorded in a form appropriate to the media of the account opening mentioned.
The Bank is not permitted to reduce customer profit nisbah without customer approval. Customer approval can be done in writing or in the form of negative confirmation of the Bank's planned change in nisbah.
Savings mudarabah giro whose risk is borne by the Bank, is guaranteed by the Deposit Insurance Agency (LPS).
Investment mudarabah giro whose risk is borne by the customer, is not guaranteed by LPS.
Characteristics:
a. The Bank can charge account administration fees in the form of fees directly related to account management costs, including transaction and account balance report printing costs, opening costs, and account closure costs. b. The Bank can deduct zakat, infak, waqf, sedekah and other social funds on remuneration or bonuses received by customers as requested by customers in the account opening agreement for giro.
c. The Bank can add Sharia insurance coverage features for individual giro by following applicable regulations.
d. The Bank can provide promotional prizes by meeting the following requirements:
promotional prizes are not agreed upon, do not lead to hidden riba practices and/or do not become customary (habitual).
promotional prizes must be in the form of goods, vouchers, electronic money, gold and/or services (not in the form of money) in accordance with regulations in fatwa.
in the event that prizes are in the form of goods, promotional prizes given must be tangible objects, whether physical or legal form and halal.
In the event that giro uses Wadiah contract, promotional prizes are given before the Wadiah contract occurs.
National Sharia Council Fatwa:
a. DSN-MUI Fatwa Number 01/DSN-MUI/IV/2000 regarding Giro. b. DSN-MUI Fatwa Number 86/DSN-MUI/XII/2012 regarding Prizes in Fund Collection by Islamic Financial Institutions.
c. DSN-MUI Fatwa Number 100/DSN-MUI/XII/2015 regarding Guidelines for Multi-Utility Voucher Sharia Transactions
d. DSN-MUI Fatwa Number 74/DSN-MUI/I/2009 regarding Sharia Guarantee.

Savings Definition
Deposits based on Wadiah contract or deposits based on Mudarabah contract or investment of funds based on Mudarabah contract, which can only be withdrawn according to certain agreed terms and conditions, but cannot be withdrawn using checks, giro slips, and/or other instruments equated with them. Savings can have virtual account features, escrow accounts, LKS PWU, BPS BPIH/BPS Bipih/Hajj Cash, payment point, RDL, and RDN. Contract:
a. Wadiah. b. Mutlaq Mudarabah.
Requirements:
a. Wadiah

The Bank acts as the recipient of the deposit funds and the customer acts as the depositor of the funds.
The Bank can manage or use customer deposit funds.
The Bank is not permitted to promise the provision of remuneration or bonuses to customers. However, the Bank based on internal policy and without agreement can provide remuneration/bonuses to customers
The Bank guarantees the return of customer deposit funds.
Wadiah savings are guaranteed by LPS.
b. Mutlaq Mudarabah
The Bank acts as the fund manager and the customer acts as the fund owner.
The Bank is not limited to using customer funds in fund disbursement activities as long as it does not conflict with Sharia Principles.
The Bank and customers carry out profit distribution in the form of a mutually agreed nisbah and are recorded in the account opening contract.
In the event that account opening is carried out through an online mechanism, the terms and conditions of the contract including the agreement of nisbah, and/or beneficial owner are recorded in a form appropriate to the media of the account opening mentioned.
The Bank is not permitted to reduce customer profit nisbah without customer approval. Customer approval can be done in writing or in the form of negative confirmation of the Bank's planned change in nisbah.
Mutlaq Mudarabah savings risk is borne by the Bank so it is guaranteed by LPS.
Mutlaq Mudarabah investment savings risk is borne by the customer, so it is not guaranteed by LPS.

Characteristics:
a. The Bank can charge account administration fees in the form of fees directly related to account management costs, including transaction and account balance report printing costs, opening costs, and account closure costs. b. The Bank can deduct zakat, infak, waqf, sedekah and other social funds on profit sharing received by customers as requested by customers in the account opening agreement for savings.
c. The Bank can add Sharia insurance coverage features for savings by following applicable regulations.
d. The Bank can provide promotional prizes by meeting the following requirements:

not agreed upon, do not lead to hidden riba practices and/or do not become customary (habitual).
must be in the form of goods, vouchers, electronic money, gold and/or services (not in the form of money) in accordance with regulations in fatwa.
in the event that prizes are in the form of goods, promotional prizes given must be tangible objects, whether physical or legal form and halal.
In the event that savings use Wadiah contract,

promotional prizes are given before the Wadiah contract occurs.
National Sharia Council Fatwa:
a. DSN-MUI Fatwa Number 02/DSN-MUI/IV/2000 regarding Savings. b. DSN-MUI Fatwa Number 86/DSN-MUI/XII/2012 regarding Prizes in Fund Collection by Islamic Financial Institutions.
c. DSN-MUI Fatwa Number 100/DSN-MUI/XII/2015 Regarding Guidelines for Multi-Utility Voucher Sharia Transactions.
d. DSN-MUI Fatwa Number 74/DSN-MUI/I/2009 Regarding Sharia Guarantee.
3. Deposits Definition:
Deposits based on Mudarabah contract or investment of funds based on Mudarabah contract, which can only be withdrawn at a specific time based on a contract between the customer depositor and the Bank. Deposits can have virtual account features, escrow accounts, LKS PWU, BPS BPIH/BPS Bipih/Hajj Cash, payment point, Waqf Deposits, Lender Funds Account (RDL) and Customer Funds Account (RDN). Contract:
Mutlaq Mudarabah.
Requirements:
a. The Bank acts as the fund manager and the customer acts as the fund owner.

b. The Bank and customers carry out profit distribution in the form of a mutually agreed nisbah and are recorded in the account opening contract.
c. In the event that account opening is carried out through an online mechanism, the terms and conditions of the contract including the agreement of nisbah, and/or beneficial owner are recorded in a form appropriate to the media of the account opening mentioned.
d. The Bank is not permitted to reduce customer profit nisbah without customer approval. Customer approval can be done in writing or in the form of negative confirmation of the Bank's planned change in nisbah. e. The Bank and customers record agreements on the opening and use of deposit products in the form of written agreements and can also be done orally and documented actions/conduct and can be done electronically based on the agreement of the parties in accordance with Sharia Principles and statutory regulations. f. Savings mudarabah deposits whose risk is borne by the Bank, are guaranteed by LPS. g. Investment mudarabah deposits whose risk is borne by the customer, are not guaranteed by LPS.

Characteristics:
a. The Bank can charge account administration fees in the form of fees directly related to account management costs, including opening costs and account closure costs. b. The Bank can deduct zakat, infak, waqf, sedekah and other social funds on profit sharing received by customers as requested by customers in the account opening agreement for deposits.
c. Deposits that have matured can be automatically extended (automatic roll over) in accordance with the agreement.
d. Deposit profit sharing can add deposit principal or be transferred to other accounts such as giro or savings as requested by customers. e. Deposits can be ordinary deposits or deposit on call. f. In the event of ordinary deposits, the Bank can impose penalties if customers withdraw funds before maturity. g. In the event of deposit on call:

Customers must inform the Bank in advance if they will withdraw deposit on call funds.
The maximum time limit is 30 (thirty) days.
h. The Bank can add Sharia insurance coverage features for

individual customers by following applicable regulations.
i. The Bank can provide promotional prizes by meeting the following requirements:

not agreed upon, do not lead to hidden riba practices and/or do not become customary (habitual).
must be in the form of goods, vouchers, electronic money, gold and/or services (not in the form of money) in accordance with regulations in fatwa.
in the event that prizes are in the form of goods, promotional prizes given must be tangible objects, whether physical or legal form and halal.
National Sharia Council Fatwa:
a. DSN-MUI Fatwa Number 03/DSN-MUI/IV/2000 regarding Deposits. b. DSN-MUI Fatwa Number 86/DSN-MUI/XII/2012 regarding Prizes in Fund Collection by Islamic Financial Institutions.
c. DSN-MUI Fatwa Number 100/DSN-MUI/XII/2015 Regarding Guidelines for Multi-Utility Voucher Sharia Transactions.
d. DSN-MUI Fatwa Number 74/DSN-MUI/I/2009 Regarding Sharia Guarantee.

Sharia Certificate of Deposit
(SDS)
Definition:
Deposits based on Mutlaq Mudarabah contract or investment based on Mutlaq Mudarabah or Muqayyadah contract in the form of deposits whose proof of deposit certificates can be transferred by meeting certain conditions. Contract:
a. Mutlaq Mudarabah. b. Muqayyadah Mudarabah.
Requirements:
a. In the event that Sharia certificates of deposit use the contract:

Mutlaq Mudarabah:
The Bank is not limited to using customer funds in fund disbursement activities as long as it does not conflict with Sharia Principles;
Muqayyadah Mudarabah:
a) Customers as fund owners provide certain conditions and limitations to the Bank, including regarding location, method, and/or investment objects clearly stated in the agreement; and b) Customers as fund owners bear the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or losses that are not due to the negligence of the Bank as a fund manager and/or violate the substance of the agreement. Characteristics:
a. The Bank can deduct zakat, infak, waqf, sedekah and other social funds on profit sharing received by customers as requested by customers in the Sharia certificate of deposit agreement. b. Transfer transactions of Sharia certificates of deposit are carried out using a sales contract (bai') with an agreed price. In certain cases, the transfer of Sharia certificates of deposit can be carried out, for example, due to inheritance and gifts supported by a statement of Sharia compliance from the National Sharia Council-Majelis Ulama Indonesia.
c. Deposits in the form of Sharia certificates of deposit based on Mutlaq Mudarabah contract bear risk borne by the Bank, so they are guaranteed by LPS.
d. Investments in the form of Sharia certificates of deposit based on Mutlaq Mudarabah or Muqayyadah Mudarabah contract bear risk borne by the customer, so they are not guaranteed by LPS. National Sharia Council Fatwa:
a. DSN-MUI Fatwa Number 97/DSN-MUI/XII/2015 regarding Sharia Certificates of Deposit. b. DSN-MUI Fatwa Number 74/DSN-MUI/I/2009 Regarding Sharia Guarantee.

Received Financing
Definition:
Financing received from individuals and/or non-individuals as one of the fund collection instruments.

Contract:
a. Mutlaq Mudarabah. b. Muqayyadah Mudarabah.
Requirements:
a. In the event that received financing uses the contract:

Mutlaq Mudarabah
The Bank is not limited to using customer funds in fund disbursement activities as long as it does not conflict with Sharia Principles;
Muqayyadah Mudarabah
a) Customers as fund owners provide certain conditions and limitations to the Bank, including regarding location, method, and/or investment objects clearly stated in the agreement; and b) Customers as fund owners bear the risk of loss in the event that the financed investment object or underlying asset experiences a decline in quality or losses that are not due to the negligence of the Bank as a fund manager and/or violate the substance of the agreement. b. The Bank and customers carry out profit distribution in the form of a mutually agreed nisbah and are recorded in the agreement.
c. The Bank can reduce customer profit nisbah as long as it obtains customer approval.
d. The Bank must disclose details of received financing regarding:
type (source of funds) of received financing;
time limit, remuneration (if any), and maturity of received financing;
type of currency (rupiah and foreign currency);
accompanying contracts;
value of Bank assets that are financed/guaranteed; and
special relationships.
e. Received financing is recognized at the nominal value at the time the agreement is signed or an agreement occurs between the customer and the receiving Bank.
Characteristics:
a. Profit sharing methods can use gross profit sharing or profit sharing. b. In the event that received financing uses:
Mutlaq Mudarabah using gross profit sharing method, then the Bank guarantees all customer fund principal.
Mutlaq Mudarabah using profit sharing method, then:
a) investment funds are not guaranteed by the Bank; and b) customers as fund owners bear the risk of loss in the event that the Bank experiences losses that are not caused by the negligence of the Bank; or
Muqayyadah Mudarabah using profit sharing or gross profit sharing method, investment funds are not guaranteed by the Bank.
National Sharia Council Fatwa:
a. DSN-MUI Fatwa Number 07/DSN-MUI/IV/2000 regarding Mudarabah Financing (Qiradh). b. DSN-MUI Fatwa Number 19/DSN-MUI/IV/2001 regarding Al-Qardh.
c. DSN-MUI Fatwa Number 08/DSN-MUI/IV/2000 regarding Musyarakah Financing.

II. Basic Bank Products that are Fund Disbursement Activities
No. Bank Product Definition or General Characteristics

Murabahah Financing Definition:
Provision of funds or claims that can be equated with it for commodity sales transactions at the purchase price plus margin based on agreement or agreement between the Bank and customers who require customers to repay debts/obligations. Contract:
Murabahah.
Requirements:
a. The Bank acts as the fund provider to sell goods and customers as the buyer of goods. b. Goods that are murabahah assets must be clearly known specifications, quantity, quality, and purchase price.
c. Goods that are murabahah assets can be tangible or intangible assets (examples: hishah and patents) and are already available (ready stock) at the time of the contract.
d. The purchase price of murabahah assets must be informed by the Bank to customers. e. The financing period is set based on the agreement of the Bank and customers. f. The Bank and customers record financing agreements in written agreements and can also be done orally and documented actions/conduct and can be done electronically based on the agreement of the parties in accordance with Sharia Principles and statutory regulations. Characteristics:
a. The Bank can provide financing in rupiah or foreign currency (specifically for financing in foreign currency only applies to Banks that have obtained approval to conduct business activities in foreign currency). b. The Bank can provide financing for working capital, investment, and/or consumption purposes.
c. Assets that are the object of murabahah can be property, motor vehicles, or other assets.
d. The Bank can finance part or all of the purchase price of goods. e. The Bank can delegate to customers to purchase goods needed by customers from third parties for and on behalf of the Bank. In this case, the murabahah contract can only be carried out after the goods have essentially become the property of the Bank. Customers are required to purchase goods already provided by the Bank and the Bank can claim compensation from customers if it causes losses. f. The Bank can request a down payment from customers as proof of commitment to purchase murabahah assets before the contract is agreed upon with the following treatment:

in the event that the murabahah contract is agreed upon, the down payment becomes part of the settlement of murabahah receivables; or
in the event that the murabahah contract is cancelled, the down payment is returned to customers after being reduced by actual losses borne by the Bank. If the down payment is smaller than actual losses, the Bank can request additional payments from customers.
g. The Bank can provide discounts at the time of settlement of murabahah receivables provided that they are not agreed upon in the contract. h. The Bank in recognizing murabahah income can use the annuity method or proportional method.
i. The Bank can provide discounts (discounts) on the purchase price of goods from suppliers (suppliers) with the following treatment:
in the event that it is given before the murabahah contract occurs, the price discount becomes the customer's right and reduces the murabahah selling price; or
in the event that it is given after the murabahah contract occurs, it is divided according to the agreement in the contract. If not regulated in the contract, the price discount becomes the Bank's right.

j. The Bank can provide discounts on unpaid murabahah installments if customers make installment payments on time and/or experience a decrease in payment ability, provided that they cannot be agreed upon in the contract and the amount of discounts is left to the Bank's policy. In the event that the Bank provides discounts on unpaid murabahah installments because customers make installment payments on time, the Bank must have policies and criteria regarding customers who make installment payments on time. The mechanism for providing murabahah installment discounts refers to the Indonesian Sharia Banking Accounting Guidelines (PAPSI). k. The Bank can impose penalties on customers who cannot make murabahah receivable installment payments with indications including intentional elements and elements of fund misuse. National Sharia Council Fatwa:
a. DSN-MUI Fatwa Number 04/DSN-MUI/IV/2000 regarding Murabahah. b. DSN-MUI Fatwa Number 10/DSN-MUI/IV/2000 regarding Wakalah.
c. DSN-MUI Fatwa Number 13/DSN-MUI/IX/2000 regarding Down Payments in Murabahah.
d. DSN-MUI Fatwa Number 16/DSN-MUI/IX/2000 regarding Discounts in Murabahah.

e. DSN-MUI Fatwa Number 23/DSN-MUI/III/2002 regarding Settlement Discounts in Murabahah. f. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 regarding Compensation (Ta'widh). g. DSN-MUI Fatwa Number 46/DSN-MUI/II/2005 regarding Murabahah Bill Discounts (Khashm Fi Al-Murabahah). h. DSN-MUI Fatwa Number 47/DSN-MUI/II/2005 regarding Murabahah Receivables Settlement for Customers Unable to Pay.
i. DSN-MUI Fatwa Number 48/DSN-MUI/II/2005 regarding Murabahah Bill Rescheduling.
j. DSN-MUI Fatwa Number 49/DSN-MUI/II/2005 regarding Conversion of Murabahah Contracts. k. DSN-MUI Fatwa Number 84/DSN-MUI/XII/2012 Regarding Profit Recognition Methods Al-Tamwil Bi AlMurabahah (Murabahah Financing) at Islamic Financial Institutions.
l. DSN-MUI Fatwa Number 90/DSN-MUI/XII/2013 Regarding Transfer of Murabahah between Islamic Financial Institutions (LKS).
m. DSN-MUI Fatwa Number 110/DSN-MUI/IX/2017 regarding Sales Contracts. n. DSN-MUI Fatwa Number 111/DSN-MUI/IX/2017 regarding Murabahah Sales Contracts.
2. Istishna’ Financing Definition:
Provision of funds or claims that can be equated with it for transactions

Sale and purchase in the form of ordering the manufacture of specific goods with agreed criteria and requirements between the orderer/buyer and the seller/manufacturer.

Contract:
Istishna’.

Requirements:
a. The Bank acts as both the fund provider and seller for Istishna’ transactions with customers as the buyer. b. The specifications and price of the ordered goods in Istishna’ are agreed upon by the customer and the Bank at the beginning of the contract.
c. The ordered goods must have generally known characteristics including: type, variety, quality, and quantity. The ordered goods must match the characteristics agreed upon between the customer and the Bank. In the event that the delivered goods are incorrect or defective, the Bank must be responsible for its negligence.
d. Payment by the customer to the Bank must not be in the form of debt forgiveness or the granting of credit. e. The Bank cannot request additional price if the customer accepts goods of higher quality, unless there is an agreement between both parties.

f. The Bank is not required to provide a price discount if the customer accepts goods of lower quality, unless there is an agreement between both parties. g. The financing period is set based on the agreement between the Bank and the customer. h. The Bank and customer document the financing agreement in a written contract, which can also be done orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations.

Characteristics:
a. The Istishna’ payment mechanism is agreed upon in the contract and can be done by:

Advance payment in full or in part after the contract but before the manufacture of the goods;
Payment upon delivery of goods or during the manufacturing process (payment per installment);
Deferred payment after the delivery of goods; and/or
A combination of the above payment methods.
b. Istishna’ revenue recognition methods can be done using the percentage of completion method or the completed contract method.
c. In the event that all or part of the goods are not available according to the delivery time, quality, or quantity as agreed, the customer has the option to:
Cancel the contract and request a refund from the Bank;
Wait for the delivery of available goods; or
Request the Bank to replace it with other similar or dissimilar goods as long as the market value is the same as the originally ordered goods.
d. The Bank can recognize revenue up to the maximum amount of assets already received by the customer.

Fatwa of the National Sharia Council:
a. DSN-MUI Fatwa Number 06/DSN-MUI/IV/2000 concerning Istishna’ Sale and Purchase. b. DSN-MUI Fatwa Number 22/DSN-MUI/III/2002 concerning Parallel Istishna’ Sale and Purchase.
c. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).

Salam Financing
Definition:
Provision of funds or claims that can be equated to it for the sale and purchase of ordered goods with delivery of goods at a later time by the seller and repayment by the buyer at the time the contract is agreed upon in accordance with certain conditions.

Contract:
Salam.

Requirements:
a. The Bank can act as buyer and/or seller in a Salam transaction. In the event the Bank acts as the buyer, the Bank conducts a Salam transaction, and in the event the Bank acts as the seller, the Bank will order from another party to provide the ordered goods in a parallel Salam. b. The specifications and price of the ordered goods are agreed upon at the beginning of the contract by the customer and the Bank in the first contract or by the Bank with the supplier in the second contract. The price terms for the ordered goods cannot change during the contract period.
c. The ordered goods must have generally known characteristics including: type, variety, quality, and quantity.
d. The ordered goods must match the characteristics agreed upon between the customer and the Bank or the Bank and the supplier. In the event that the delivered goods are incorrect or defective, the Bank or supplier must be responsible for its negligence. e. Payment by the customer to the Bank must not be in the form of debt forgiveness or the granting of credit.

f. Salam revenue is obtained from the difference between the selling price to the customer and the purchase price from the supplier. g. The Bank and customer document the financing agreement in a written contract, which can also be done orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations.

Characteristics:
a. In the event the Bank acts as the buyer, the Bank can request guarantees from the supplier to avoid risks that are detrimental to the Bank. b. The Bank can impose fines on the supplier.

Fatwa of the National Sharia Council:
a. DSN-MUI Fatwa Number 05/DSN-MUI/IV/2000 concerning Salam Sale and Purchase. b. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).

Mudarabah Financing
Definition:
Provision of funds for business cooperation between two parties where the fund owner provides all the funds, while the fund manager acts as the manager, and profits are shared among them according to the agreed ratio.

Contract:
Mudarabah.

Requirements:
a. The Bank acts as the fund owner and the customer acts as the fund manager. b. In the event financing uses:

Absolute Mudarabah contract, then the Bank as the fund owner gives freedom to the customer as the fund manager in managing the funds.
Restricted Mudarabah contract, then the Bank as the fund owner gives specific restrictions to the customer as the fund manager, including regarding location, method, and/or investment object.
c. The customer's business activities do not conflict with Sharia Principles.
d. The period for fund repayment and profit sharing from fund management is determined based on the agreement between the Bank and the customer. e. Profit sharing from fund management is stated in the agreed ratio. f. Profit sharing is done based on the customer's business result report. g. The profit-sharing ratio can be set in tiers (tiering) with different sizes throughout the financing period or set otherwise that is not detrimental and agreed upon by the parties. The agreed profit-sharing ratio cannot be changed during the financing period, unless based on the agreement of the parties. h. In the event the customer commits negligence, fraud, and/or violates the agreement resulting in business loss:
The Bank is not responsible for the losses incurred; and
The customer is required to return the remaining financing provided by the Bank and the profit share that has become the Bank's right but has not yet been paid.
i. The Bank and customer make the financing agreement in a written contract, which can also be done orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations.
j. Profit-sharing methods can use:
Profit sharing, which is profit sharing calculated from income after deducting capital (ra’su al-mal) and costs; or
Gross profit sharing, which is profit sharing calculated from income after deducting capital (ra’su al-mal).

Characteristics:
a. The Bank can provide financing used for working capital and/or investment purposes. b. The Bank can request guarantees from the customer at the time of financing disbursement.
c. The Bank cannot require the customer to guarantee the return of capital.
d. The customer can guarantee the return of capital of their own volition without request from the Bank. e. The Bank can request a third party to guarantee the return of capital. f. In the event the business suffers a loss while the Bank disagrees with the loss, the customer is required to prove that the loss incurred was not due to ta'addi (transgression), tafrith (wastefulness), or mukhalafat al-syuruth (violation of conditions). g. In the event the proof is accepted by the fund owner, the loss becomes the responsibility of the fund owner. h. In the event the proof is not accepted by the fund owner, the dispute is resolved through litigation or non-litigation channels.
i. Before a decision is established and binding, the loss becomes the responsibility of the manager.
j. Business losses that are the responsibility of the shahibul mal (fund owner) are according to the agreed profit-sharing calculation method. k. The Bank can charge administrative fees according to the agreement, the amount of which corresponds to the actual costs directly related to the financing.
l. Financing disbursement by the Bank can be done in a lump sum or in stages.
m. Financing repayment by the customer can be done in two ways, namely:

Periodically according to the projected cash inflow of the customer's business; or
In a lump sum at the end of financing (for financing with a term of up to 1 (one) year).

Fatwa of the National Sharia Council:
a. DSN-MUI Fatwa Number 07/DSN-MUI/IV/2000 concerning Mudarabah Financing (Qiradh). b. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).
c. DSN-MUI Fatwa Number 105/DSN-MUI/X/2016 concerning Guarantee of Return of Mudarabah, Musyarakah, and Wakalah Bil Istitsmar Financing Capital.
d. DSN-MUI Fatwa Number 115/DSN-MUI/IX/2017 concerning Mudarabah Contract. e. DSN-MUI Fatwa Number 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh Due to Breach of Contract.

Musyarakah Financing
Definition:
Provision of funds for specific business cooperation where each party provides a portion of funds with the provision that profits will be shared according to the agreed ratio, while losses are borne according to each party's fund portion.

Musyarakah financing can be in the form of investment financing, working capital financing, or Sharia current account financing.

Contract:
Musyarakah.

Requirements:
a. The Bank and customer each act as business partners by jointly providing funds to finance a specific business activity. b. Profit sharing from fund management is stated in the agreed ratio.
c. Profit sharing is done based on the customer's business result report.
d. The profit-sharing ratio can be set in tiers (tiering) with different sizes throughout the financing period or set otherwise that is not detrimental and agreed upon by the parties. The agreed profit-sharing ratio cannot be changed during the financing period, unless based on the agreement of the parties. e. The Bank and customer bear losses proportionally according to their respective capital. In the event the customer commits negligence, fraud, and/or violates the agreement resulting in business loss, then:

The Bank is not responsible for the losses incurred; and
The customer is required to return the remaining financing provided by the Bank and the profit share that has become the Bank's right but has not yet been paid.
f. The customer acts as the business manager and the Bank as a business partner can participate in business management according to agreed duties and authorities, such as conducting review and/or requesting business result reports made by the customer based on supporting evidence that can be accounted for. g. The Bank and customer document the financing agreement in a written contract, and the Musyarakah contract can also be done orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations. h. In the event there is profit exceeding a certain amount, the excess or percentage can be given to one of the parties according to the agreement.

Characteristics:
a. The Bank can provide financing for working capital and/or investment purposes. b. The Bank cannot require the customer to guarantee the return of capital.
c. The customer can guarantee the return of capital of their own volition without request from the Bank.
d. The Bank can request a third party to guarantee the return of capital. e. In the event the business suffers a loss while the Bank disagrees with the loss, the customer is required to prove that the loss incurred was not due to ta'addi, tafrith, or mukhalafat al-syuruth. f. In the event the proof is accepted by the fund owner, the loss becomes the responsibility of the fund owner. g. In the event the proof is not accepted by the fund owner, the dispute is resolved through litigation or non-litigation channels. h. Before a decision is established and binding, the loss becomes the responsibility of the manager.
i. The Bank can charge administrative fees according to the agreement, the amount of which corresponds to the actual costs directly related to the financing.
j. Financing disbursement can be done in a lump sum or in stages. k. The Bank or customer can propose that if profit exceeds a certain amount, the excess or percentage can be given to one of the parties according to the agreement as long as it does not harm the fund-owning customer.
l. The financing profit-sharing method refers to PAPSI.

Fatwa of the National Sharia Council:
a. DSN-MUI Fatwa Number 08/DSN-MUI/IV/2000 concerning Musyarakah Financing. b. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).
c. DSN-MUI Fatwa Number 55/DSN-MUI/V/2007 concerning Sharia Current Account Musyarakah Financing.
d. DSN-MUI Fatwa Number 105/DSN-MUI/X/2016 concerning Guarantee of Return of Mudarabah, Musyarakah, and Wakalah Bil Istitsmar Financing Capital. e. DSN-MUI Fatwa Number 114/DSN-MUI/IX/2017 concerning Syirkah Contract. f. DSN-MUI Fatwa Number 129/DSN-MUI/VII/2019 Concerning Actual Costs as Ta’widh Due to Breach of Contract.

Musyarakah Mutanaqishah (MMQ) Financing
Definition:
Musyarakah financing where the ownership of assets or capital of one party (syarik) decreases due to gradual purchase by the other party.

Contract:
Musyarakah and Bai’.

Requirements:
a. Meet Musyarakah financing requirements including:

Bank and customer provide capital contributions based on agreement;
Profits are shared according to the agreed ratio;
In the event the business suffers a loss while the Bank disagrees with the loss, the customer is required to prove that the loss incurred was not due to ta'addi, tafrith, or mukhalafat al-syuruth;
In the event the proof is accepted by the fund owner, the loss becomes the responsibility of the fund owner;
In the event the proof is not accepted by the fund owner, the dispute is resolved through litigation or non-litigation channels;
Before a decision is established and binding, the loss becomes the responsibility of the customer; and
Losses are borne according to capital proportion.
b. The business capital of the parties (Bank and customer) is stated in the form of ownership portions (hishshah).
c. Business capital that has been stated in the form of ownership portions (hishshah) cannot decrease during the effective contract period.
d. The Bank promises to sell all of its ownership portions (hishshah) on a scheduled/regular or unscheduled basis, and the customer is required to buy them. e. Ownership portions (hishshah) of one party transfer due to the purchase of hishshah units by the other party.

f. At the agreed period or based on the agreement of the parties, the Bank transfers all of its hishshah to the customer and the customer is required to pay the price of the transferred hishshah. g. Profits obtained from business activities include; MMQ asset rent is shared according to the ratio agreed upon in the contract, while losses are shared based on ownership portions (hishshah). In the event the customer breaches the contract, the customer returns the MMQ asset that is the object of the partnership to return the Bank's remaining ownership portion. h. The financing period is determined based on the agreement between the Bank and the customer, orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations.
i. The Bank and customer document the financing agreement in a written contract, and the Musyarakah Mutanaqishah contract can also be done orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations.

Characteristics:
a. The Bank can provide financing used for consumption, investment, and/or working capital purposes. b. The Bank can request guarantees from the customer at the time of financing disbursement.
c. The Bank can charge administrative fees according to the agreement, the amount of which corresponds to the actual costs directly related to the financing.
d. The profit-sharing ratio can be set in tiers (tiering) with different sizes throughout the financing period, set following changes in capital ownership proportion, or set in other ways that are not detrimental and agreed upon by the parties. e. MMQ assets can be rented to the customer or other parties. In the event MMQ assets are rented to the customer partnership, the recorded rent payment at the Bank can be used as evidence of business income. f. Payment of ujrah from MMQ asset rent can be done according to agreement in cash, deferred, or staged manner. g. The Bank can conduct ujrah review of MMQ rent if it meets the following conditions:

changes occur in the next rent payment period;
there is a very strong indication that if the review is not conducted, losses will arise for one of the parties; and
agreed upon by both parties (Bank and customer or other party renting).
h. Ujrah review provisions are explained in the contract, including regarding the ujrah review period or formula for determining ujrah.
i. In the event that at the beginning of the MMQ financing period it does not provide optimal benefits, the Bank is permitted to grant relief to the customer not to buy the Bank's hishshah units.
j. The profit-sharing method refers to PAPSI. k. MMQ assets can be:
tangible assets or already available or ready stock; and/or
intangible assets or orders.
In the event MMQ assets are order goods or in the process of construction/production, they must meet the following requirements:
using MMQ and ijarah maushufah fi al-dzimmah contracts.
In the event financing is intended for property ownership, it must also meet the following:
a) meet requirements as regulated in provisions regarding loan to value ratio or financing to value ratio for property credit or financing and down payment for motor vehicle credit or financing, including:
i. financing is first-ranking property financing;
ii. there is a cooperation agreement between the Bank and the developer containing at least the developer's commitment to complete the property as agreed with the customer;
iii. there is a guarantee provided by the developer to the Bank originating from the developer itself or another party that can be used to fulfill the developer's obligations if the property cannot be completed and/or cannot be handed over as agreed; and
iv. property financing disbursement can only be done in stages according to the development progress of the financed property.
b) In the cooperation agreement between the Bank and the developer, there must be clauses regarding clarity of the financed object related to:
i. quantity and quality;
ii. criteria and specifications; and
iii. construction period and handover time.
c) In the MMQ financing agreement, there must be clauses regulating the resolution of issues in the event the developer breaches the contract. d) The Bank must have policies and criteria for developers who can cooperate with the Bank. e) The Bank must ensure that the developer has the ability to realize MMQ assets, which can be indicated by parameters including:
i. the land is available, certified, and free of disputes; and
ii. the developer has obtained a building construction permit in accordance with applicable regulations.
f) Revenue recognition while MMQ assets are still orders refers to PAPSI.
l. The partners are responsible for the construction/production process of order goods.
m. In the event order goods (in the process of construction/production) cannot be handed over by the construction deadline, the partners are responsible for returning the ujrah that has been paid by the tenant.

Fatwa of the National Sharia Council:
a. DSN-MUI Fatwa Number 08/DSN-MUI/IV/2000 concerning Musyarakah Financing. b. DSN-MUI Fatwa Number 09/DSN-MUI/IV/2000 concerning Ijarah Financing.
c. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).
d. DSN-MUI Fatwa Number 56/DSN-MUI/V/2007 concerning Ujrah Review Provisions in Sharia Financial Institutions. e. DSN-MUI Fatwa Number 73/DSN-MUI/XI/2008 concerning Musyarakah Mutanaqishah. f. DSN-MUI Fatwa Number 89/DSN-MUI/XII/2013 concerning Sharia Refinancing. g. DSN Decision No. 01/DSN-MUI/X/2013 concerning Guidelines for Implementation of Musyarakah Mutanaqishah in Financing. h. DSN-MUI Fatwa Number 105/DSN-MUI/X/2016 Concerning Guarantee of Return of Mudarabah, Musyarakah, and Wakalah Bil Istitsmar Financing Capital.
i. DSN-MUI Fatwa Number 114/DSN-MUI/IX/2017 Concerning Syirkah Contract.
j. DSN-MUI Fatwa Number 43/DSN-MUI/VIII/2004 Concerning Compensation (Ta’widh). k. DSN-MUI Fatwa Number 129/DSN-MUI/VII/2019 Concerning Actual Costs as Ta’widh Due to Breach of Contract.

Ijarah Financing
Definition:
Provision of funds for the transfer of use/benefit rights over an asset for a certain period with rent (ujrah) payment without being followed by the transfer of ownership of the asset itself.

Contract:
Ijarah.

Requirements:
a. The Bank acts as the owner and/or party having the right of control and right to lease the rental goods, whether tangible assets, intangible assets, or services, which leases the rental goods to the customer according to the agreement. b. Rental goods must be assessable and specifically identifiable and clearly stated, including the amount of rent and the duration.
c. Rent payment cannot be done in the form of credit or debt forgiveness.
d. The Bank can require the customer to be responsible for damage to the rental object occurring due to contract violation or customer negligence. e. The Bank and customer document the financing agreement in a written contract, and the Ijarah contract can also be done orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable regulations.

Characteristics:
a. The Bank can charge administrative fees according to the agreement, the amount of which corresponds to the actual costs directly related to the financing. b. The Bank can conduct ujrah review if it meets the following conditions:

changes occur in the next rent payment period;
there is a very strong indication that if the review is not conducted, losses will arise for one of the parties; and/or
agreed upon by both parties (Bank and customer or other party renting).
c. Ujrah review provisions are explained in the contract, including regarding the ujrah review period and formula for determining ujrah.

d. The lease object is a tangible asset or an intangible asset from which benefits can be derived. e. In the case of intangible assets, the benefits of the intangible asset may be transferred throughout the financing period. f. The Bank may require the customer to maintain the integrity of the leased item and bear maintenance costs for the leased item in accordance with the agreement, where descriptions of material and structural maintenance costs must be included in the contract. g. The Bank may add insurance costs for the object to the acquisition cost of the item. h. Lease payments can be made in installments or in a lump sum, in accordance with the agreement.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 09/DSN-MUI/IV/2000 concerning Ijarah Financing. b. Fatwa DSN-MUI Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).
c. Fatwa DSN-MUI Number 56/DSN-MUI/V/2007 concerning Ujrah Review Regulations in Sharia Financial Institutions.
d. Fatwa DSN-MUI Number 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh for Breach of Contract.

Ijarah Muntahiyah Bittamlik (IMBT) Financing
Definition:
Provision of funds to transfer the right to use or benefit from a good or service based on a lease transaction with an option to transfer ownership of the item.
Contract:
Ijarah Muntahiyah Bittamlik (IMBT).
Requirements:
a. The Bank, as a provider of funds in ijarah activities with customers, also acts as a promisor (wa’ad) among others to provide an option to transfer ownership of the leased item to the customer in accordance with the agreement. b. The transfer of ownership of an asset from the Bank to the customer can be carried out if the leasing activity has ended or been terminated and the ijarah asset has been handed over to the customer by making a separate contract.
c. The leased item must be assessable and specifically identifiable and clearly stated, including the amount of the lease and the duration.
d. The item leased must be a tangible asset, already available or ready for use (ready stock) and can be handed over. e. The Bank and customer document the financing agreement in a written agreement, and the IMBT contract can also be conducted orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. Characteristics:
a. The Bank may charge administrative fees in accordance with the agreement, the amount of which corresponds to the actual costs directly related to the financing. b. The Bank may require the customer to be responsible for damage to the leased item caused by breach of contract or customer negligence.
c. The Bank may set the IMBT object as movable or immovable property, the lease benefit of which can be property, motor vehicles, or other assets.
d. The Bank may conduct ujrah review if it meets the following conditions:

changes occur in the next lease payment period;
there is a very strong indication that if a review is not conducted, losses will arise for one of the parties; and/or
agreed upon by both parties (Bank and customer or other lessee).

e. Ujrah review regulations are explained in the contract, including the ujrah review period and the formula for determining ujrah. f. The Bank may add insurance costs for the object to the acquisition cost of the item. g. The Bank and customer may agree on lease payment methods in installments or in a lump sum.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 09/DSN-MUI/IV/2000 concerning Ijarah Financing. b. Fatwa DSN-MUI Number 27/DSN-MUI/III/2002, concerning Al-Ijarah Al-Muntahiyah Bi Al-Tamlik.
c. Fatwa DSN-MUI Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).
d. Fatwa DSN-MUI Number 56/DSN-MUI/V/2007 concerning Ujrah Review Regulations in Sharia Financial Institutions. e. Fatwa DSN-MUI Number 71/DSN-MUI/VI/2008 concerning Sale and Leaseback. f. Fatwa DSN-MUI Number 101/DSN-MUI/X/2016 concerning Akad Al Ijarah Maushufah Fi Al Dzimmah (IMFD). g. Fatwa DSN-MUI Number 102/DSN-MUI/X/2016 concerning Akad Al Ijarah Maushufah Fi Al Dzimmah (IMFD) for Indent Home Ownership Financing Products (PPR).

h. Fatwa DSN-MUI Number 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh for Breach of Contract.

Ijarah Multijasa Financing
Definition:
Provision of funds for the transfer of benefits over services for a certain period with lease payments (ujrah).
Contract:
Ijarah or kafalah.
Requirements:
a. The Bank acts as the owner and/or the party having the right of control and the right to lease the lease object to the customer in accordance with the agreement. b. In the case of intangible assets, the benefits of the intangible asset must have been transferred to the customer at the beginning of the financing.
c. The Bank may obtain service compensation/ujrah/fee. The amount of compensation/ujrah/fee is agreed upon at the beginning of the contract and stated in nominal form (not in percentage form).
d. Financing involves three parties, namely the Bank, the customer, and a third party. e. The Bank and customer document the financing agreement in a written agreement, and the ijarah multijasa contract can also be conducted orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. Characteristics:
a. The Bank may provide ijarah multijasa financing for purposes such as education services, health services, tourism services, umrah pilgrimage services, and other services that do not contradict Sharia Principles. b. The Bank may require the customer to provide invoices/service order receipts before submitting financing applications and/or before financing disbursement.
c. The Bank may conduct inspections after the disbursement process to ensure that the disbursed funds correspond to the stated purpose of use at the time of the financing application.
d. The Bank may charge administrative fees in accordance with the agreement, the amount of which corresponds to the actual costs directly related to the financing. e. The Bank may require guarantees.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 09/DSN-MUI/IV/2000 concerning Ijarah Financing. b. Fatwa DSN-MUI Number 44/DSN-MUI/VII/2004 concerning Multijasa Financing.
c. Fatwa DSN-MUI Number 11/DSN-MUI/IV/2000 concerning Kafalah.

d. Fatwa DSN-MUI Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh). e. Fatwa DSN-MUI Number 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh for Breach of Contract.

Qardh Financing
Definition:
Provision of funds or claims that can be equated to it based on agreement or consensus between the borrower and the lender, which obligates the borrower to repay the debt after a certain period. Contract:
Qardh.
Requirements:
a. The Bank acts as a provider of funds to provide qardh loans to customers based on agreement. b. The qardh loan provided is a loan that does not require compensation.
c. The Bank may only charge administrative fees for qardh loans in nominal form and not related to the amount and duration of the loan.
d. If qardh financing becomes a complementary contract to other contracts, the other contracts may generate income. f. The Bank and customer document the financing agreement in a written agreement, and can also be conducted orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. Characteristics:
The Bank may require guarantees for the provision of qardh.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 19/DSN-MUI/IV/2001 concerning Al-Qardh. b. Fatwa DSN-MUI Number 79/DSN-MUI/IV/2001 concerning Qardh Using Customer Funds.
c. Fatwa DSN-MUI Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).

Hajj Management Financing
Definition:
Financing provided by the Bank to customers for the purpose of managing Hajj.
Contract:
a. Ijarah; and b. Qardh.
Requirements:
a. The Bank has been designated as a BPS BPIH by the competent authority. b. The Bank, in providing Hajj management services, must not require the provision of Hajj registration financing.
c. In the event the Bank provides Hajj registration financing:

the amount of ujrah for Hajj management must not be based on the amount of Hajj registration financing provided by the Bank to the customer.
The Bank conducts customer analysis which includes aspects such as personal character analysis (character) and/or financial aspects.
g. The Bank and customer document the financing agreement in a written agreement, and can also be conducted orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. d. The Bank applies product information transparency and customer protection in accordance with applicable regulations. e. The Bank has policies and procedures for risk mitigation. f. The Bank has adequate recording and account administration systems. Characteristics:
a. The Bank may charge ujrah for Hajj management. b. For Hajj management, the Bank may provide Hajj registration financing or not provide Hajj registration financing. In the event the Bank provides Hajj registration financing, then:
the maximum duration is 1 (one) year and cannot be extended;
the customer is required to repay the Hajj registration financing provided before the departure time for Hajj;
repayment of Hajj registration financing can be done periodically or in a lump sum at the end;
The Bank may require guarantees in the form of Hajj registration proof and/or a letter of authority to cancel the registration; and
The Bank may charge administrative fees to customers in nominal form and not related to the amount and duration of the Hajj advance.
Fatwa:
a. Fatwa DSN-MUI Number 19/DSN-MUI/IV/2001 concerning Al-Qardh. b. Fatwa DSN-MUI Number 29/DSN-MUI/VI/2002 concerning Hajj Management Financing by Sharia Financial Institutions.
c. Fatwa DSN-MUI Number 79/DSN-MUI/IV/2001 concerning Qardh Using Customer Funds.
d. Fatwa DSN-MUI Number 43/DSN-MUI/VIII/2004 concerning Compensation (Ta’widh).

e. Fatwa DSN-MUI Number 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh for Breach of Contract.

Sharia Factoring
Definition:
Transfer of the settlement of short-term receivables or claims from a customer who has receivables or claims to the Bank, which then collects the receivables from the debtor or a party designated by the debtor in accordance with Sharia Principles. Contract:
Wakalah bil ujrah.
Requirements:
a. The customer delegates to the Bank to handle sales documents and then collect receivables from the debtor or another party designated by the debtor. b. The Bank becomes the agent of the customer to collect (collection) from the debtor or another party designated by the debtor to pay. h. The Bank and customer document the financing agreement in a written agreement, and can also be conducted orally and through documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. Characteristics:
a. The Bank may charge administrative fees in accordance with the agreement. b. The Bank may provide advance funds (qardh) to the creditor for the amount of the receivable. In the event the Bank provides advance funds (qardh), there must be no connection between the wakalah bil ujrah contract and the qardh contract.
c. The Bank may obtain ujrah/fee for its services in collecting receivables. In the event the bank obtains ujrah/fee:

the amount of ujrah/fee must be agreed upon at the time of the contract and stated in nominal form, not in percentage form calculated from the principal receivable;
payment of ujrah/fee can be taken from the advance funds or in accordance with the agreement in the contract.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 67/DSN-MUI/III/2008 concerning Sharia Factoring. b. Fatwa DSN-MUI Number 104/DSN-MUI/X/2016 concerning Subrogation Based on Sharia Principles.

Sharia Guarantee (Garansi)
Definition:
A written commitment given by the Bank to the guarantee recipient that the Bank will pay a certain amount of money to them at a certain time if the guaranteed party cannot fulfill its obligations in the form of Bank Guarantees, Standby L/C, Demand Guarantees, and Counter Guarantees. Contract:
Kafalah bil ujroh.
Requirements:
a. The Bank acts as the guarantor for the fulfillment of the customer's obligations to third parties. b. Guarantee object:

is the obligation of the customer requesting the guarantee;
the value, amount, and specifications are clear, including the duration of the guarantee; and
does not contradict Sharia Principles.
Characteristics:
a. The Bank may charge ujrah/fee agreed upon at the beginning and stated in a specific nominal amount. b. The Bank may require guarantees.
c. In the event the customer cannot fulfill its obligations to third parties, the Bank fulfills its obligations to third parties by providing advance funds or by executing the guarantee.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 11/DSN-MUI/IV/2000 concerning Kafalah. b. Fatwa DSN-MUI Number 19/DSN-MUI/IV/2001 concerning Al-Qardh.

Trade Financing
a. Issuance, Confirmation, and Financing with Letter of Credit (L/C) / Bank Certificates of Receipt (SKBDN) Definition:
Provision of one or more services including issuance, confirmation, and financing of L/C or SKBDN based on the written request of the applicant (applicant) which binds the issuing bank to:
a. make payments to the recipient or their order, or accept and pay bills of exchange drawn by the recipient; b. authorize other Banks to make payments to the recipient, accept and pay bills of exchange drawn by the recipient;
c. authorize other Banks to negotiate bills of exchange drawn by the recipient, upon presentation of documents as long as the requirements and conditions of the L/C or SKBDN are met;
d. request confirmation from the confirming Bank over the L/C or SKBDN issued; and/or e. provide financing for the L/C or SKBDN issued.
Contract:
a. Wakalah bil Ujrah; b. Wakalah bil Ujrah and Qardh;
c. Kafalah bil Ujrah;
d. Murabahah; e. Salam/Istishna’ and Murabahah; f. Wakalah bil Ujrah and Mudarabah; g. Musyarakah; h. MMQ;
i. IMBT;

j. Wakalah bil Ujrah and Hawalah; and/or k. Sharia contracts that are appropriate.
Requirements:
a. The Bank meets regulations governing L/C or SKBDN. b. The Bank and customer document the agreement for the issuance of L/C or SKBDN in the form of a written agreement or using a form or other form that can be equated to it, which is documented and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. Characteristics:
a. The Bank may obtain compensation/fee/ujrah/margin/profit sharing agreed upon at the beginning. b. The Bank may require guarantees.
c. If the customer does not have sufficient funds to pay for the ordered goods, then:

The Bank may provide advance funds (qardh) to the customer for the settlement of payment for ordered goods based on the principles of wakalah and qardh;
The Bank may act as the seller who sells the ordered goods to the customer with an agreed profit based on the principle of murabahah/salam/istishna’ financing;
The Bank may act as the fund owner who provides capital to the customer equal to the price of the ordered goods, based on the principle of mudarabah/musyarakah financing;
The Bank may act as the fund owner who makes payment to the recipient so that the payment shifts from the customer to the Bank based on the principle of hawalah;
In the event SKBDN uses kafalah or wakalah contracts, the Bank may refinance using MMQ or IMBT contracts over goods already purchased by the customer;
The Bank may use the wakalah bil ujrah contract, with the following conditions:
a) the importing customer has funds at the Bank equal to the price of the imported goods; b) the importing customer and the Bank conduct a wakalah bil ujrah contract for the handling of import transaction documents; and c) the amount of ujrah must be agreed upon at the beginning and stated in nominal form, not in percentage form;
The Bank may use the wakalah bil ujrah and qardh contract, with the following conditions:
a) the importing customer does not have sufficient funds at the Bank for payment of the price of imported goods; b) the importing customer and the Bank conduct a wakalah bil ujrah contract for the handling of import transaction documents; c) the amount of ujrah must be agreed upon at the beginning and stated in nominal form, not in percentage form; and d) The Bank provides advance funds (qardh) to the importer for the settlement of payment for imported goods;
The Bank may use the murabahah contract, with the following conditions:
a) The Bank acts as the buyer who delegates to the importing customer to conduct transactions with the exporter; b) document handling and payment are conducted by the Bank at sight and/or deferred until maturity (usance); c) The Bank sells goods via murabahah to the importing customer, either with cash or installment payments; and d) costs incurred by the Bank will be calculated as the acquisition cost of the goods;
The Bank may use the salam/istishna’ and murabahah contract, with the following conditions:
a) The Bank conducts a salam or istishna’ contract by delegating to the importing customer to conduct the transaction; b) document handling and payment are conducted by the Bank; c) The Bank sells goods via murabahah to the importing customer, either with cash or installment payments; and d) costs incurred by the Bank will be calculated as the acquisition cost of the goods;
The Bank may use the wakalah bil ujrah and mudarabah contract, with the following conditions:
a) the customer conducts a wakalah bil ujrah contract with the Bank to handle documents and payment; and b) the Bank and the importing customer conduct a mudarabah contract, where the Bank acts as the fund owner providing capital to the importing customer equal to the price of the imported goods;
The Bank may use the musyarakah contract where the Bank and the importing customer contribute capital to conduct import activities;
The Bank may use the kafalah bil ujrah contract, with the following conditions:
a) ujrah/fee for the kafalah transaction must be agreed upon and documented in the contract; and b) settlement of payment for goods purchased based on the L/C can be done with:
i. customer funds; or
ii. in the event the customer does not have funds, payment uses financing from the Bank using appropriate Sharia contracts based on DSN-MUI Fatwas;
In the event goods have been shipped, but payment has not been made, the alternative contracts used are:
a) alternative 1 using wakalah bil ujrah and qardh, with the following conditions:
i. the importing customer does not have sufficient funds at the Bank for payment of the price of imported goods;
ii. the importing customer and the Bank conduct a wakalah bil ujrah contract for the handling of import transaction documents;
iii. the amount of ujrah must be agreed upon at the beginning and stated in nominal form, not in percentage form; and
iv. The Bank provides advance funds (qardh) to the importing customer for the settlement of payment for imported goods; or

b) alternative 2 using wakalah bil ujrah and hawalah, with the following conditions:
i. the importing customer does not have sufficient funds at the Bank for payment of the price of imported goods;
ii. the importing customer and the Bank conduct a wakalah contract for the handling of import transaction documents;
iii. the amount of ujrah must be agreed upon at the beginning and stated in nominal form, not in percentage form; and
iv. the debt to the exporter is transferred by the importing customer to become a debt to the Bank by requesting the Bank to pay the exporter the value of the imported goods.

Fatwa of the National Sharia Council:
a. Fatwa DSN-MUI Number 27/DSN-MUI/IX/2002 concerning Al Ijarah Al-Muntahiyah Bi Al-Tamlik. b. Fatwa DSN-MUI Number 34/DSN-MUI/IX/2002 concerning Sharia Import Letter of Credit (L/C).
c. Fatwa DSN-MUI Number 57/DSN-MUI/IV/2007 concerning Letter of Credit (L/C) with Kafalah bil Ujrah contract.
d. Fatwa DSN-MUI Number 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh for Breach of Contract.

b. Receipt, Collection, Confirmation, Guarantee, and Financing of L/C and SKBDN Definition:
Provision of one or more services including receipt, collection, confirmation, transfer, and financing of L/C or SKBDN issued by the issuing Bank to facilitate trade with the fulfillment of certain requirements in accordance with Sharia Principles, including:
a. receiving and forwarding L/C or SKBDN to the recipient; b. collecting from the issuing Bank in accordance with instructions from the recipient;
c. receiving short-term receivables or claims services owned by the nominated Bank to the Bank, which then collects the receivables from the debtor (issuing Bank) in accordance with Sharia Principles;
d. adding confirmation to L/C or SKBDN received from the issuing Bank; e. transferring L/C or SKBDN at the request of the first recipient to the second recipient (transferable); f. providing guarantee services provided by the guarantor/kafiil (dhi. Bank) to third parties or the insured/nominated bank to fulfill the obligations of the second party (issuing Bank) or the guaranteed (makfuul’anhu/ashil) over L/C or SKBDN issued by the issuing Bank; and/or g. providing financing for L/C or SKBDN received.

Contract:
a. Wakalah bil Ujrah; b. Wakalah bil Ujrah and Qardh;
c. Wakalah bil Ujrah and Mudarabah;
d. Musyarakah; e. MMQ; f. Salam; g. Al Bai’ and Wakalah; h. Kafalah bil Ujrah; and/or
i. Other appropriate Sharia contracts.
Requirements:
The Bank and customer document the agreement for the issuance of L/C or SKBDN in the form of a written agreement or using a form or other form that can be equated to it, which is documented and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and applicable legislation. Characteristics:
a. The Bank may obtain compensation/fee/ujrah/margin/profit sharing agreed upon at the beginning. b. The Bank may require guarantees.
c. In the event the customer does not have sufficient funds to produce ordered goods or receive early payment, the Bank may provide financing in the form of mudarabah and musyarakah.
d. In the event the customer does not have sufficient funds to produce goods for export, then:

Banks may provide advance funds (qardh) to customers for the production process of goods ordered by importers;
Banks may act as the fund owner (shahibul mal) who provides capital to the customer equivalent to the price of exported goods, based on the principles of mudarabah or musyarakah financing;
Banks may use the wakalah bil ujrah contract, with the following provisions:
a) The bank handles export documents; b) The bank performs collection from the Letter of Credit issuing bank and subsequently pays the exporter after deducting the ujrah; and c) The amount of ujrah is agreed upon in advance and stated in nominal form, not as a percentage;
Banks may use the wakalah bil ujrah and qardh contracts, with the following provisions:
a) The bank handles export documents; b) The bank performs collection from the Letter of Credit issuing bank; c) The bank provides advance funds (qardh) to the exporting customer equivalent to the export goods price; d) The amount of ujrah is agreed upon in advance and stated in nominal form, not as a percentage; e) Payment of ujrah may be taken from the advance funds according to the agreement in the contract; and f) There must be no linkage (ta’alluq) between the wakalah bil ujrah contract and the qardh contract;
Banks may use the wakalah bil ujrah and mudarabah contracts, with the following provisions:
a) The bank provides the exporting customer with all funds needed in the production process of export goods ordered by the importer; b) The bank handles export documents; c) The bank performs collection from the Letter of Credit issuing bank; d) Payment by the Letter of Credit issuing bank may be made at sight (upon receipt of documents) or at usance (maturity); e) Payment from the Letter of Credit issuing bank may be used for payment of ujrah, repayment of mudarabah funds, and profit sharing; and f) The amount of ujrah is agreed upon in advance and stated in nominal form, not as a percentage;
Banks may use the musyarakah contract, with the following provisions:
a) The bank provides the exporting customer with part of the funds needed in the production process of export goods ordered by the importer; b) The bank handles export documents; c) The bank performs collection from the Letter of Credit issuing bank; Payment by the Letter of Credit issuing bank may be made at sight (upon receipt of documents) or at usance (maturity); and d) Payment from the Letter of Credit issuing bank may be used for repayment of musyarakah funds and/or profit sharing; and/or
Banks may use the albai’ and wakalah contracts, with the following provisions:
a) The bank purchases goods from the exporter; b) The bank sells goods to the importer represented by the exporter; c) The bank pays the exporter after the shipment of goods to the importer; and d) Payment by the Letter of Credit issuing bank may be made at sight (upon receipt of documents) or at usance (maturity).

e. Transfer of negotiable instruments without transfer of claim rights (transferable) may use the wakalah bil ujrah contract.

f. Negotiation financing without recourse for negotiable instrument documents may be carried out through subrogation mechanisms in accordance with Sharia Principles, with compensation or without compensation.

National Sharia Board Fatwa:
a. DSN-MUI Fatwa No. 35/DSN-MUI/IX/2002 concerning Sharia Export Letters of Credit (L/C). b. DSN-MUI Fatwa No. 60/DSN-MUI/V/2007 concerning Settlement of Receivables in Exports.
c. DSN-MUI Fatwa No. 104/DSN-MUI/X/2016 concerning Subrogation based on Sharia Principles.
d. DSN-MUI Fatwa No. 129/DSN-MUI/VII/2019 concerning Actual Costs as Ta’widh for Breach of Contract.

c. Trade Financing Services and Facilities Without Letter of Credit (L/C) or Negotiable Instruments
Definition:
The provision of trade financing services and facilities by the Bank to customers without L/C or negotiable instruments.
Contract:
Appropriate Sharia contracts.
Requirements:
Banks and customers shall formalize agreements for the issuance of L/C or negotiable instruments in written agreements or using forms or other formats that can be equated thereto, which are documented and may be conducted electronically based on mutual agreement in accordance with Sharia Principles and applicable regulations. Characteristics:
a. Banks may use 3 (three) types of service or financing schemes:

Advance payment;
Open account payment, such as invoice financing, account receivables/account payable financing; and/or
Collection basis, such as document against acceptance/document against payment financing.
In the case of using the collection basis scheme, the Bank must also refer to international and government regulations. b. The Bank may request collateral.
National Sharia Board Fatwa:
Relevant DSN-MUI Fatwa corresponding to the contract used.

Gold-Collateralized Qardh Financing
Definition:
Qardh financing with gold collateral bound by a rahn contract, where the pledged gold is stored and maintained by the Bank for a certain period with payment of storage and maintenance costs for the gold as the object of rahn. Contract:
a. qardh contract, for the binding of loan funds provided by the Bank; and b. rahn contract, for the binding of gold as collateral for the loan funds.
Requirements:
a. The purpose of use is to finance short-term cash needs and is not intended for gold investment purposes. b. The purpose of fund usage by the customer must be clearly stated on the product application form.
c. Costs that may be charged by the Bank to the customers include administrative fees, insurance fees, and storage and maintenance fees.
d. The determination of the amount of storage and maintenance costs for gold collateral is based on the weight of the gold collateral and is not linked to the amount of loan received by the customer. e. Income from the storage and maintenance of gold derived from gold-collateralized qardh products, where the source of funds comes from third-party funds, must be distributed to the depositing customer. f. Gold to be handed over as collateral for gold-collateralized qardh must already be owned by the customer at the time the financing application is submitted. g. The qardh-collateralized gold portfolio amount at the end of each month must be at most:

For Sharia commercial banks, the smaller amount between 20% (twenty percent) of the total financing provided or 150% (one hundred fifty percent) of the Bank's capital in accordance with Financial Services Authority Regulations regarding the minimum capital adequacy requirement for Sharia commercial banks; or
For Sharia business units, 20% (twenty percent) of the total financing provided.
h. Gold-collateralized qardh financing may be provided at most at IDR 250,000,000.00 (two hundred fifty million rupiah) for each customer, with a financing term of at most 4 (four) months.
i. Specifically for micro and small business customers, gold-collateralized qardh financing may be provided at most at IDR 100,000,000.00 (one hundred million rupiah), with a financing term of at most 18 (eighteen) months with monthly installments.
Characteristics:
The source of financing funds may come from equity, retained profits, and/or third-party funds.
National Sharia Board Fatwa:
a. DSN-MUI Fatwa No. 19/DSN-MUI/IV/2001 concerning Al-Qardh. b. DSN-MUI Fatwa No. 79/DSN-MUI/IV/2001 concerning Qardh Using Customer Funds.
c. DSN-MUI Fatwa No. 25/DSN-MUI/III/2002 Concerning Rahn.
d. DSN-MUI Fatwa No. 26/DSN-MUI/III/2002 Concerning Gold Rahn. e. DSN-MUI Fatwa No. 92/DSN-MUI/2014 Concerning Financing Accompanied by Rahn. f. DSN-MUI Fatwa No. 43/DSN-MUI/VIII/2004 Concerning Damages (Ta’widh).

Executing Financing Definition:
Financing with a cooperation scheme between the Bank and financial institutions where the receiving financial institution acts as the manager and obtains profit sharing from the management of those funds. The end customer is not recorded as a customer of the Bank. Contract:
Appropriate Sharia contracts.
Requirements and Characteristics:
Adjust to mudarabah financing.
Channeling Financing (Pass-through Financing)
Definition:
Financing with a cooperation scheme between the Bank and financial institutions where the receiving financial institution acts only as a manager and obtains remuneration or fee from the management of those funds, and the risks arising from this activity lie with the Bank as the party owning the funds. Contract:
Cooperation agreement between the Bank and partner financial institutions using the wakalah principle, while the financing contract provider to the end-user:
a. ijarah multijasa; b. murabahah;
c. MMQ;
d. IMBT; or e. other appropriate Sharia contracts.
Requirements:
a. The Bank has policies and procedures for risk mitigation. b. The Bank has adequate recording and account administration systems.
c. The contract between the Bank and end-user clearly states that the role of the partner financial institution is only as an intermediary.
d. The end-user knows that the financing is obtained from the Bank. e. The end-user is recorded as a customer of the Bank. f. The Bank has an audit mechanism for the implementation of financing, collateral administration, and end-user documentation. g. The financial institution has a system that can be verified by the Bank. h. Cooperation between the Bank and the financial institution is regulated in a cooperation agreement that reflects the rights and obligations of each party.
i. The cooperation agreement must contain the following clauses:

human resources of the financial institution have the ability to sell Sharia products;
risk determination based on Bank decisions;
audit mechanism;
in the event there are provisions regarding financing to value (FTV), then the maximum Bank financing value based on FTV;
end-user customer criteria;
standard document requirements; and
financing contract.
Characteristics:
The Bank provides the entire financing value to the end-user, and the partner financial institution acts as the agent for the Bank in managing the disbursement of financing to the end-user. National Sharia Board Fatwa:
a. DSN-MUI Fatwa No. 10/DSN-MUI/IV/2000 concerning Wakalah. b. DSN-MUI Fatwa No. 04/DSN-MUI/IV/2000 concerning Murabahah.
c. DSN-MUI Fatwa No. 27/DSN-MUI/III/2002 concerning al-Ijarah al-Muntahiyyah bi al-Tamlik.
d. DSN-MUI Fatwa No. 71/DSN-MUI/VII/2008 concerning Sale and Lease Back. e. DSN-MUI Fatwa No. 73/DSN-MUI/XI/2008 concerning Musyarakah Mutanaqisah. f. DSN-MUI Fatwa No. 114/DSN-MUI/IX/2017 concerning Akad Syirkah. g. DSN-MUI Fatwa No. 08/DSN-MUI/IV/2000 concerning Musyarakah Financing. h. DSN-MUI Fatwa No. 43/DSN-MUI/VIII/2004 Concerning Damages (Ta’widh).

Syndicated Financing Definition:
The provision of joint financing by a group of financiers to one customer, where the financing amount is generally too large if provided by a single financier alone. In a syndicated financing agreement, the Bank may act as arranger, underwriter, agent, or participant. Contract:
a. Among syndicate participants: mudarabah, musyarakah, wakalah bil ujrah, and other appropriate Sharia contracts. b. Between the syndicate entity and the customer: sales contracts, leasing (ijarah), musyarakah, and other appropriate Sharia contracts. Requirements:
a. Provisions related to accounts and contract documents:

in the event syndication is conducted among Sharia banks, then accounts, contract documents, and other supporting documents may be administered/compiled into a single document; or
in the event syndication is conducted between a Sharia bank and a conventional bank or other financial institution, then it must:
a) use separate financing accounts; and b) create a master document (joint agreement) which is then followed by documents specifically for the respective Sharia bank and separately for the conventional bank. b. The liability of syndicate participants is not joint and several, where each syndicate participant is only liable for the portion of the financing amount that is their commitment.
c. Banks and customers shall formalize financing agreements in writing and may also be done orally and through documented actions/conduct, and may be conducted electronically based on mutual agreement in accordance with Sharia Principles and applicable regulations.
Characteristics:
Financiers may consist of:
Sharia banks and banking (including conventional banks);
Sharia banks and non-bank financial institutions; or
Sharia banks and other institutions providing financing.
National Sharia Board Fatwa:
a. DSN-MUI Fatwa No. 91/DSN-MUI/IV/2014 concerning Syndicated Financing (Al-Tamwil Al-Mashrifi Al-Mujamma’). b. DSN-MUI Fatwa No. 43/DSN-MUI/VIII/2004 Concerning Damages (Ta’widh).
c. Relevant Fatwas concerning the contracts used.

Joint Financing (Joint Financing)
Definition:
Financing with a cooperation scheme between the Bank and financial institutions where the source of funds for this financing must come from the financial institution and the Bank, so that the risk becomes the burden of each party proportionally according to the amount of funds disbursed. Contract:
Cooperation agreement between the Bank and partner financial institutions using the wakalah or musyarakah/syirkah principle, while the financing contract provider (Bank and partner financial institution) to the end-user:
a. ijarah multijasa; b. murabahah;
c. MMQ;
d. IMBT; or e. other appropriate Sharia contracts.
Requirements:
a. The agreement between the Bank and end-user clearly states that the Bank and financial institutions act as financiers. The Bank has adequate recording and account administration systems. b. The end-user knows that financing is obtained from the financial institution and the Bank according to each party's share. The cooperation agreement between the Bank and partners clearly states the rights and obligations of each party.
c. The end-user is recorded as a Bank customer according to the Bank's share. The end-user knows that financing is obtained from the Bank in the amount of the share financed by the Bank.
d. The Bank has an audit mechanism for the implementation of financing, collateral administration, and end-user documentation. The end-user is recorded as a Bank customer according to the Bank's share. e. The financial institution has a system that can be verified by the Bank. f. Cooperation between the Bank and the financial institution is regulated in a cooperation agreement that reflects the rights and obligations of each party. g. The cooperation agreement must contain the following clauses:

human resources of the financial institution have the ability to sell Sharia products;
risk determination based on Bank decisions;
audit mechanism;
in the event there are provisions regarding FTV, then the maximum Bank financing value based on FTV;
end-user customer criteria;
standard document requirements; and
financing contract.
h. The financial institution must have recording and reporting systems identical to the Bank. The Bank has an audit mechanism for the implementation of financing. Characteristics:
a. The Bank and partner financial institutions provide their respective shares of financing to be disbursed to the end-user (e.g., Bank 90%: partner 10%). b. The Bank and partner financial institutions bear losses according to their financing share in joint financing.
c. Placement may be done in Indonesian Rupiah or foreign currency (specifically for foreign currency financing, this applies only to Banks and financial institutions that have received approval to conduct business activities in foreign currency).
d. The total value of financing provided to the end-user complies with FTV provisions. This applies to financing provided by the Bank to the end-user through employee cooperatives, multifinance companies, pension cooperatives, and similar businesses. National Sharia Board Fatwa:
a. DSN-MUI Fatwa No. 10/DSN-MUI/IV/2000 concerning Wakalah. b. DSN-MUI Fatwa No. 08/DSN-MUI/IV/2000 concerning Musyarakah Financing.
c. DSN-MUI Fatwa No. 04/DSN-MUI/IV/2000 concerning Murabahah.
d. DSN-MUI Fatwa No. 27/DSN-MUI/III/2002 concerning al-Ijarah al-Muntahiyyah bi al-Tamlik. e. DSN-MUI Fatwa No. 71/DSN-MUI/VII/2008 concerning Sale and Lease Back. f. DSN-MUI Fatwa No. 73/DSN-MUI/XI/2008 concerning Musyarakah Mutanaqisah. g. DSN-MUI Fatwa No. 114/DSN-MUI/IX/2017 concerning Akad Syirkah. h. DSN-MUI Fatwa No. 43/DSN-MUI/VIII/2004 Concerning Damages (Ta’widh).

Refinancing
Definition:
The provision of financing facilities to customers who already fully own assets or customers who have not yet settled previous financing.
Contract:
a. MMQ; b. Bai’ wal isti’jar; or
c. Bai’ in the context of MMQ.
Requirements:
a. Refinancing may only be performed for:

financing provided to prospective customers/customers who already fully own assets; and/or
financing provided to customers who have received financing that has not been paid off.
b. Refinancing provided to prospective customers/customers who already fully own assets as per item a.1) is given to prospective customers/customers who are currently in the process of applying for financing to the Bank.
c. In the event refinancing is provided to customers who have not yet settled previous financing, then the refinancing funds may be used by the customer to settle liabilities and/or debts from previous financing or to add financing facilities at the Bank.
d. In the event refinancing is provided to customers for additional financing (top up) based on property that remains as collateral for previous financing, then:
the additional financing (top up) is treated as new financing; and
the amount of additional financing (top up) provided must take into account the debit balance of previous financing using the same collateral.
i. Banks and customers shall formalize financing agreements in writing and may also be done orally and through documented actions/conduct, and may be conducted electronically based on mutual agreement in accordance with Sharia Principles and applicable regulations.
Characteristics:
a. The object of refinancing may be property, motor vehicles, or other assets. b. The Bank appraises the goods or assets of prospective customers to determine fair value.
c. There are 3 (three) mechanisms that can be used:
MMQ mechanism:
a) Prospective customer applies for financing to the Bank for refinancing purposes; b) The Bank appraises the goods or assets of prospective customers to determine a fair price, in order to determine the business capital included by the customer in syirkah with the Bank; c) The Bank includes funds in a certain amount to be used as business capital for syirkah with the customer, accompanied by the condition that the customer settles liabilities and/or debts from previous financing, if any; d) The Bank grants power of attorney (wakalah contract) to the customer to conduct lawful and good business, such as through the ijarah contract; e) The customer and the Bank share business profits according to the agreed ratio or capital share (proportional), and losses are shared according to capital share; and f) The customer commercially transfers the hishah owned by the Bank in installments according to the agreement.
al-bai' wa al-isti'jar mechanism (sale for lease):
a) Prospective customer who owns goods applies for financing to the Bank for refinancing purposes; b) The Bank purchases goods that belong to the customer using the bai' contract. This purchase may not be followed by a change in proof of ownership of the goods; c) The customer settles liabilities and/or debts from previous financing, if any; d) The Bank and customer perform the IMBT contract; and e) Transfer of ownership of the leased object to the customer may only be done via hibah (gift) contract when the ijarah contract ends. This hibah may not be followed by a change in proof of ownership.
al-bai' mechanism for MMQ:
a) Prospective customer who owns goods applies for financing to the Bank for refinancing purposes; b) The Bank appraises the goods or assets of prospective customers to determine a fair price, in the partial purchase by the Bank; c) The Bank purchases (using the al-bai’ contract) part of the goods from the customer, resulting in syirkah over the goods for the formation of business capital syirkah; d) The customer settles liabilities and/or debts from previous financing, if any; and e) The Bank and customer perform the MMQ contract with capital in the form of goods expressed in hishah/unit hishah. National Sharia Board Fatwa:
a. DSN-MUI Fatwa No. 27/DSN-MUI/III/2002 concerning al-Ijarah al-Muntahiyyah bi al-Tamlik. b. DSN-MUI Fatwa No. 71/DSN-MUI/VII/2008 concerning Sale and Lease Back.
c. DSN-MUI Fatwa No. 73/DSN-MUI/XI/2008 concerning Musyarakah Mutanaqisah.
d. DSN-MUI Fatwa No. 89/DSN-MUI/XII/2013 concerning Sharia Refinancing. e. DSN-MUI Fatwa No. 114/DSN-MUI/IX/2017 concerning Akad Syirkah. f. DSN-MUI Fatwa No. 43/DSN-MUI/VIII/2004 Concerning Damages (Ta’widh).

Debt Transfer/Payment
Definition:
The transfer of customer debt from conventional financial institutions to the Bank and/or the transfer of customer financing from Sharia financial institutions to the Bank. Contract:
Appropriate Sharia contracts.
Requirements:
a. In the event of transfer of customer debt from conventional financial institutions to the Bank, then:

the customer is a customer who has credit from a conventional financial institution wishing to transfer their debt to the Bank;
the credit to be transferred has underlying assets that do not contradict Sharia Principles; and
the credit to be transferred has a purpose of use that does not contradict Sharia Principles.
b. In the event of transfer of customer financing from Sharia financial institutions to the Bank, then the customer is a customer who has financing from a Sharia financial institution wishing to transfer their financing to the Bank.
c. In the event debt transfer or financing transfer is provided to customers for property financing, then:
Financing that is solely intended for the settlement of credit at previous conventional financial institutions or settlement of financing at previous Sharia financial institutions is not treated as new financing; or
Financing accompanied by a top-up is treated as new financing, thus subject to refinancing requirements.
j. Banks and customers shall formalize agreements in writing and may also be done orally and through documented actions/conduct, and may be conducted electronically based on mutual agreement in accordance with Sharia Principles and applicable regulations. Characteristics:
a. In the event of transfer of customer debt from conventional financial institutions to the Bank:
alternative 1

a) The Bank provides qardh loans to customers to settle the customer's credit at a conventional financial institution, so that the assets purchased with such credit become fully owned by the customer; b) The customer sells such assets to the Bank, and the proceeds from the sale are used to settle the qardh loan; c) The Bank sells the assets that have become the Bank's property to the customer via murabahah with installment payments; and d) Fulfill the requirements for qardh financing and murabahah financing;

Alternative 2
a) The Bank, with the consent of the conventional financial institution, purchases a portion of the customer's assets financed by the conventional financial institution, resulting in joint ownership between the Bank and the customer regarding such assets; b) The portion of the assets purchased by the Bank is the portion equivalent to the remaining debt (remaining credit) of the customer to the conventional financial institution; c) The Bank sells the portion of the assets it has acquired to the customer via murabahah with installment payments; and d) Fulfill the requirements for murabahah financing;
Alternative 3
a) In the process of obtaining full ownership of the assets, the customer can enter into an ijarah contract with the Bank; b) If necessary, the Bank can assist in covering the customer's obligations by providing a qardh loan; c) The ijarah contract as referred to in letter a) cannot be conditioned on the provision of assistance as referred to in letter b); d) The amount of ijarah service remuneration as referred to in letter a) must not be based on the amount of assistance provided by the Bank to the customer as referred to in letter b); and e) Fulfill the requirements for ijarah financing and/or qardh financing;
Alternative 4
a) The Bank provides qardh to the customer to settle the credit, thus the assets purchased with the credit become fully owned by the customer; b) The customer sells such assets to the Sharia Bank, and the proceeds from the sale are used to settle the qardh loan; c) The Sharia Bank leases the assets that have become the Bank's property to the customer under an IMBT contract; and d) Fulfill the requirements for IMBT financing and qardh financing;
Alternative 5
a) A customer who still has credit at a conventional financial institution submits an application for debt transfer to the Bank under an MMQ contract; b) The Bank and the customer enter into an MMQ contract with the stipulation that the Bank and the customer contribute business capital equivalent to the agreement between the Bank and the customer; c) The customer settles their credit with the conventional financial institution; d) The customer leases goods that are the object of the partnership (musyarakah) under an ijarah contract and/or the customer and the Bank conduct business activities with third parties in the form of:
i. leasing business activities;
ii. sales and purchase business activities; and/or
iii. profit-sharing business activities;
e) The Bank and the customer share income from the activities as regulated in letter d); and f) The customer purchases the Bank's partnership capital share (hishshah) gradually according to the agreed schedule;
Alternative 6
a) A customer who still has credit at a conventional financial institution submits an application for debt transfer to the Bank; b) After approving the customer's application, the Bank enters into a hawalah bi alujrah contract and pays part or all of the customer's debt to the conventional financial institution at an agreed time; c) The customer pays ujrah to the Bank for the hawalah service; and d) The customer settles their obligations arising from the hawalah contract to the Bank, either in cash or deferred/installments according to the agreement; or
Alternative 7
In the event that debt transfer uses the refinancing financing method, it refers to the debt transfer point.

Alternatives 6 and 7 can be used for the takeover of working capital that does not have an underlying asset as referred to in Alternatives 1 through 5. The customer provides part of the funds for the working capital transfer in the event of transfer using the musyarakah contract; these funds become the customer's musyarakah capital contribution.

b. In the event of transferring the customer's financing from a Sharia financial institution to the Bank:

Alternative 1 using the hawalah bil ujrah contract
a) A customer who has murabahah financing debt at a Sharia financial institution submits an application for debt transfer to the Bank; b) After approving the customer's application, the Bank enters into a hawalah bi alujrah contract and pays part or all of the customer's debt to the Sharia financial institution at an agreed time; c) The customer pays ujrah to the Bank for the hawalah service; and d) The customer settles their obligations arising from the hawalah contract to the Bank, either in cash or deferred/installments according to the agreement;
Alternative 2 using the IMBT contract
a) A customer who has murabahah financing debt at a Sharia financial institution submits an application for debt transfer to the Bank under an IMBT contract; b) After approving the customer's application, the Bank purchases the customer's assets purchased under the murabahah contract from the Sharia financial institution, with the promise that the object will be leased by the customer under an IMBT contract; c) The Bank and the customer enter into an IMBT contract; and d) The customer settles their murabahah financing debt to the Bank;
Alternative 3 using the MMQ contract
a) A customer who has murabahah financing debt at a Bank or Sharia financial institution submits an application for debt transfer to the Bank under an MMQ contract; b) The Bank and the customer enter into an MMQ contract with the stipulation that the Bank contributes business capital equivalent to the customer's remaining debt to the Bank or Sharia financial institution, and the customer contributes business capital in the form of goods whose value is equal to part of their debt already paid to the Bank; and c) The customer settles their murabahah financing debt to the Bank; d) The customer leases goods that are the object of the partnership (musyarakah) under an ijarah contract; and e) The customer purchases the Bank's partnership capital share (hishshah) gradually; or
Alternative 4
a) A customer who still has financing at a Sharia financial institution submits an application for working capital transfer to the Bank; b) After approving the customer's application, the Bank enters into a mudarabah or musyarakah contract with the customer; c) The customer provides part of the funds for the working capital transfer in the event of transfer using the musyarakah contract; these funds become the customer's musyarakah capital contribution; and d) The Bank disburses working capital to the customer.

Alternative 4 can only be used for the takeover of working capital that does not have an underlying asset as referred to in Alternatives 1 through 3.

III. Basic Bank Products that are Other Simple Activities

No.	Bank Product	Definition and General Characteristics
1.	Sale and Purchase of Foreign Banknotes (Banknotes)	Definition:<br>The activity of selling or purchasing foreign banknotes.<br><br>Contract:<br>Sharf.<br><br>Requirements:<br>a. Not conducted for speculative purposes.<br>b. There is a transaction need or for precaution (savings).<br>c. The applicable exchange rate (kurs) is the rate at the time the transaction is conducted.<br>d. Money exchange transactions for different types of currencies (foreign currency) can only be conducted in the form of spot transactions.<br>e. In the event that money exchange transactions are conducted against different types of currencies in money changer activities, the transaction must be conducted in cash with the exchange rate applicable at the time of the transaction.<br><br>Characteristics:<br>a. The Bank can act as either the party receiving the exchange or the party exchanging money from/to the customer.<br>b. The sale and purchase of foreign banknotes can be conducted in cash or through account debiting.<br><br>DSN-MUI Fatwa:<br>Fatwa DSN-MUI Number 28/DSNMUI/III/2002 concerning Sale and Purchase of Currency (Al-Sharf).
2.	Agent for Selling Sharia Securities Issued by the Government	Definition:<br>The Bank acts as a sales agent/distribution partner for Sharia securities issued by the government to its customers, including the sale of National Sharia Securities (SBSN).<br><br>Contract:<br>Appropriate Sharia contract.<br><br>Requirements:<br>The Bank fulfills regulatory and related provisions.<br><br>DSN-MUI Fatwa:<br>a. Fatwa DSN-MUI Number 69/DSNMUI/VI/2008 concerning State Sharia Securities.<br>b. Fatwa DSN-MUI Number 70/DSNMUI/VI/2008 concerning Issuance Methods for State Sharia Securities.
3.	Sale and Purchase of Sharia Securities	Definition:<br>Sale and purchase of Sharia securities whether issued by the government, Bank Indonesia, corporations, and foreign parties in accordance with applicable regulations.<br><br>Contract:<br>Appropriate Sharia contract.<br><br>Requirements:<br>a. Securities based on Sharia Principles (not debt-based securities with interest).<br>b. For Sharia securities issued by the government, they must fulfill Sharia Principles and applicable regulations regarding the transaction procedures for government Sharia securities and the administration of government Sharia securities.<br>c. For the purchase of corporate Sharia securities, the business activities conducted by the issuer of the Sharia securities must not contradict Sharia Principles.<br>d. The underlying asset of the Sharia securities must not contradict Sharia Principles.<br><br>Characteristics:<br>Sale and purchase of securities are conducted in the financial market as regulated in related provisions, both in Rupiah and other foreign currencies.<br><br>DSN-MUI Fatwa:<br>a. Fatwa DSN-MUI Number 32/DSNMUI/IX/2002 concerning Sharia Bonds.<br>b. Fatwa DSN-MUI Number 33/DSNMUI/IX/2002 concerning Mudarabah Sharia Bonds.<br>c. Fatwa DSN-MUI Number 40/DSNMUI/X/2003 concerning Capital Market and General Guidelines for Applying Sharia Principles in the Capital Market Sector.<br>d. Fatwa DSN-MUI Number 41/DSNMUI/III/2004 concerning Ijarah Sharia Bonds.<br>e. Fatwa DSN-MUI Number 59/DSNMUI/V/2007 concerning Convertible Mudarabah Sharia Bonds.<br>f. Fatwa DSN-MUI Number 69/DSNMUI/VI/2008 concerning State Sharia Securities.<br>g. Fatwa DSN-MUI Number 70/DSNMUI/VI/2008 concerning Issuance Methods for State Sharia Securities.<br>h. Fatwa DSN-MUI Number 72/DSNMUI/VI/2008 concerning State Sharia Securities Ijarah Sale And Lease Back.<br>i. Fatwa DSN-MUI Number 76/DSNMUI/VI/2010 concerning SBSN Ijarah Asset to be Leased.<br>j. Fatwa DSN-MUI Number 94/DSNMUI/IV/2014 concerning Repo of Sharia Securities (SBS) Based on Sharia Principles.<br>k. Fatwa DSN-MUI Number 95/DSNMUI/VII/2014 concerning SBSN Wakalah.<br>l. Fatwa DSN-MUI Number 110/DSNMUI/IX/2017 concerning Sales Contracts.<br>m. Fatwa DSN-MUI Number 124/DSNMUI/XI/2018 concerning the Application of Sharia Principles in the Implementation of Securities Storage and Settlement Services and the Management of Integrated Investment Infrastructure.
4.	Fund Transfer	Definition:<br>The Bank conducts fund transfer activities consisting of a series of activities starting with an order from the originator intended to transfer a certain amount of funds to the recipient specified in the fund transfer order until the funds are received by the recipient.<br><br>Contract:<br>Wakalah bil Ujroh.<br><br>Requirements:<br>a. The Bank fulfills regulations governing fund transfers.<br>b. The Bank has an adequate fund transfer organization system, related to system security, capital, management integrity, risk management, and/or readiness of facilities and infrastructure.<br><br>Characteristics:<br>a. Fund transfers can be conducted through:<br>1) BI-Real Time Gross Settlement (RTGS) system;<br>2) Bank Indonesia National Clearing System (SKNBI); or<br>3) Card Payment Instrument (APMK) organizers providing fund transfer services.<br>b. The Bank may charge fund transfer fees considering fairness aspects.<br><br>DSN-MUI Fatwa:<br>Fatwa DSN-MUI Number 10/DSNMUI/IV/2000 concerning Wakalah.
5.	Sharia Financing Card	Definition:<br>A Card Payment Instrument (APMK) that can be used to make payments for obligations arising from economic activities, including shopping transactions and/or for cash withdrawals, where the cardholder's payment obligation is first fulfilled by the issuer, and the cardholder is obligated to make payment at an agreed time, either with full settlement (charge card) or with installment payments.<br>Cards that function like credit cards, where the legal relationship (based on existing systems) between parties is based on Sharia Principles as regulated in fatwas.<br><br>Contract:<br>a. Kafalah;<br>b. Ijarah; and<br>c. Qardh.<br><br>Requirements:<br>a. Not used for transactions inconsistent with Sharia Principles.<br>b. Does not encourage excessive spending by setting spending limits.<br><br>Characteristics:<br>a. The Bank as the card issuer acts as the guarantor (kafil) for the cardholder against merchants for all payment obligations arising from transactions between the cardholder and merchants, and/or cash withdrawals from Banks or ATMs other than the card issuer's Bank. For the provision of kafalah, the Bank may receive a fee (ujrah kafalah).<br>b. The Bank acts as the lender to the cardholder through cash withdrawals from the Bank or the Bank's ATM.<br>c. The Bank may receive ujroh for providing payment system services and services to cardholders in the form of membership fees.<br>d. The Bank may receive merchant fees from the price of transaction objects or services as remuneration for intermediation, marketing, and collection.<br>e. The Bank may receive fees from cardholders for the provision of kafalah.<br>f. The Bank may charge ta’widh (compensation) for costs incurred by the Bank.<br>g. The Bank may charge late payment penalties, which will be recognized entirely as social funds.<br><br>DSN-MUI Fatwa:<br>a. Fatwa DSN-MUI Number 54/DSNMUI/X/2006 concerning Sharia Card.<br>b. Fatwa DSN-MUI Number 11/DSNMUI/IV/2000 concerning Kafalah.<br>c. Fatwa DSN-MUI Number 43/DSNMUI/VIII/2004 concerning Compensation (Ta’widh).
6.	Electronic Money	Definition:<br>A payment instrument that fulfills the following elements:<br>a. Issued based on the value of money deposited in advance to the issuer;<br>b. The money value is stored electronically in a server media or chip; and<br>c. The electronic money value managed by the issuer is not a deposit as referred to in the Banking Law.<br><br>Contract:<br>a. Wadi’ah.<br>b. Qardh.<br><br>Requirements:<br>a. The Bank has the ability to manage float funds in accordance with regulatory provisions regarding electronic money.<br>b. The Bank has a system and mechanism for recording float funds.<br>c. The Bank has a system and mechanism for monitoring float fund availability.<br>d. The Bank must ensure timely fulfillment of obligations.<br>e. The Bank may record float funds separately from the recording of other obligations held by the issuer.<br>f. The Bank places float funds in accounts separate from operational accounts, and the Bank managing float funds may use these funds in accordance with regulations.<br>g. The Bank is not permitted to promise remuneration or bonuses to customers.<br>h. In the event that the card used as electronic money media is lost, the nominal amount of money at the issuer must not be lost.<br>i. For registered electronic money users, the Bank and the user may formalize their agreement on the use of electronic money in the form of a written agreement/form/other form equivalent to it, whereas for unregistered electronic money, there is no written agreement between the Bank and the user.<br>j. Float funds are not guaranteed by LPS.<br>k. The nominal amount of electronic money at the issuer must be placed in a Sharia Bank.<br>l. In the event of card loss, the Bank may conduct a lost card replacement process if the user fulfills all requirements set by the Bank at the time of card replacement.<br><br>DSN-MUI Fatwa:<br>Fatwa DSN-MUI No: 116/DSNMUI/IX/2017 concerning Sharia Electronic Money.
7.	Safe Deposit Box (SDB)	Definition:<br>A service for renting storage boxes for valuables or securities in the Bank's vault.<br><br>Contract:<br>Ijarah.<br><br>Requirements:<br>a. Items stored in the SDB are valuable items that are not prohibited and not banned by the state.<br>b. The Bank and the customer formalize the agreement on the use of the SDB in a written agreement and can also be done orally and documented actions/conduct, and can be conducted electronically based on the agreement of the parties in accordance with Sharia Principles and regulatory provisions.<br>c. The Bank has a vault room according to security standards.<br><br>Characteristics:<br>a. The Bank may charge rental fees for the use of the SDB according to the agreement.<br>b. The Bank may add loss insurance protection.<br><br>DSN-MUI Fatwa:<br>Fatwa DSN-MUI Number 24/DSNMUI/III/2002 concerning Safe Deposit Box.
8.	Traveller’s Cheque (TC)	Definition:<br>Issuance of travel cheques that can be used as a payment instrument.<br><br>Contract:<br>Wakalah/wadi’ah.<br><br>Requirements:<br>a. The Bank fulfills regulations governing cheques and other related regulatory provisions.<br>b. The customer completes the purchase or sale form for TCs.<br>c. The customer signs the TC in front of the teller.<br><br>Characteristics:<br>a. The Bank may replace lost TCs according to Bank policy if the TC holder reports the loss of the TC and requests replacement from the Bank.<br>b. The Bank may issue TCs in Rupiah and/or foreign currency (specifically for opening in foreign currency, this only applies to Banks that have received approval to conduct business activities in foreign currency).<br><br>DSN-MUI Fatwa:<br>a. Fatwa DSN-MUI Number 02/DSNMUI/IV/2000 concerning Savings.<br>b. Fatwa DSN-MUI Number 10/DSNMUI/IV/2000 concerning Wakalah.
9.	Cash Management	Definition:<br>A cash management service or facility provided to customers who have deposits at the Bank, where each transaction is conducted based on the customer's order.<br>In this case, the Bank is only permitted to act as the party making payments (paying agent) based on the customer's order and is not permitted to act as an investment agent (investment agent) for customer funds, either conventionally and/or based on Sharia Principles.<br>Cash management services may include payroll and cash pick up and delivery.<br><br>Contract:<br>Appropriate Sharia contract.
10.	Prime Customer Service	Definition:<br>Services or facilities related to products with specific privileges for prime customers.<br><br>Contract:<br>Appropriate Sharia contract.
11.	Foreign Exchange Transaction - Spot	Definition:<br>An agreement to buy/sell foreign currency in cash with delivery or settlement of the transaction not exceeding 2 (two) working days.<br><br>Contract:<br>Sharf.<br><br>Requirements:<br>a. Foreign exchange – spot transactions are not conducted for speculative purposes.<br>b. Foreign exchange – spot transactions are conducted due to transaction needs or for precaution (savings).<br>c. The applicable exchange rate (kurs) is the rate at the time the transaction is conducted.<br>d. Money exchange transactions for different types of currencies (foreign currency) can only be conducted in the form of spot transactions.<br>e. In the event that money exchange transactions are conducted against different types of currencies in money changer activities, the transaction must be conducted in cash with the exchange rate (kurs) applicable at the time of the transaction.<br><br>Characteristics:<br>a. The Bank can act as either the party receiving the exchange or the party exchanging money from/to the customer.<br>b. The sale and purchase of foreign banknotes can be conducted in cash or through account debiting.<br><br>DSN-MUI Fatwa:<br>Fatwa DSN-MUI Number 28/DSNMUI/III/2002 concerning Sale and Purchase of Currency (Al-Sharf).
12.	Sharia Hedging Transaction on Exchange Rates	Definition:<br>Hedging transactions conducted based on Sharia Principles to mitigate the risk of exchange rate changes for certain currencies in the future. Hedging transactions can be conducted through simple hedging mechanisms ('aqd al tahawwuth al-basith) or complex hedging mechanisms ('aqd al tahawwuth al murakkab).<br><br>Contract:<br>a. ‘Aqd al tahawwuth al-basith.<br>b. ‘Aqd al tahawwuth al murakkab.<br><br>Requirements:<br>a. Simple hedging transactions are hedging transactions with a forward agreement scheme followed by a spot transaction at maturity, with settlement being the handover of currencies.<br>b. Complex hedging transactions are hedging transactions with a scheme consisting of a series of spot and forward agreement transactions followed by a spot transaction at maturity, with settlement being the handover of currencies.<br>c. Simple Sharia hedging transactions on exchange rates are not intended for speculative purposes (gambling).<br>d. Simple Sharia hedging transactions on exchange rates can only be conducted due to a real need in the future for foreign currency that cannot be avoided (li al-hajah) resulting from a valid transaction in accordance with applicable regulations with a halal transaction object.<br>e. The exercise right of muwa'adah in the hedging mechanism cannot be bought and sold.<br>f. Sharia hedging transactions on exchange rates can only be conducted to reduce risks from:<br>1) exposure to risks faced by the Bank due to an imbalance in asset and liability positions in domestic and foreign currencies;<br>2) exposure to risks faced by the Bank due to an imbalance in asset and liability positions in foreign currencies; and/or<br>3) obligations or receivables in foreign currency arising from activities consistent with Sharia Principles and regulatory provisions, namely:<br>a) trade in goods and services domestically and internationally; and<br>b) investments in the form of direct investment, loans, capital, and other investments domestically and internationally.<br>g. The exchange rate or calculation of the exchange rate must be agreed upon at the time of mutual promise (muwa'adah).<br>h. Settlement of hedging transactions, involving the handover of currencies at maturity, must be conducted fully (full commitment). Settlement of transactions via muqashshah (netting) is only permitted in the event of transaction extension (roll-over), transaction acceleration (roll-back), or transaction cancellation caused by changes in the hedging object.<br>i. The hedging mechanism is as follows:<br>1) Simple hedging:<br>a) The parties mutually promise (muwa'adah), whether in writing or not, to conduct one or more spot transactions in the future, including agreements on:<br>i. the currency being traded;<br>ii. the nominal amount;<br>iii. the exchange rate or calculation of the exchange rate; and<br>iv. the time of execution; and<br>b) At the time of execution, the
parties conduct a spot transaction (ijab-qabul) at the agreed price, followed by the handover of the exchanged currencies.<br>2) Complex hedging:<br>a) The parties conduct a spot transaction;<br>b) The parties mutually promise (muwa'adah), whether in writing or not, to conduct one or more spot transactions in the future...

DSN-MUI Fatwas: a. DSN-MUI Fatwa Number 31/DSNMUI/VI/2002 concerning Debt Transfer. b. DSN-MUI Fatwa Number 04/DSNMUI/IV/2000 concerning Murabahah.
c. DSN-MUI Fatwa Number 09/DSNMUI/IV/2000 concerning Ijarah Financing.
d. DSN-MUI Fatwa Number 27/DSNMUI/III/2002 concerning Al-Ijarah Al-Muntahiyah Bi Al-Tamlik Financing. e. DSN-MUI Fatwa Number 90/DSNMUI/III/2002 concerning Transfer of Murabahah Financing between Sharia Financial Institutions. f. DSN-MUI Fatwa Number 89/DSNMUI/XII/2013 concerning Sharia Refinancing Financing.

transactions including agreements on:
i. the currency traded;
ii. the nominal amount;
iii. the exchange rate or exchange rate calculation; and
iv. the execution time; and
c) at the time of execution, the parties conduct a spot transaction (ijab-qabul) at the agreed price, followed by the handover of the exchanged currencies.
Characteristics:
a. Sharia hedging transactions on exchange rates can be conducted by:

Islamic Financial Institutions (LKS);
Conventional Financial Institutions, but only as recipients of hedging from LKS, where LKS acts as the initiator for squaring purposes;
Bank Indonesia;
Business entities that do not conflict with Sharia Principles; and/or
Other parties, including foreign parties, in accordance with applicable laws and regulations.
b. In the event that the forward agreement is not fulfilled, the party failing to fulfill it may be subject to compensation (ta’widh).

Fatwa of the National Sharia Board (DSN-MUI):
a. DSN-MUI Fatwa No. 28/DSN-MUI/III/2002 concerning Sale and Purchase of Currency (Al-Sharf). b. DSN-MUI Fatwa No. 85/DSN-MUI/XII/2012 concerning Promise (Wa’d) in Islamic Finance and Business Transactions.
c. DSN-MUI Fatwa No. 96/DSN-MUI/IV/2015 concerning Al – Tahawwuth Al Islami Hedging.
d. DSN-MUI Fatwa No. 129/DSN-MUI/VII/2019 concerning Real Costs as Ta’widh Due to Breach of Contract.

Digital Financial Services
Definition:
Payment and financial service services conducted by Banks issuing electronic money through cooperation with third parties, utilizing mobile-based and web-based technology infrastructure for inclusive finance. Contract:
Appropriate Sharia contract.
Marketing Cooperation for Insurance Products (Bancassurance)
Definition:
The Bancassurance reference business model is a cooperation for marketing insurance products, with the Bank acting only to refer or recommend a specific insurance product to customers. The Bank's role in marketing is limited to acting as an intermediary in forwarding insurance product information from the Bank's partner insurance company to customers, or providing access to the insurance company to offer insurance products to customers.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja
Established in Jakarta on July 30, 2021

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed

WIMBOH SANTOSO

APPENDIX III
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 /POJK.03/2021
CONCERNING
IMPLEMENTATION OF GENERAL BANK PRODUCTS

Diagram 1a. General Bank Product Implementation Process Flow

Diagram 1b. General Bank Product Implementation Process Flow (continued)

Diagram 2. Basic New General Bank Product Implementation Process Flow *) T = Year of planned implementation of the Bank Product.

Diagram 3. Advanced New General Bank Product Implementation Process Flow with Limited Pilot Project (Piloting Review) *) T = Year of planned implementation of the Bank Product. *) Financial Services Authority does not issue a confirmation letter to the Bank regarding the submitted report. *) Example: Bank BMD obtained permission to implement the advanced new Bank Product on August 31, 2021. The Bank must implement the advanced new Bank Product for which permission was obtained no later than February 28, 2022.

Diagram 4. Advanced New General Bank Product Implementation Process Flow without Limited Pilot Project *) T = Year of planned implementation of the Bank Product.
*) Example: Bank NST obtained permission to implement the advanced new Bank Product on August 31, 2021. The Bank must implement the advanced new Bank Product for which permission was obtained no later than February 28, 2022.

Diagram 5. Advanced New General Bank Product Implementation Process Flow - Instant Approval *) T = Year of planned implementation of the Bank Product.
*) In the event that there are no further responses from the supervisor, the Bank may implement the Bank Product. The Financial Services Authority may request the Bank to continue the licensing process as per Diagram 3 or Diagram 4 based on specific considerations. *) Example: Bank LGP obtained permission to implement the advanced new Bank Product on August 31, 2021. The Bank must implement the advanced new Bank Product for which permission was obtained no later than February 28, 2022.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja
Established in Jakarta on July 30, 2021

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

signed

WIMBOH SANTOSO

APPENDIX IV
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 /POJK.03/2021
CONCERNING
IMPLEMENTATION OF GENERAL BANK PRODUCTS

I. Format of Bank Product Implementation Plan
BANK PRODUCT IMPLEMENTATION PLAN
BANK ________________________
No.
Type
New Bank Product 1)
Planned Implementation Time 2)
Objectives/Benefits
Connection of New Bank Product with Bank Strategy General Description 3) Risks That May Arise Risk Mitigation upon Issuance of New Bank Product Planned Mechanism for Implementation of New Bank Product to be Followed 4) For the Bank For Customers Notes:

Type of Bank Product is filled with the type of product to be implemented. Examples: savings, credit and/or financing, mobile banking, bancassurance, and others.
Filled with the time period, date, month name, or quarter.
General description must at least describe, among other things, the product name, features, and business model of the Bank Product.
Filled with:
a) “0” for Basic New Bank Product, or b) “permission with limited pilot”/”permission without pilot”/ “permission with notification” for Advanced New Bank Product. For the implementation mechanism of Advanced New Bank Product without pilot or permission with notification, it must be accompanied by underlying reasons. If necessary, more detailed explanations/descriptions can be attached on a separate sheet.

II. Authorization Request Documents for Implementation of Advanced New Bank Product / Notification Request for Implementation of Advanced New Bank Product / Supporting Documents for Realization of Basic New Bank Product 1)2)
AUTHORIZATION REQUEST FOR IMPLEMENTATION OF ADVANCED NEW BANK PRODUCT / NOTIFICATION OF IMPLEMENTATION OF ADVANCED NEW BANK PRODUCT / REALIZATION OF IMPLEMENTATION OF BASIC NEW BANK PRODUCT BANK : ______________________________________________ YEAR : ______________________________________________

Documents containing general information regarding the New Bank Product, at least containing:
a. name of the New Bank Product; b. type of New Bank Product;
c. implementation time of the New Bank Product;
d. target market; e. planned/target transaction value in the first (1) year; and f. information regarding the scheme, features, business model, or characteristics of the New Bank Product.
Documents containing information regarding the benefits, costs, and risks of the New Bank Product, at least containing:
a. benefits and costs for the Bank; and b. benefits and risks for customers.
Documents containing implementation procedures (Standard Operating Procedures) of the organization and authority to implement the New Bank Product.
Documents containing policies and procedures related to the implementation of the Anti-Money Laundering and Counter-Financing of Terrorism (APU and PPT) program.
Documents containing the identification, measurement, monitoring, and control of risks inherent in the New Bank Product.
Documents containing the results of legal and compliance aspect analysis of the New Bank Product, including in relation to consumer protection aspects.
Documents containing explanations of the Accounting Information System (AIS), including accounting records, and explanations of the connection of this AIS with the Bank's overall AIS and/or accounting recording systems.
Documents explaining operational readiness aspects, including human resources and information technology, and the results of the Bank's pilot tests (if any) on the New Bank Product. 3)
Sharia opinion from the Sharia Supervisory Board regarding the New Bank Product for Islamic General Banks and Sharia Business Units.
Supporting documents (attached) 4):
a. ….. b. ….. et c.
Notes:

The number of pages is not binding; the Bank can elaborate in more detail according to the characteristics of the New Bank Product.
For document requirements for New Bank Products regulated specifically in Financial Services Authority Regulations, the submission of documents refers to the relevant provisions.
Readiness and results of limited pilot tests must be attached if the New Bank Product is implemented through an authorization request process via a limited pilot project.
Supporting documents include, among others, documents on transparency to customers, agreements, approvals from relevant authorities, or copies of proof of request for approval or license from relevant authorities, and documents required in the proof of concept process for pilot projects. For Islamic General Banks and Sharia Business Units, the concept of contract/agreement/application forms is attached with opinions from the legal work unit stating that the concept of contract/agreement/application forms is in accordance with applicable regulations.

III. Format of Bank Statement Regarding Implementation of Advanced New Bank Product
BANK STATEMENT
We, the undersigned below, Compliance Director and Director …………………… from:
Bank Name : ................................................................
Address : ................................................................
Telephone : ................................................................
in the context of implementing the New Bank Product:
Product Name : ................................................................
hereby state truthfully that:

the authorization request/notification along with all authorization request/notification documents submitted to the Financial Services Authority are complete and in accordance with the requirements stipulated in applicable laws and regulations;
the submitted authorization request/notification does not contain untrue or misleading statements, information, or facts;
all processes of implementing the Bank Product are conducted in accordance with applicable laws and regulations;
we have understood all risks related to the Bank Product we implement;
we are committed to applying prudence principles and consumer protection principles in implementing the Bank Product we apply for;
we, as Board of Directors members, are responsible for all consequences arising from the implementation of the limited pilot project for the Bank Product *); and
In the event that it is later discovered that the submitted data and/or information do not meet the provisions of the Financial Services Authority Regulation regarding the implementation of general bank products and/or are untrue and/or do not correspond to the actual facts, we are willing to be subject to sanctions in accordance with applicable laws and regulations.

……..…….. (place) , ………. (date, month, year)
Compliance Director Director ……………..
....................................... .....................................
(clear name and signature) (clear name and signature) *) only included if the Bank applies for authorization to implement the Advanced New Bank Product with a limited pilot project.

IV. Format of Bank Statement Regarding Report on Plan for Limited Pilot Project Implementation
BANK STATEMENT
We, the undersigned below, Compliance Director and Director …………………… from:
Bank Name : ................................................................
Address : ................................................................
Telephone : ................................................................
in the context of implementing the limited pilot project for the New Bank Product:
Product Name : ................................................................
hereby state truthfully that:

the submitted report on the plan for implementing the limited pilot project is true and will be used as the basis for executing the limited pilot project;
all processes of implementing the limited pilot project are conducted in accordance with applicable laws and regulations;
we are committed to applying prudence principles and consumer protection principles in executing the limited pilot project for the Bank Product we report, including transparency aspects to the target test group regarding the limited pilot project;
we, as Board of Directors members, are responsible for all consequences arising from the implementation of the limited pilot project for the Bank Product;
In the event that it is later discovered that the submitted data and/or information do not meet the provisions of the Financial Services Authority Regulation regarding the implementation of general bank products and/or are untrue and/or do not correspond to the actual facts, we are willing to be subject to sanctions in accordance with applicable laws and regulations.

……..…….. (place) , ………. (date, month, year)
On behalf of the Board of Directors of……
Compliance Director
.......................................
(clear name and signature)

V. Format of Report on Realization of Bank Product Discontinuation
REPORT ON REALIZATION OF BANK PRODUCT DISCONTINUATION BANK ________________________ No. Bank Product Name Time Discontinuation 1) Reasons for Discontinuation of Bank Product Follow-up Actions on Discontinuation of Bank Product 2) Notes:

Filled with the time period, date, month name, or quarter.
Filled with explanations of the steps to be taken to settle or transfer all obligations to customers and other parties.
If necessary, more detailed explanations/descriptions can be attached on a separate sheet.

VI. Format of Authorization Request/Activity Report for the Bank's Own Interest
AUTHORIZATION REQUEST / ACTIVITY EXECUTION REPORT FOR THE BANK'S OWN INTEREST BANK ________________________ No.
Type of Bank Activity
Time
Implementation 1)
Objectives/Benefits for the Bank
Risks
That May Arise
Risk Mitigation for Activities for the Bank's Interest Notes:

Filled with the time period, date, month name, or quarter.
If necessary, more detailed explanations/descriptions can be attached on a separate sheet.

VII. Authorization Request Documents / Reports on Activities Conducted for the Bank's Own Interest 1)2)
ACTIVITIES CONDUCTED FOR THE BANK'S OWN INTEREST BANK : ______________________________________________ YEAR : ______________________________________________

Documents containing general information regarding Bank Activities, at least containing:
a. name of the Bank Activity; b. type of Bank Activity;
c. implementation time of the Bank Activity;
d. target market; e. planned/target transaction value in the first (1) year; and f. information regarding the scheme, features, or business model of the Bank Activity.
Documents containing information regarding benefits, costs, and risks for the Bank.
Documents containing implementation procedures (Standard Operating Procedures) of the organization and authority to execute the Bank Activity.
Documents containing policies and procedures related to the implementation of the Anti-Money Laundering and Counter-Financing of Terrorism (APU and PPT) program.
Documents containing the identification, measurement, monitoring, and control of risks inherent in the Bank Activity, including the results of legal and compliance aspect analysis of the Bank Activity.
Documents containing explanations of the Accounting Information System (AIS), including accounting records, and explanations of the connection of this AIS with the Bank's overall AIS and/or accounting recording systems.
Documents explaining operational readiness aspects of the Bank Activity, such as human resources and information technology.
Sharia opinion from the Sharia Supervisory Board regarding the Bank Activity for Islamic General Banks and Sharia Business Units.
Supporting documents (attached) 3)
a. ….. b. ….. et c.

Notes:

The number of pages is not binding; the Bank can elaborate in more detail according to the needs and characteristics of the Bank Activity.
Specifically for document requirements for Bank Activities regulated specifically in Financial Services Authority Regulations, the submission of documents refers to the relevant provisions.
Supporting documents include, among others, agreements and approvals from relevant authorities, or copies of proof of request for approval or license from relevant authorities.

VIII. Format of Sharia Opinion from the Sharia Supervisory Board (DPS)
Name of New Bank Product: ………………………
No. Description Opinion

New Bank Product is based on DSN-MUI Fatwa
Conformity of New Bank Product with DSN-MUI Fatwa
at least includes:
a. the contract used and fulfillment of elements in the contract used; b. transaction object and purpose of use;
c. conformity of bonus/nisbah determination for results/margin/ujrah/fee with the contract used, including in the event of a need to review the profit-sharing ratio/margin/ujrah (for fund distribution products);
d. determination of administrative fees; and e. determination of prizes, penalties/sanctions and/or compensation, discounts, accelerated repayment, and treatment of collateral, if any.
Standard Operating Procedures for the New Bank Product related to the fulfillment of Sharia Principles.
Results of review of the concept of contract/agreement/application forms for the New Bank Product related to the fulfillment of Sharia Principles.
Conclusion:
………………………………………………………………………………………………
………………………………………………………………………………………………
(Place), (Date, Month, Year)
(Sharia Supervisory Board) (Sharia Supervisory Board)

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja
Established in Jakarta on July 30, 2021
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Financial Services Authority Regulation Number 13/POJK.03/2021 Concerning the Implementation of Commercial Bank Products

Lineage: In force

Timeline