Financial Services Authority Regulation Number 16/POJK.03/2018 on Amendments to Financial Services Authority Regulation Number 44/POJK.03/2017 on Restrictions on Credit or Financing Provision by Commercial Banks for Land Acquisition and/or Land Processing

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 16 /POJK.03/2018
ON
AMENDMENTS TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 44/POJK.03/2017 ON RESTRICTIONS ON CREDIT OR FINANCING PROVISION BY COMMERCIAL BANKS FOR LAND ACQUISITION AND/OR LAND PROCESSING BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS' BOARD OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that current policy is needed to increase Indonesia's economic growth; b. that to increase economic growth, policy is needed to drive the growth of priority sectors, namely the housing sector;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation on Amendments to Financial Services Authority Regulation Number 44/POJK.03/2017 on Restrictions on Credit or Financing Provision by Commercial Banks for Land Acquisition and/or Land Processing;

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  Recalling: 1. Law Number 7 of 1992 on 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 on Amendments to Law Number 7 of 1992 on Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);

2. Law Number 21 of 2008 on 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);
3. Law Number 21 of 2011 on 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);
   RESOLVING:
   Determining: FINANCIAL SERVICES AUTHORITY REGULATION ON AMENDMENTS TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 44/POJK.03/2017 ON RESTRICTIONS ON CREDIT OR FINANCING PROVISION BY COMMERCIAL BANKS FOR LAND ACQUISITION AND/OR LAND PROCESSING.
   Article I
   The provision of paragraph (2) of Article 2 in the Financial Services Authority Regulation Number 44/POJK.03/2017 on Restrictions on Credit or Financing Provision by Commercial Banks for Land Acquisition and/or Land Processing (State Gazette of the Republic of Indonesia Year 2017 Number 150, Supplement to the State Gazette of the Republic of Indonesia Number 6093) is amended, and Article 2 is added with 2 new paragraphs, namely paragraph (3) and paragraph (4), so that Article 2 reads as follows:
   Article 2
   (1) Banks are prohibited from:
   a. providing Credit or Financing to Developers, either directly or indirectly; and/or b. purchasing or guaranteeing Securities or Sharia Securities from Developers, for Land Acquisition and/or Land Processing. (2) The prohibition as referred to in paragraph (1) is excepted for:
   a. the transfer of Credit or Financing from one Developer to another Developer for the rescue of Credit or Financing, provided that it does not increase the outstanding balance of Credit or Financing; b. the extension of the term of Credit or Financing for the rescue of Credit or Financing, without increasing the outstanding balance of Credit or Financing;
   c. the provision of Credit or Financing and/or the purchase or guarantee of Securities or Sharia Securities from Developers for Land Acquisition and/or Land Processing for the construction of Simple Houses, with specific requirements; and/or
   d. the provision of Credit or Financing for Land Processing to Developers, with specific requirements.
   (3) The specific requirements as referred to in paragraph (2) letter c are:
   a. for non-storied Simple Houses, at least 90% (ninety percent) of the land area financed is used for the construction of non-storied Simple Houses along with public facilities and/or social facilities required for the residents of the relevant Simple Houses; b. for simple multi-story houses, at least 90% (ninety percent) of the land area and 75% (seventy-five percent) of the total floor area is used for the construction of simple multi-story houses along with public facilities and/or social facilities required for the residents of the relevant simple multi-story houses;
   c. for shophouses (ruko), at least 90% (ninety percent) of the land area is used for the construction of shophouses (ruko) along with public facilities and/or social facilities for residential and business needs of the shophouse owners; or
   d. for kiosks or traditional market stalls, at least 90% (ninety percent) of the land area is used for the construction of kiosks or traditional market stalls along with public facilities and/or social facilities for the business interests of the kiosk or traditional market stall owners. (4) The specific requirements as referred to in paragraph (2) letter d are:
   a. the provision of Credit or Financing for Land Processing is directed at the construction of single-site houses or multi-story houses, and not commercial areas; b. there is an agreement between the Bank and the Developer containing a condition that the Developer must commence the implementation of the construction of single-site houses or multi-story houses no later than 1 (one) year from the date of signing the agreement; and

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  This copy is in accordance with the original
  Legal Director 1
  Legal Department signed
  Yuliana
  c. the disbursement of Credit or Financing is carried out in stages based on the progress of the financed project.
  Article II
  This Financial Services Authority Regulation shall come into force on the date of its promulgation.
  To ensure that everyone knows it, it orders the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
  Determined in Jakarta on August 15, 2018
  CHAIRMAN OF THE COMMISSIONERS' BOARD
  FINANCIAL SERVICES AUTHORITY
  REPUBLIC OF INDONESIA, signed
  WIMBOH SANTOSO
  Promulgated in Jakarta on August 16, 2018
  MINISTER OF LAW AND HUMAN RIGHTS
  REPUBLIC OF INDONESIA, signed
  YASONNA H. LAOLY
  STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2018 NUMBER 138

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 16 /POJK.03/2018
ON
AMENDMENTS TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 44/POJK.03/2017 ON RESTRICTIONS ON CREDIT OR FINANCING PROVISION BY COMMERCIAL BANKS FOR LAND ACQUISITION AND/OR LAND PROCESSING
I. GENERAL
To increase Indonesia's economic growth, efforts are needed to drive the intermediary function of banking through adjustments to regulations regarding restrictions on the provision of Credit or Financing by Banks for Land Acquisition and/or Land Processing. The adjustment of these regulations is expected to increase the potential for expansion of Bank Credit or Financing in a measurable manner while still observing the principle of prudence. The aforementioned regulations are focused on driving the growth of Credit or Financing in priority sectors, namely the housing sector. In light of these considerations, banking policy is needed to drive economic growth.

II. ARTICLE BY ARTICLE
Article I
Article 2
Paragraph (1)
The provision of Credit or Financing directly means the provision of Credit or Financing by a Bank directly to a Developer.
The provision of Credit or Financing indirectly means the provision of Credit or Financing by a Bank to other parties that can be effectively utilized by a Developer for Land Acquisition and/or Land Processing. Paragraph (2) Clearly sufficient. Paragraph (3) Clearly sufficient. Paragraph (4) Letter a The determination of an area as a commercial area or not a commercial area refers, among other things, to government policies regarding spatial planning or housing. Letter b Clearly sufficient. Letter c Clearly sufficient.
Article II
Clearly sufficient.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6241