Financial Services Authority Regulation Number 17/POJK.03/2021 on the Second Amendment to Regulation Number 11/POJK.03/2020 on National Economic Stimulus as a Countercyclical Policy for the Impact of the 2019 Coronavirus Disease Spread

EXTRACT
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 17 /POJK.03/2021
CONCERNING
THE SECOND AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 11/POJK.03/2020 CONCERNING NATIONAL ECONOMIC STIMULUS AS A COUNTERCYCLICAL POLICY FOR THE IMPACT OF THE SPREAD OF CORONAVIRUS DISEASE 2019 BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that the ongoing spread of coronavirus disease 2019 (COVID-19) globally and domestically has had a direct or indirect impact on the performance and capacity of debtors to fulfill credit or financing payment obligations; b. that the subsequent impact on debtor performance and capacity will increase credit risk and subsequently affect bank capital resilience, potentially disrupting banking performance and financial system stability, which can affect economic growth;
c. that to maintain the momentum of performance improvement for debtors affected by coronavirus disease 2019 (COVID-19), to encourage the optimalization of banking intermediation functions, to prepare banks and debtors to return to normal slowly after the stimulus policy ends, and to maintain financial system stability, anticipatory and follow-up steps are needed in the form of adjustments to the Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019 as amended by the Financial Services Authority Regulation Number 48/POJK.03/2020 concerning Amendments to the Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019;
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 Second Amendment to the Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019;

Recalling:

1. 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);
2. 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);
3. 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);
4. Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019 (State Gazette of the Republic of Indonesia Year 2020 Number 76, Supplement to the State Gazette of the Republic of Indonesia Number 6480) as amended by the Financial Services Authority Regulation Number 48/POJK.03/2020 concerning Amendments to the Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019 (State Gazette of the Republic of Indonesia Year 2020 Number 267, Supplement to the State Gazette of the Republic of Indonesia Number 6583);

DECIDING:
To Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE SECOND AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 11/POJK.03/2020 CONCERNING NATIONAL ECONOMIC STIMULUS AS A COUNTERCYCLICAL POLICY FOR THE IMPACT OF THE SPREAD OF CORONAVIRUS DISEASE 2019.

Article I
Several provisions in the Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019 (State Gazette of the Republic of Indonesia Year 2020 Number 76, Supplement to the State Gazette of the Republic of Indonesia Number 6480) as amended by the Financial Services Authority Regulation Number 48/POJK.03/2020 concerning Amendments to the Financial Services Authority Regulation Number 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy for the Impact of the Spread of Coronavirus Disease 2019 (State Gazette of the Republic of Indonesia Year 2020 Number 267, Supplement to the State Gazette of the Republic of Indonesia Number 6583) are amended as follows:

1. The provision of paragraph (1) of Article 7B is amended, so that Article 7B reads as follows:
   Article 7B
   (1) BUK or BUS may provide education funds of less than 5% (five percent) of the human resource expenditure budget.
   (2) BUK or BUS may not change the business plan in the event of changes to the education fund provision plan as long as approval from the Financial Services Authority has been obtained as referred to in Article 2 paragraph (6).

2. The provision of Article 10 is amended, so that it reads as follows:
   Article 10
   (1) The implementation of policies supporting economic growth stimulus for debtors affected by the spread of coronavirus disease 2019 (COVID-19), including micro, small, and medium enterprises as referred to in Article 2 paragraph (1) letter a, shall apply until March 31, 2023.

(2) The implementation of policies supporting economic growth stimulus as a result of the spread of coronavirus disease 2019 (COVID-19) regarding:
a. the provision of education funds as referred to in Article 7B shall apply for the years 2020, 2021, and 2022; b. the determination of collateral quality taken over as referred to in Article 7C shall apply until March 31, 2023; and
c. the fulfillment of the capital conservation buffer as referred to in Article 7D shall apply until March 31, 2022.

Article II
This Financial Services Authority Regulation shall come into force on the date of its promulgation.

This extract is in accordance with the original.
Legal Director 1
Legal Department signed
Mufli Asmawidjaja

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

Established in Jakarta on September 10, 2021

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

Promulgated in Jakarta on September 10, 2021
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 213

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 17 /POJK.03/2021
CONCERNING
THE SECOND AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 11/POJK.03/2020 CONCERNING NATIONAL ECONOMIC STIMULUS AS A COUNTERCYCLICAL POLICY FOR THE IMPACT OF THE SPREAD OF CORONAVIRUS DISEASE 2019

I. GENERAL
In order to face the impact of the spread of coronavirus disease 2019 (COVID-19), the Financial Services Authority has issued countercyclical policies applicable since March 2020. At the end of 2020, the Financial Services Authority extended the aforementioned policies, emphasizing the obligation to apply risk management and prudential principles in the implementation of the stimulus, as well as adding policies related to bank liquidity and capital. The ongoing spread of coronavirus disease 2019 (COVID-19) globally and domestically will impact the increase in bank credit risk, which will eventually erode bank capital resilience. Therefore, an extension of countercyclical policies is needed as an anticipatory and follow-up step to encourage the optimalization of banking performance, maintain financial system stability, and support economic growth, in order to maintain the momentum of banking indicators that have already improved and to prepare banks and debtors to return to normal slowly so as to avoid potential turbulence after this policy ends. In the implementation of countercyclical policies for the impact of the spread of coronavirus disease 2019 (COVID-19), banks must still pay attention to prudential principles accompanied by a monitoring mechanism to prevent misuse in the application of regulations (moral hazard). Countercyclical policies for the impact of the spread of coronavirus disease 2019 (COVID-19) are temporary, so they need to be evaluated and adjusted if necessary. In this regard, it is necessary to adjust the Financial Services Authority regulations regarding national economic stimulus as a countercyclical policy for the impact of the spread of coronavirus disease 2019 (COVID-19), namely by extending the validity period of policies supporting economic growth stimulus for debtors and policies supporting economic growth stimulus for BUK, BUS, or UUS in the form of relaxation of education fund provision and determination of collateral quality taken over.

II. ARTICLE BY ARTICLE
Article I
Number 1
Article 7B
Clearly stated.
Number 2
Article 10
Clearly stated.
Article II
Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6722