Financial Services Authority Regulation Number 3 of 2016 Concerning Sharia Rural Financing Banks

FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 3 /POJK.03/2016
CONCERNING
SHARIA RURAL FINANCING BANKS
BY THE GRACE OF GOD THE ALMIGHTY
THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to support the sustainable growth of the national economy and serve various layers of society with banking services, a strong and competitive banking industry is needed; b. that in order to strengthen the banking sector and enhance competitiveness, particularly for Sharia banking, various efforts must be undertaken, including among others through strengthening capital, organizing ownership, improving the quality of management, and enhancing services of Sharia Rural Financing Banks;
c. that based on the considerations as referred to in letters a and b, it is necessary to establish provisions concerning Sharia Rural Financing Banks in a Financial Services Authority Regulation.

Recalling:

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:

To Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING SHARIA RURAL FINANCING BANKS.

CHAPTER I
GENERAL PROVISIONS

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

Sharia Rural Financing Bank, hereinafter abbreviated as BPRS, is a Sharia Rural Financing Bank as referred to in Law Number 21 of 2008 concerning Sharia Banking.
Commercial Bank is a bank that conducts business activities based on Sharia principles and/or conventional principles, which in its activities provides services in the payment circuit as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998.
Branch Office is a BPRS office that is responsible to the head office of the respective BPRS with a clear business address according to the location where the Branch Office conducts its business.
Cash Office is a BPRS office whose business activities involve cash services to assist its head office.
Cash Service Activities are Mobile Cash services, Payment Points, and service activities using Automated Teller Machine (ATM) cards and/or debit cards, or other cash services that can be equated with them.
Mobile Cash is a cash service activity that moves around using transportation or at specific locations on a non-permanent basis, including among others mobile cash counters, floating cash, or non-permanent bank counters.
Payment Point is an activity in the form of payment collection through cooperation between the BPRS and other parties at a specific location, such as for collecting telephone bills, electricity bills, and/or receiving deposits from third parties.
Automated Teller Machine (ATM) is an electronic cash or non-cash activity to facilitate customers, including among others in withdrawing or depositing cash, making payments through book transfers, interbank transfers, and/or obtaining information regarding customer account balances/statements.
Electronic Banking Equipment, hereinafter abbreviated as PPE, is a cash or non-cash service activity to serve the public conducted using electronic machine facilities but does not include the provision of giro instruments, located both inside and outside the BPRS office, which can perform cash withdrawals or deposits, payments through book transfers, interbank fund transfers, and/or balance or account statement information, either using networks and/or machines owned by the BPRS itself or through BPRS cooperation with other parties, including among others Automated Teller Machine (ATM), in which case this includes Automated Deposit Machine (ADM) and Electronic Data Capture (EDC).
Sharia Principles are Islamic legal principles in Sharia banking activities based on fatwas issued by the National Sharia Council – Indonesian Ulema Council.
Board of Directors is the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies.
Board of Commissioners is the Board of Commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies.
Sharia Supervisory Board, hereinafter abbreviated as DPS, is a board tasked with providing advice and suggestions to the Board of Directors and supervising BPRS activities to ensure compliance with Sharia Principles.
Executive Officer is an officer who is directly responsible to the Board of Directors or has influence over BPRS policy and operations, including among others branch managers, division heads, section heads, managers, and/or equivalent officers.
Controlling Shareholder, hereinafter abbreviated as PSP, is a legal entity, individual, and/or business group that:
a. owns BPRS shares amounting to 25% (twenty-five percent) or more of the issued shares and obtains voting rights; or b. owns BPRS shares less than 25% (twenty-five percent) of the issued shares and has voting rights, but the party concerned can be proven to have controlled the BPRS directly or indirectly.
Professional Certification Institution is an implementing institution for Job Competency Certification that obtains a license from the National Professional Certification Agency.
General Meeting of Shareholders, hereinafter abbreviated as GMS, is the GMS as referred to in Law Number 40 of 2007 concerning Limited Liability Companies.
Unqualified List, hereinafter abbreviated as UQL, is a list maintained by the Financial Services Authority containing parties who received an unqualified rating in the competency and propriety test.

Article 2
BPRS must be established as a Limited Liability Company.

Article 3
BPRS must have articles of association that, in addition to meeting the requirements for articles of association as regulated in applicable legislation, must also contain provisions:
a. members of the Board of Directors, members of the Board of Commissioners, and members of the DPS are appointed by the GMS; b. the appointment of members of the Board of Directors, members of the Board of Commissioners, and members of the DPS becomes effective after receiving approval from the Financial Services Authority;
c. the duties, authorities, responsibilities, and other matters related to the requirements for the Board of Directors, Board of Commissioners, and DPS must comply with applicable legislation;
d. the BPRS GMS determines the remuneration of Board of Directors and Board of Commissioners members, annual accountability reports, appointment and audit fees of public accountants, and other matters established in this Financial Services Authority Regulation; and e. the BPRS GMS must be chaired by the Lead Commissioner and in the event the Lead Commissioner is unable to attend, the GMS is chaired by another member of the Board of Commissioners.

CHAPTER II
ESTABLISHMENT OF SHARIA RURAL FINANCING BANKS

Article 4
BPRS may only be established and conduct business activities after obtaining a license from the Financial Services Authority.

Article 5
(1) BPRS may only be established and/or owned by:
a. Indonesian citizens and/or Indonesian legal entities whose entire owners are Indonesian citizens; b. local governments; or
c. two or more parties as referred to in letters a and b.
(2) In the event an Indonesian legal entity as referred to in paragraph (1) letter a is submitted as a candidate for BPRS PSP, the legal entity must have been operating for at least 2 (two) years at the time of submitting the application for principle approval.

Article 6
(1) Paid-up capital for establishing BPRS is at least:
a. IDR 12,000,000,000.00 (twelve billion rupiah), for BPRS established in zone 1; b. IDR 7,000,000,000.00 (seven billion rupiah), for BPRS established in zone 2;
c. IDR 5,000,000,000.00 (five billion rupiah), for BPRS established in zone 3; and
d. IDR 3,500,000,000.00 (three billion five hundred million rupiah), for BPRS established in zone 4.
(2) Based on certain considerations, the Financial Services Authority has the authority to determine the paid-up capital of BPRS to be higher than the paid-up capital amount as referred to in paragraph (1).

Article 7
(1) The paid-up capital as referred to in Article 6 paragraph (1) must be placed in the form of deposits at Sharia Commercial Banks and/or Sharia Business Units in Indonesia under the name “Commissioners of the Financial Services Authority q.q. (name of candidate BPRS PSP)” with the description for the establishment of the respective BPRS, and its withdrawal can only be done after receiving approval from the Financial Services Authority. (2) The placement of paid-up capital in the form of deposits as referred to in paragraph (1) can be done in stages:
a. at least 50% (fifty percent) of the paid-up capital before submitting the application for principle approval for the establishment of BPRS; and b. the shortfall of the paid-up capital is deposited before submitting the application for the business license for the establishment of BPRS.

CHAPTER III
LICENSING OF SHARIA RURAL FINANCING BANKS

Article 8
The license as referred to in Article 4 is given in 2 (two) stages:
a. principle approval, which is approval to conduct preparations for the establishment of BPRS; and b. business license, which is a license to conduct BPRS business activities after the preparations as referred to in letter a are completed.

Section One
Principle Approval

Article 9
The application for principle approval for the establishment of BPRS as referred to in Article 8 letter a is submitted by at least one candidate BPRS PSP to the Commissioners of the Financial Services Authority accompanied by among others:
a. draft deed of establishment of the Limited Liability Company (PT), including draft articles of association; b. list of shareholders including details of each share ownership;
c. list of candidates for members of the Board of Directors, candidates for members of the Board of Commissioners, and candidates for members of the DPS accompanied by documents to be further regulated in a Financial Services Authority Circular;
d. organizational structure plan and personnel numbers; e. analysis of the potential and feasibility of establishing BPRS; f. plan for systems and work procedures; g. business plan; h. proof of capital deposit of at least 50% (fifty percent) of the minimum paid-up capital as referred to in Article 6;
i. statement letter from candidate BPRS shareholders, that the capital deposit as referred to in letter h:

does not originate from loans or financing facilities in any form from Banks and/or other parties; and/or
does not originate from and for money laundering.
In the event the candidate BPRS shareholder is a Local Government, the statement letter can be replaced by a Regional Head Decision Letter; j. list of BPRS and/or other financial institutions owned by the candidate BPRS PSP, accompanied by financial reports of each BPRS or other financial institution owned by the candidate BPRS PSP; and k. proof of full payment of licensing fees in the framework of establishing BPRS to the Financial Services Authority.

Article 10
(1) The Financial Services Authority provides approval or rejection of the principle approval application within at most 40 (forty) working days since the application along with the required documents are received completely. (2) In order to provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. examination of the completeness and truthfulness of documents; b. assessment of the analysis of the potential and feasibility of establishing BPRS as referred to in Article 9 letter e;
c. analysis including among others the saturation level of the number of BPRS and the distribution of national economic development;
d. assessment of the commitment of candidate BPRS owners in establishing BPRS; e. competency and propriety test for candidate PSPs, candidates for members of the Board of Directors, candidates for members of the Board of Commissioners, and interviews with candidates for members of the DPS; f. examination of capital deposits; and g. examination of the financial performance of BPRS and/or other financial institutions under the same PSP ownership. (3) In addition to the provisions as referred to in paragraph (2), the party submitting the application for BPRS establishment must present and explain to the Financial Services Authority regarding the analysis of the potential and feasibility of establishing BPRS, the plan for systems and work procedures, and the business plan.

Article 11
(1) The principle approval as referred to in Article 10 paragraph (1) is valid for a period of 1 (one) year calculated from the date the principle approval is given and cannot be extended.
(2) Parties who have received principle approval as referred to in paragraph (1) are prohibited from conducting business activities before obtaining a business license from the Financial Services Authority. (3) If the time period as referred to in paragraph (1) is exceeded and the candidate BPRS owner does not submit a business license application to the Financial Services Authority, the principle approval that has been given is declared invalid.

Section Two
Business License

Article 12
Parties who have obtained principle approval submit the BPRS business license application as referred to in Article 8 letter b to the Commissioners of the Financial Services Authority by attaching among others:
a. deed of establishment of the Limited Liability Company (PT), containing articles of association that have been approved by the competent authority; b. list of shareholders as referred to in Article 9 letter b, in the event of changes in shareholders;
c. list of candidates for members of the Board of Directors, candidates for members of the Board of Commissioners, and candidates for members of the DPS as referred to in Article 9 letter c, in the event of changes in candidates for members of the Board of Directors, candidates for members of the Board of Commissioners, and/or candidates for members of the DPS;
d. proof of full payment of minimum paid-up capital as referred to in Article 6; and e. proof of operational readiness, covering at least:

organizational structure including personnel composition;
systems and work procedures;
list of fixed assets and inventory;
proof of office building control in the form of proof of ownership or office building lease agreement supported by proof of ownership from the lessor;
photos of the office building and room layout;
examples of forms or documents to be used for BPRS operations; and
Taxpayer Identification Number (NPWP).

Article 13
(1) The Financial Services Authority provides approval or rejection of the business license application within at most 40 (forty) working days since the application along with the required documents are received completely. (2) In order to provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. examination of the completeness and truthfulness of documents; b. analysis of the operational readiness for the establishment of BPRS;
c. competency and propriety test for candidate PSPs, candidates for members of the Board of Directors, candidates for members of the Board of Commissioners, and interviews with candidates for members of the DPS as referred to in Article 12 letters b and c in the event of replacement of previously submitted candidates;
d. examination of capital deposits; and e. examination of the financial performance of BPRS and/or other financial institutions under the same PSP ownership.

Article 14
(1) BPRS that has obtained a business license from the Financial Services Authority is required to conduct business activities within at most 40 (forty) working days calculated from the date of the business license. (2) The implementation of BPRS business activities as referred to in paragraph (1) must be reported by the BPRS Board of Directors to the Financial Services Authority within at most 10 (ten) working days calculated from the date of the implementation of business activities. (3) If the time limit as referred to in paragraph (1) is exceeded and BPRS does not conduct business activities, the business license granted to BPRS is declared invalid.

Article 15
BPRS that has obtained a business license from the Financial Services Authority is required to clearly state the phrase “Sharia Rural Financing Bank” or “Sharia Rural Financing Bank” or “BPRS” in the writing of its name and logo at the respective BPRS office.

CHAPTER IV
OWNERSHIP AND CAPITAL CHANGES

Section One
Ownership

Article 16
(1) Ownership of BPRS by Indonesian legal entities as referred to in Article 5 paragraph (1) must fulfill the following:
a. for Limited Liability Companies, Regional Enterprises, or Cooperatives, at most equal to the net own capital of the respective legal entity and does not exceed the amount permitted for the legal entity according to applicable legislation; and b. for foundation legal entities or other legal entities, at most equal to the amount permitted for the legal entity according to applicable legislation. (2) Ownership calculation is done at the beginning of the establishment of BPRS and at the time of adding paid-up capital by the legal entity as referred to in paragraph (1). (3) In the event the legal entity as referred to in paragraph (1) owns at least 25% (twenty-five percent) of BPRS shares, BPRS is required to submit annual financial reports prepared by the legal entity according to applicable legislation to the Financial Services Authority at the latest by the end of June of the following year.

Article 17
Funds for BPRS ownership are prohibited from:
a. originating from loans and/or financing facilities in any form from banks and/or other parties; and/or b. originating from and for the purpose of money laundering.

Article 18
(1) BPRS shareholders are prohibited from withdrawing back the paid-up capital.
(2) In the event a shareholder intends to resign as a BPRS shareholder, the shareholder concerned is required to transfer their share ownership to other parties in accordance with Financial Services Authority regulations and/or other applicable legislation.

Article 19
(1) Parties that can become BPRS owners must meet requirements, at least:
a. having good character and morality; b. having a commitment to comply with Sharia banking regulations and applicable legislation;
c. having a high commitment to the healthy and sustainable development of BPRS;
d. not being included in the Unqualified List (DTL); e. not having non-performing loans and/or non-performing financing; f. having a commitment not to commit and/or repeat acts and/or actions that fall within the scope of the competency and propriety test as referred to in provisions concerning the competency and propriety test for BPRS; g. not being a controller, member of the Board of Directors, or member of the Board of Commissioners of a legal entity that has non-performing loans and/or non-performing financing; and h. never having been declared bankrupt or never having been a shareholder, member of the Board of Directors, or member of the Board of Commissioners who was declared guilty of causing a company to be declared bankrupt based on a court decision within the last 5 (five) years before nomination. (2) Parties that can become PSPs must meet the requirements as referred to in paragraph (1) and financial feasibility requirements according to provisions concerning the competency and propriety test for BPRS. (3) In the event the BPRS owner is a legal entity, the requirements as referred to in paragraph (1) apply to the owner, members of the Board of Directors, members of the Board of Commissioners, and/or management of the respective legal entity. (4) The requirements for owners as referred to in paragraph (3) do not apply in the event the BPRS owner is a legal entity in the form of a Cooperative and Foundation.

Article 20
Each BPRS is required to have at least 1 (one) shareholder with a share ownership percentage of at least 25% (twenty-five percent).

Section Two
Ownership Changes

Article 21
(1) Changes in BPRS ownership that result in changes and/or the occurrence of new PSPs must obtain approval from the Financial Services Authority.
(2) Changes in BPRS ownership as referred to in paragraph (1) are subject to the procedures for changes in BPRS ownership regulated in legislation governing mergers, consolidations, and acquisitions.
(3) Changes in BPRS ownership as referred to in paragraph (1) as a result of inheritance are not treated as acquisitions but still require approval from the Financial Services Authority.
(4) Changes in BPRS ownership that do not result in changes in PSP and/or the occurrence of new PSPs must be reported by the BPRS Board of Directors to the Financial Services Authority within at most 10 (ten) working days after the change.

Section Three
Capital Changes

Article 22
The BPRS Board of Directors is required to report changes in authorized capital to the Financial Services Authority within at most 10 (ten) working days since BPRS receives approval for the articles of association change from the competent authority, accompanied by:
a. deed of articles of association change according to applicable legislation; and b. proof of approval of the articles of association change as referred to in letter a from the competent authority.

Article 23
BPRS is required to systematically administer the list of shareholders and its changes.

Article 24
(1) In the framework of adding paid-up capital, shareholders and/or candidate shareholders must obtain approval from the Financial Services Authority.
(2) Shareholders and/or candidate shareholders submit the application for approval of adding paid-up capital as referred to in paragraph (1) to the Financial Services Authority accompanied by:
a. proof of capital deposit; and b. supporting documents.
(3) The addition of paid-up capital as referred to in paragraph (1) must be placed in the form of deposits at Sharia Commercial Banks and/or Sharia Business Units in Indonesia or at the respective BPRS, except for additions of paid-up capital sourced from dividends of the respective BPRS which can be placed in other forms. (4) Additions of paid-up capital placed in the form of deposits at the respective BPRS as referred to in paragraph (3) are only valid:
a. for BPRS that are not under special supervision status; and b. conducted by the respective BPRS shareholder.
(5) Procedures for adding paid-up capital:
a. in the form of deposits at Sharia Commercial Banks and/or Sharia Business Units in Indonesia by stating under the name “Commissioners of the Financial Services Authority q.q. (name of BPRS)”, and stating the name of the additional capital depositor and the description that withdrawal can only be done after receiving approval from the Financial Services Authority; and/or b. in the form of deposits at the respective BPRS by stating under the name “Commissioners of the Financial Services Authority q.q. (name of depositor shareholder)” and stating the description that withdrawal can only be done after receiving approval from the Financial Services Authority. (6) The Financial Services Authority provides approval or rejection of the application for adding paid-up capital as referred to in paragraph (2) within at most 30 (thirty) working days since the application along with the required documents are received completely. (7) The addition of paid-up capital as referred to in paragraph (6) must be approved by the GMS within at most 60 (sixty) working days since the date of approval from the Financial Services Authority. (8) If the time period determined as referred to in paragraph (7) is exceeded, the approval from the Financial Services Authority as referred to in paragraph (6) is declared invalid. (9) BPRS is required to report the implementation of adding paid-up capital to the Financial Services Authority at the latest 10 (ten) working days after the change in paid-up capital is approved in the GMS as referred to in paragraph (7), accompanied by:
a. proof of deposit;

b. minutes of the General Meeting of Shareholders (GMS);
c. a statement of commitment from shareholders as referred to in Article 9 letter i;
and d. a list of shareholders along with details of their respective shareholdings.

(10) BPRS must report changes to paid-up capital as referred to in paragraph (9) to the Financial Services Authority (OJK) no later than 10 (ten) working days from the date of the letter of acceptance of the notification of amendment of the Articles of Association or approval from the competent authority, accompanied by:
a. the deed of amendment of the Articles of Association in accordance with applicable laws and regulations; and b. proof of acceptance of the notification or approval of the amendment of the Articles of Association as referred to in letter a from the competent authority.

CHAPTER V
THE BOARD OF DIRECTORS, BOARD OF COMMISSIONERS, SHARIA SUPERVISORY BOARD, AND EXECUTIVE OFFICIALS

First Section
The Board of Directors and Board of Commissioners

Article 25
(1) Members of the Board of Directors and the Board of Commissioners must meet integrity, competence, and financial reputation requirements.
(2) The requirements and procedures for assessing the fulfillment of requirements for members of the Board of Directors and members of the Board of Commissioners refer to regulations regarding the fit and proper test.

Article 26
(1) The Board of Directors is fully responsible for the management of the BPRS.
(2) The Board of Directors must manage the BPRS in accordance with its authority and responsibilities as regulated in the BPRS Articles of Association and applicable laws and regulations for Sharia banking. (3) The management of the BPRS as referred to in paragraph (2) must meet the principle of prudence and Sharia Principles.

Article 27
(1) The number of members of the Board of Directors of a BPRS must be at least 2 (two) persons.
(2) The Board of Directors is led by the President Director or Chief Director.
(3) At least 50% (fifty percent) of the members of the Board of Directors, including the Chief Director, must have operational experience of at least:
a. 2 (two) years as an official in the field of financing and/or funding in Sharia banking; b. 2 (two) years as an official in the field of financing and/or lending in conventional banking and having knowledge in the field of Sharia banking; or
c. 3 (three) years as a director or equivalent to a director in a Sharia microfinance institution.
(4) Members of the Board of Directors must have formal education at least at the Diploma III or Bachelor's degree level.
(5) Members of the Board of Directors must have a work competency certificate from a Professional Certification Body no later than 2 (two) years from the date of effective appointment.
(6) The Chief Director and other members of the Board of Directors must act independently in carrying out their duties.
(7) Members of the Board of Directors, individually or jointly, are prohibited from holding shares amounting to 25% (twenty-five percent) or more of the paid-up capital of the BPRS.

Article 28
(1) All members of the Board of Directors must reside near the location of the BPRS headquarters.
(2) A majority of Board of Directors members are prohibited from having in-law or family relationships up to the second degree with:
a. other members of the Board of Directors; and/or b. members of the Board of Commissioners.
(3) Members of the Board of Directors are prohibited from holding concurrent positions as members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board (DPS), or Executive Officials in financial institutions, business entities, or other institutions, except as managers of non-profit organizations/institutions as long as it does not interfere with the execution of duties as Directors of the BPRS. (4) Members of the Board of Directors of a BPRS holding concurrent positions as managers of non-profit organizations/institutions as referred to in paragraph (3) must report to the Financial Services Authority. (5) Members of the Board of Directors are prohibited from granting general power of attorney that results in the transfer of duties, authority, and responsibility to other parties.

Article 29
(1) The Board of Commissioners supervises the execution of the duties and responsibilities of the Board of Directors and provides advice to the Board of Directors.
(2) Supervision and advice as referred to in paragraph (1) are conducted in such a manner that the Board of Directors can develop and mitigate risks regarding its business activities.
(3) The Board of Commissioners must encourage the BPRS Board of Directors to meet the principle of prudence and Sharia Principles.

Article 30
(1) The number of members of the Board of Commissioners must be at least 2 (two) persons and at most equal to the number of members of the Board of Directors.
(2) In the event that the number of members of the Board of Directors is more than 2 (two) persons, then the number of members of the Board of Commissioners must be at most 3 (three) persons.
(3) Members of the Board of Commissioners as referred to in paragraph (1) and paragraph (2) must have at least 1 (one) person residing near the location of the BPRS.
(4) The Board of Commissioners is led by the President Commissioner or Chief Commissioner.
(5) Members of the Board of Commissioners must have:
a. adequate knowledge in the field of banking relevant to their position; and/or b. experience in the field of banking and/or non-bank financial services institutions.
(6) Members of the Board of Commissioners as referred to in paragraph (1) and paragraph (2) must have a work competency certificate from a Professional Certification Body no later than 2 (two) years from the date of effective appointment. (7) The Board of Commissioners must hold Board of Commissioners meetings regularly at least 1 (one) time every 3 (three) months. (8) The Board of Commissioners must present the results of supervision of the BPRS when requested by the Financial Services Authority.

Article 31
(1) Members of the Board of Commissioners may hold concurrent positions in at most 2 (two) other companies as follows:
a. members of the Board of Commissioners of other BPR/BPRS; or b. members of the Board of Commissioners, members of the Board of Directors, and/or Executive Officials in other non-bank institutions/companies; or
c. a combination of letters a and b.
(2) Members of the Board of Commissioners are prohibited from holding concurrent positions as members of the Board of Directors in other BPRS, Rural Credit Banks, and/or Commercial Banks.

Article 32
(1) Members of the Board of Commissioners are prohibited from having family or in-law relationships up to the second degree with other members of the Board of Commissioners; and/or (2) A majority of members of the Board of Commissioners are prohibited from having family or in-law relationships up to the second degree with members of the Board of Directors.

Article 33
Members of the Board of Commissioners are prohibited from granting general power of attorney that results in the transfer of duties and authority without limits.

Article 34
In the event of a conflict of interest, members of the Board of Directors, members of the Board of Commissioners, and/or Executive Officials are prohibited from making decisions.

Article 35
(1) Candidates for members of the Board of Directors and candidates for members of the Board of Commissioners must obtain approval from the Financial Services Authority before carrying out their duties and functions in their positions. (2) The BPRS submits an application to obtain approval as referred to in paragraph (1) to the Financial Services Authority accompanied by supporting documents. (3) In order to grant approval or rejection of the application as referred to in paragraph (2), the Financial Services Authority conducts a fit and proper test. (4) OJK grants approval or rejection of the submission of candidates for members of the Board of Directors and/or candidates for members of the Board of Commissioners no later than 30 (thirty) working days from the date the application along with the required documents is received completely. (5) The appointment of candidates for members of the Board of Directors and/or candidates for members of the Board of Commissioners must be carried out by the GMS no later than 45 (forty-five) working days calculated from the date of approval from the Financial Services Authority. (6) In the event that the appointment of candidates for members of the Board of Directors and/or candidates for the Board of Commissioners is carried out by the GMS beyond the time limit as referred to in paragraph (5), the approval granted by the Financial Services Authority and the determination of the results of the fit and proper test are void and declared invalid. (7) The appointment of candidates for members of the Board of Directors and/or candidates for the Board of Commissioners becomes effective after receiving approval from the Financial Services Authority. (8) The appointment of members of the Board of Directors and/or members of the Board of Commissioners must be reported by the BPRS to the Financial Services Authority no later than 10 (ten) working days from the date of the General Meeting of Shareholders.

Article 36
(1) The BPRS must submit a plan for the dismissal or resignation of members of the Board of Directors and/or members of the Board of Commissioners to the Financial Services Authority accompanied by the reasons for dismissal or resignation. (2) The dismissal or resignation of members of the Board of Directors and/or members of the Board of Commissioners as referred to in paragraph (1) becomes effective after receiving confirmation from the Financial Services Authority. (3) The BPRS must submit a report on the implementation of the dismissal or resignation of members of the Board of Directors and/or the Board of Commissioners to the Financial Services Authority no later than 10 (ten) working days from the date the dismissal or resignation becomes effective. (4) In the event that members of the Board of Directors and/or members of the Board of Commissioners die, the BPRS must report to the Financial Services Authority no later than 10 (ten) working days from the date the members of the Board of Directors and/or members of the Board of Commissioners die, accompanied by a death certificate from the competent authority.

Article 37
(1) In the event that members of the Board of Directors and/or members of the Board of Commissioners are dismissed by the GMS resulting in non-compliance with the provisions as referred to in Article 27 paragraph (1) and/or Article 30 paragraph (1), the BPRS must replace members of the Board of Directors and/or members of the Board of Commissioners no later than 120 (one hundred twenty) working days from the date the members of the Board of Directors and/or members of the Board of Commissioners are dismissed based on the GMS decision. (2) In the event that members of the Board of Directors and/or members of the Board of Commissioners resign resulting in non-compliance with the provisions as referred to in Article 27 paragraph (1) and/or Article 30 paragraph (1), the BPRS must replace members of the Board of Directors and/or members of the Board of Commissioners no later than 120 (one hundred twenty) working days from the date the resignation becomes effective. (3) In the event that members of the Board of Directors and/or members of the Board of Commissioners die resulting in non-compliance with the provisions as referred to in Article 27 paragraph (1) and/or Article 30 paragraph (1), the BPRS must replace members of the Board of Directors and/or members of the Board of Commissioners no later than 120 (one hundred twenty) working days from the date of death stated in the death certificate from the competent authority. (4) In the event that members of the Board of Directors and/or members of the Board of Commissioners violate regulations causing the members of the Board of Directors and/or members of the Board of Commissioners to resign or be dismissed so as not to meet the provisions as referred to in Article 27 paragraph (1) and/or Article 30 paragraph (1), the BPRS must replace members of the Board of Directors and/or members of the Board of Commissioners no later than 120 (one hundred twenty) working days from the date of the notification letter or decision from the Financial Services Authority. (5) The BPRS must hold a GMS to replace members of the Board of Directors and/or members of the Board of Commissioners due to the expiration of their term of office no later than on the date the term of office of the members of the Board of Directors and/or members of the Board of Commissioners expires.

Article 38
(1) The re-appointment of members of the Board of Directors and/or members of the Board of Commissioners by the GMS must be carried out no later than on the date the term of office of the members of the Board of Directors and/or members of the Board of Commissioners expires. (2) The BPRS must submit a report on the re-appointment of members of the Board of Directors and/or members of the Board of Commissioners as referred to in paragraph (1) to the Financial Services Authority no later than 30 (thirty) working days from the date of the GMS. (3) The submission of the re-appointment report as referred to in paragraph (2) is accompanied by documents:
a. minutes of the GMS approving the re-appointment of members of the Board of Directors and/or members of the Board of Commissioners; and b. proof of approval of the amendment of the Articles of Association and/or proof of reporting on the re-appointment of members of the Board of Directors and/or members of the Board of Commissioners. (4) In the event that:
a. the BPRS cannot hold a GMS within the time limit as referred to in paragraph (1); or b. the GMS is held but does not approve the re-appointment of members of the Board of Directors and/or members of the Board of Commissioners, the term of office of the members of the Board of Directors and/or members of the Board of Commissioners concerned expires. (5) Members of the Board of Directors and/or members of the Board of Commissioners whose term of office has expired as referred to in paragraph (4) and are nominated again as members of the Board of Directors or members of the Board of Commissioners must obtain approval from the Financial Services Authority with reference to the procedures for submitting candidates for members of the Board of Directors and/or candidates for members of the Board of Commissioners as referred to in Article 35.

Second Section
Sharia Supervisory Board

Article 39
(1) The BPRS must establish a Sharia Supervisory Board (DPS) located at the BPRS headquarters.
(2) The number of DPS members must be at least 2 (two) persons and at most 3 (three) persons.
(3) The DPS is led by a chairman who is one of the DPS members.
(4) DPS members may hold concurrent positions as DPS members in at most 4 (four) other Sharia financial institutions.

Article 40
Members of the DPS as referred to in Article 39 must meet the following requirements:
a. Integrity, which must include at least:

having good character and morality;
having a commitment to comply with Sharia banking regulations and laws and regulations;
having a high commitment to the development of healthy BPRS operations;
not being included in the DTL (List of Debtors in Default) as regulated in Financial Services Authority regulations regarding fit and proper tests for Sharia Banks and Sharia Business Units.
b. Competence, which must have at least knowledge and experience in the field of Sharia muamalah and knowledge in the field of banking and/or finance in general; and
c. Financial reputation, which must include at least:
not being included in the list of non-performing loans;
never declared bankrupt or having been a shareholder, member of the Board of Directors, or member of the Board of Commissioners declared guilty causing a company to be declared bankrupt, within the last 5 (five) years before nomination.

Article 41
(1) The DPS is tasked and responsible for providing advice and suggestions to the Board of Directors and supervising the application of Sharia Principles in fund collection, financing, and other service activities of the BPRS. (2) The execution of the duties and responsibilities of the DPS as referred to in paragraph (1) includes among others:
a. supervising the process of developing new BPRS products; b. requesting fatwas from the National Sharia Board (DSN) for new BPRS products that do not yet have fatwas;
c. conducting periodic reviews of the mechanisms for fund collection and distribution as well as BPRS service provision; and
d. requesting data and information related to Sharia aspects from work units in the BPRS in the execution of its duties.
(3) The duties and responsibilities of the DPS as referred to in paragraph (1) refer to regulations governing the implementation guidelines for DPS duties that are in effect.

Article 42
(1) DPS members are appointed by the GMS.
(2) The appointment of DPS members as referred to in paragraph (1) is carried out after receiving a recommendation from the National Sharia Board – Indonesian Ulema Council (DSN-MUI).
(3) The appointment of DPS members becomes effective after receiving approval from the Financial Services Authority.
(4) Approval as referred to in paragraph (3) is given based at least on:
a. the results of the assessment of the commitment of DPS candidates in supervising the BPRS and the availability of time; and b. the results of interviews with DPS candidates.

Article 43
(1) The BPRS must submit plans for the dismissal and/or resignation of DPS members to the Financial Services Authority.
(2) The dismissal and/or resignation of DPS members as referred to in paragraph (1) can be carried out after receiving confirmation from the Financial Services Authority.
(3) The dismissal and/or resignation of DPS members are decided by the GMS and/or other mechanisms as regulated in the Articles of Association.

Third Section
Executive Officials

Article 44
(1) The appointment, replacement, or dismissal of Executive Officials of the BPRS must be reported by the BPRS Board of Directors to the Financial Services Authority no later than 10 (ten) working days calculated from the date of effective appointment, replacement, or dismissal. (2) If in the assessment and investigation of the Financial Services Authority, the Executive Officials as referred to in paragraph (1) are included in the DTL (List of Debtors in Default), non-performing loan list, or there is other information indicating non-compliance with integrity and competence aspects, then the appointment of such Executive Officials must be cancelled no later than 20 (twenty) working days from the date of the confirmation letter from the Financial Services Authority.

CHAPTER VI
BUSINESS ACTIVITIES

Article 45
In carrying out business activities, the BPRS must apply Sharia Principles and the principle of prudence.

CHAPTER VII
OPENING OF BPRS OFFICES

Article 46
(1) The BPRS may only open Branch Offices within the same province as the BPRS headquarters.
(2) The BPRS may only open Cash Offices within the same regency/city as its parent office and/or within a regency/city directly bordering the regency/city where the parent office is located within 1 (one) province. (3) Mobile Cash and Payment Point activities may only be carried out within the same regency/city as the parent office of the Mobile Cash and Payment Point. (4) The Special Capital Region of Jakarta, Bogor Regency/City, Depok City, Tangerang Regency/City, Tangerang Selatan City, and Bekasi Regency/City are treated as one province for the purpose of licensing the opening of Branch Offices. (5) In the event of regional expansion causing Cash Offices, Branch Offices, and the BPRS headquarters to be in different provinces, the BPRS may continue to operate in those areas.

First Section
Branch Offices

Article 47
(1) The BPRS must obtain approval from the Financial Services Authority to open Branch Offices.
(2) The submission of applications for the opening of Branch Offices as referred to in paragraph (1) must meet at least the following requirements:
a. included in the BPRS annual work plan; b. meeting organizational completeness and infrastructure including adequate information system technology and buildings;
c. having a Gross Non-Performing Financing (NPF) ratio of at most 7% (seven percent) for the last 6 (six) months;
d. not in a loss state in the last 1 (one) year; e. having a composite health rating of at least 2 (two) for the last 2 (two) assessment periods; f. having a Minimum Capital Requirement (KPMM) ratio of at least 12% (twelve percent) for the last 6 (six) months; g. not having exceeded and/or violated the Maximum Fund Disbursement Limit (BMPD); and h. not having violated regulations related to BPRS.

Article 48
(1) The Financial Services Authority grants approval or rejection of applications for the opening of Branch Offices no later than 40 (forty) working days from the date the application along with the required documents is received completely. (2) In order to grant approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts among others:
a. investigation into the fulfillment of requirements as well as the completeness and correctness of documents; b. assessment of the operational readiness of the Branch Office;
c. assessment of the analysis of the potential and feasibility of opening a branch office submitted by the BPRS; and
d. assessment of the financial performance of the BPRS.

Article 49
(1) The implementation of the opening of Branch Offices must be carried out no later than 20 (twenty) working days calculated from the date the license is issued.
(2) The implementation of the opening of Branch Offices as referred to in paragraph (1) must be reported by the BPRS Board of Directors to the Financial Services Authority no later than 10 (ten) working days from the date of opening. (3) If the time limit as referred to in paragraph (1) is exceeded and the BPRS does not carry out the opening of the Branch Office, the license for the opening of the Branch Office that has been granted is declared invalid.

Second Section
Cash Offices and Cash Service Activities

Article 50
Plans for the opening of Cash Offices and Cash Service Activities must be included in the BPRS annual work plan.

Article 51
(1) The BPRS must report the implementation of the opening of Cash Offices to the Financial Services Authority no later than 10 (ten) working days from the date of opening.
(2) Cash Offices as referred to in paragraph (1) may carry out the following activities:
a. accepting deposits for the purpose of opening savings or deposit accounts; b. accepting financing installments;
c. accepting customer savings deposits;
d. serving savings withdrawals for customers according to the authority granted by the parent office; e. accepting fund deposits for the purpose of bill payment services such as electricity, telephone, water, and others; f. accepting financing applications; and g. disbursing financing after the financing analysis and approval process by the parent office.

Article 52
(1) The BPRS must report the implementation of Mobile Cash and Payment Point activities to the Financial Services Authority no later than 10 (ten) working days from the date of implementation.
(2) Mobile Cash activities as referred to in paragraph (1) are:
a. accepting financing installments; b. accepting customer savings deposits;
c. serving savings withdrawals for customers according to the authority granted by the parent office; and
d. accepting fund deposits for the purpose of bill payment services such as electricity, telephone, water, and others.
(3) Payment Point activities as referred to in paragraph (1) are transaction services carried out based on cooperation agreements with third parties, namely:
a. accepting financing installments; b. accepting customer savings deposits;
c. serving savings withdrawals for customers according to the authority granted by the parent office;
d. accepting fund deposits for the purpose of bill payment services such as electricity, telephone, water, and others; and/or e. paying employee salaries/wages.

Article 53
The BPRS must combine the financial reports of Cash Offices, Mobile Cash activities, and Payment Points with the financial reports of the headquarters or Branch Offices that serve as the parent offices on the same day.

CHAPTER VIII
SERVICE ACTIVITIES USING AUTOMATED TELLER MACHINE CARDS AND/OR DEBIT CARDS

Article 54
(1) In the event that the BPRS plans to carry out service activities using ATM cards and/or debit cards, the BPRS must submit an application for a license as an issuer of ATM cards and/or debit cards to Bank Indonesia after receiving approval from the Financial Services Authority. (2) To obtain approval as referred to in paragraph (1), the BPRS submits an application for approval for service activities using ATM cards and/or debit cards to the Financial Services Authority with the following requirements:
a. the plan for service activities using ATM cards and/or debit cards has been included in the BPRS annual work plan; b. having a composite health rating of at least 2 (two) for the last 2 (two) assessment periods;
c. not in a loss state in the last 1 (one) year;
d. having adequate information system technology; and e. not having violated regulations related to BPRS.
(3) The Financial Services Authority grants approval or rejection of applications to carry out service activities using ATM cards and/or debit cards as referred to in letter 1 no later than 20 (twenty) working days from the date the application along with the required documents is received completely. (4) Service activities using ATM cards

and/or debit cards organized using PPE managed by the BPRS itself can only be conducted within the same province as the province where the BPRS headquarters is located.
(5) BPRS is required to report the use of PPE and any additional PPE managed by the BPRS itself to the Financial Services Authority.
(6) Service activities using ATM cards and/or debit cards can be conducted outside the province where the BPRS headquarters is located through cooperation with:
a. shared ATM networks; and/or b. commercial banks.
(7) BPRS is required to submit reports on service activities using ATM cards and/or debit cards as referred to in paragraph (4), paragraph (5), and paragraph (6) to the Financial Services Authority at the latest 10 (ten) working days from the date of implementation of the activity.

Article 55
BPRS is prohibited from conducting activities as an acquirer.

Article 56
BPRS is required to combine the financial reports of service activities using ATM cards and/or debit cards with the financial reports of the headquarters or Branch Office that serves as its parent office on the same day.

CHAPTER IX
TRANSFER OF OFFICE ADDRESS
First Section
Headquarters and Branch Offices

Article 57
(1) BPRS is required to obtain approval from the Financial Services Authority to transfer the address of its headquarters.
(2) The transfer of the headquarters address can be conducted throughout the territory of Indonesia.
(3) BPRS that transfers the address of its headquarters as referred to in paragraph (2) to a zone with higher paid-up capital establishment requirements than the zone of the BPRS's original headquarters must meet the paid-up capital establishment requirements for BPRS in the zone of the new BPRS headquarters. (4) The granting of approval for the transfer of the headquarters address as referred to in paragraph (1) is conducted in 2 (two) stages:
a. principle approval, which is approval to conduct preparations for the transfer of the headquarters address; and b. approval for the transfer of the headquarters address, which is approval to conduct the transfer of the headquarters address. (5) In the event that the transfer of the headquarters address is conducted within the same district/city as the previous location of the headquarters, the granting of approval for the transfer of the headquarters address is conducted in 1 (one) stage. (6) The application to obtain principle approval as referred to in paragraph (4) letter a is submitted by the BPRS to the Financial Services Authority at least accompanied by:
a. reasons for the transfer of the headquarters address and plans for settlement or transfer of claims and obligations; b. analysis of the potential and feasibility of transferring the headquarters address; and
c. minutes of the General Meeting of Shareholders regarding approval for the transfer of the office address.

(7) BPRS must settle or transfer claims and obligations within a maximum period of 120 (one hundred twenty) working days after the BPRS obtains principle approval.
(8) If the time period as referred to in paragraph (7) is exceeded and the BPRS does not submit an application for approval for the transfer of the headquarters address, the principle approval that has been granted is declared invalid. (9) The application to obtain approval for the transfer of the headquarters address as referred to in paragraph (4) letter b is submitted by the BPRS to the Financial Services Authority at least accompanied by:
a. operational readiness of the headquarters and Branch Offices; b. deed of amendment of the articles of association that has been approved by the competent agency;
c. proof of settlement or transfer of claims and obligations.
(10) The transfer of the headquarters is conducted after the settlement or transfer of the BPRS's claims and obligations at the original domicile.
(11) The Financial Services Authority grants approval or rejection for the application for approval for the transfer of the headquarters address as referred to in paragraph (4) letter b at the latest 40 (forty) working days from the date the application along with the required documents is received completely. (12) In the event of transferring the headquarters address to a different province, the BPRS must:
a. close and transfer the BPRS Branch Offices into the same province as the new BPRS headquarters; or b. close the BPRS Branch Offices.
(13) The mechanism for closing and transferring BPRS Branch Offices into the same province as the BPRS headquarters as referred to in paragraph (12) must comply with the regulations on the closing and opening of Branch Offices.

Article 58
(1) BPRS is required to obtain approval from the Financial Services Authority to transfer the address of a Branch Office.
(2) The transfer of the address of a Branch Office can only be conducted within the same province as the headquarters.
(3) Approval for the application for the transfer of the address of a Branch Office is given based on considerations, including:
a. reasons for the transfer of the Branch Office; b. operational readiness of the Branch Office;
c. results of analysis on performance at the old office location and business feasibility study at the new office location;
d. distance between the old and new office locations; e. number of customers who have been financed; and f. supporting infrastructure at the new office location.
(4) The Financial Services Authority grants approval or rejection for the application for the transfer of the address of a Branch Office as referred to in paragraph (3) at the latest 30 (thirty) working days from the date the application along with the required documents is received completely. (5) Specifically for the Special Capital Region of Jakarta, Bogor Regency or City, Depok City, Tangerang Regency or City, South Tangerang City, Bekasi Regency or City, they are treated as 1 (one) province for the purpose of transferring the address of Branch Offices.

Article 59
(1) BPRS is required to announce the transfer of the address of the headquarters and/or Branch Offices in a local daily newspaper and/or on the announcement board at the relevant BPRS office at the latest 10 (ten) working days before the implementation of the office address transfer. (2) BPRS is required to report the implementation of the transfer of the address of the headquarters and/or Branch Offices to the Financial Services Authority at the latest 10 (ten) working days from the date of implementation of the transfer. (3) If within a period of 40 (forty) working days calculated from the date of approval granted, the BPRS does not implement the transfer of the office address, then the approval for the transfer of the address of the headquarters and/or Branch Offices that has been issued will be reviewed.

Second Section
Cash Offices and Cash Service Activities

Article 60
(1) The transfer of the address of Cash Offices and Cash Service Activities can only be conducted within the same Regency/City as the location of the BPRS office that serves as its parent and/or within the same Regency/City that borders directly with the Regency/City of the parent office location in 1 (one) same province. (2) The transfer of the address of Cash Offices and Cash Service Activities must consider customer interests.

Article 61
(1) BPRS is required to announce the transfer of the address of Cash Offices to customers and the public at the latest 10 (ten) working days before the date of implementation.
(2) BPRS is required to report the implementation of the transfer of the address of Cash Offices and Cash Service Activities to the Financial Services Authority at the latest 10 (ten) working days from the date of implementation.

CHAPTER X
CLOSING OF OFFICES
First Section
Branch Offices

Article 62
BPRS is required to obtain approval from the Financial Services Authority to close a Branch Office.

Article 63
(1) The granting of approval for the closing of a Branch Office as referred to in Article 62 is conducted in 2 (two) stages, namely:
a. principle approval, which is approval to conduct preparations for the closing of the Branch Office; and b. closing approval, which is approval to conduct the closing of the Branch Office.
(2) The application to obtain principle approval as referred to in paragraph (1) letter a is submitted by the BPRS to the Financial Services Authority accompanied by documents consisting of an explanation regarding the steps to be taken in the framework of settling all obligations of the Branch Office to customers and other parties. (3) The application to obtain closing approval as referred to in paragraph (1) letter b is submitted by the BPRS to the Financial Services Authority after the settlement of all obligations of the Branch Office to customers and other parties as referred to in paragraph (2) has been carried out. (4) All obligations of the Branch Office to customers and other parties as referred to in paragraph (3) are settled within a maximum period of 120 (one hundred twenty) working days after the BPRS obtains principle approval, supported by documents of obligation settlement. (5) In the event that the time period as referred to in paragraph (4) is exceeded and the BPRS does not submit an application for approval for the closing of the Branch Office, the principle approval that has been granted is declared invalid. (6) The Financial Services Authority may conduct examinations of the BPRS regarding the settlement of all obligations of the Branch Office to be closed. (7) The Financial Services Authority grants approval or rejection for the application for approval for the closing of the Branch Office at the latest 10 (ten) working days after the required documents are received completely and all obligations have been settled. (8) The Financial Services Authority grants approval or rejection for the application for approval for the closing of the Branch Office as referred to in paragraph (7) based on:
a. examination of the completeness and truthfulness of documents; and b. examination of the settlement of obligations in accordance with applicable regulations.
(9) The closing of the Branch Office as referred to in paragraph (1) must be announced by the BPRS in a local daily newspaper and/or on the announcement board at all relevant BPRS offices, at the latest 10 (ten) working days from the date of principle approval from the Financial Services Authority is granted.

(10) Further regulations regarding documents as referred to in paragraph (2) are regulated with a Circular Letter of the Financial Services Authority.

Article 64
(1) BPRS is required to close the Branch Office at the latest 20 (twenty) working days from the date of closing approval from the Financial Services Authority.
(2) BPRS is required to announce the closing of the Branch Office as referred to in paragraph (1) in a local daily newspaper and/or on the announcement board at all relevant BPRS offices at the latest 10 (ten) working days from the date of closing approval from the Financial Services Authority. (3) BPRS is required to report the implementation of the closing of the Branch Office to the Financial Services Authority at the latest 10 (ten) working days from the date of implementation of the closing, accompanied by proof of announcement as referred to in paragraph (2).

Second Section
Cash Offices and Cash Service Activities

Article 65
BPRS is required to submit a report on the plan to close Cash Offices and Cash Service Activities to the Financial Services Authority accompanied by reasons for closing at the latest 20 (twenty) working days before implementation.

Article 66
BPRS is required to report the implementation of the closing of Cash Offices and Cash Service Activities to the Financial Services Authority at the latest 10 (ten) working days from the date of closing.

CHAPTER XI
AMENDMENT OF ARTICLES OF ASSOCIATION AND NAME
First Section
Amendment of Articles of Association

Article 67
BPRS is required to report every amendment to the articles of association of the BPRS at the latest 10 (ten) working days since the BPRS receives approval or receipt of notification of amendment of articles of association from the competent agency by attaching supporting documents.

Second Section
Change of Name

Article 68
(1) Change of name of the BPRS must be carried out by complying with legislation.
(2) BPRS that has obtained approval for the amendment of articles of association regarding the use of a new name from the competent agency is required to submit an application regarding the determination of the use of the business license held by the BPRS with the new name. (3) The application as referred to in paragraph (2) is submitted by the BPRS at the latest 20 (twenty) working days after the change of name receives approval from the competent agency accompanied by:
a. reasons for the change of name; b. deed of amendment of the articles of association; and
c. proof of approval for the amendment of the articles of association from the competent agency.
(4) In the event that the application for change of name of the BPRS is due to a change in ownership, the Financial Services Authority grants approval after the BPRS completes the entire ownership change process with reference to the regulations on ownership change in this Financial Services Authority Regulation. (5) The Financial Services Authority grants approval for the determination of the use of the BPRS business license with the new name as referred to in paragraph (2) at the latest 20 (twenty) working days from the date the application documents are received completely.

Article 69
(1) BPRS is required to announce the change of name to the public in a local daily newspaper and/or on the announcement board at the relevant BPRS office at the latest 20 (twenty) working days from the date of approval from the Financial Services Authority. (2) BPRS is required to submit proof of announcement as referred to in paragraph (1) to the Financial Services Authority at the latest 10 (ten) working days from the date of announcement.

CHAPTER XII
REVOCATION OF BUSINESS LICENSE AT THE REQUEST OF SHAREHOLDERS

Article 70
Shareholders of the BPRS may submit an application for revocation of the business license to the Financial Services Authority as long as the BPRS is not under special supervision as referred to in regulations regarding follow-up handling of BPRS under special supervision.

Article 71
The Financial Services Authority carries out the revocation of the business license of the BPRS at the request of the shareholders of the BPRS as referred to in Article 70 if the BPRS has settled all its obligations to customers and other creditors.

Article 72
The revocation of the business license at the request of the shareholders of the BPRS as referred to in Article 71 is conducted in 2 (two) stages:
a. principle approval for the revocation of the business license; b. approval for the revocation of the business license.

First Section
Principle Approval for Revocation of Business License

Article 73
BPRS submits an application for principle approval for the revocation of the business license as referred to in Article 72 letter a to the Commissioners of the Financial Services Authority by attaching:
a. minutes of the General Meeting of Shareholders regarding approval for the plan to revoke the business license at the request of the shareholders of the BPRS; b. reasons for revoking the business license at the request of the shareholders of the BPRS;
c. plan to settle all obligations of the BPRS to customers, creditors, employees, and other parties;
d. latest financial report; and e. proof of settlement of taxes and other obligations to the state.

Article 74
(1) The Financial Services Authority conducts an examination of the application for principle approval for the revocation of the business license submitted by the BPRS as referred to in Article 73.
(2) BPRS that has obtained principle approval for the revocation of the business license based on the examination results of the application as referred to in paragraph (1) is required to:
a. stop all business activities of the BPRS; b. announce the plan to dissolve the legal entity of the BPRS and the plan to settle the obligations of the BPRS in a local daily newspaper and/or on the announcement board at all relevant BPRS offices at the latest 10 (ten) working days from the date of the principle approval letter for the revocation of the business license of the BPRS;
c. settle all obligations of the BPRS within a maximum period of 6 (six) months from the date of the principle approval letter for the revocation of the business license of the BPRS; and
d. appoint a public accounting firm to prepare the final balance sheet including conducting verification to ensure the settlement of all obligations of the BPRS.
(3) In the event that the BPRS cannot settle all obligations within the time period as referred to in paragraph (2) letter c, the BPRS must submit a follow-up plan for settling the obligations of the BPRS and take steps in accordance with applicable legislation.

Second Section
Approval for Revocation of Business License

Article 75
BPRS submits an application for revocation of the business license of the BPRS to the Financial Services Authority after all obligations of the BPRS as referred to in Article 74 paragraph (2) are settled, attached with documents at least covering:
a. report on the implementation of the cessation of business activities of the BPRS; b. report and proof of implementation of announcement;
c. report and proof of implementation of the settlement of obligations of the BPRS;
d. final balance sheet of the BPRS; and e. statement letter from the shareholders of the BPRS.

Article 76
(1) The Financial Services Authority conducts an examination of the application documents for revocation of the business license submitted by the BPRS as referred to in Article 75.
(2) Based on the examination results of the application documents for revocation of the business license as referred to in paragraph (1), the Financial Services Authority issues a Decision Letter on the Revocation of the Business License of the BPRS and orders the BPRS to dissolve the legal entity and announce the end or dissolution of the legal entity in accordance with applicable legislation.

Article 77
The status of the legal entity of the BPRS ends from the date of the announcement of the end of the legal entity of the BPRS in the State Gazette of the Republic of Indonesia in accordance with legislation.

Article 78
Since the end of the status of the legal entity of the BPRS as referred to in Article 77, if later obligations that have not been settled appear, the shareholders of the BPRS are responsible for all obligations of the BPRS.

CHAPTER XIII
BPRS OFFICES NOT OPERATING ON WORKING DAYS

Article 79
(1) BPRS may temporarily close the BPRS office outside official holidays for certain reasons.
(2) Temporary office closure as referred to in paragraph (1) is conducted for a maximum of 5 (five) working days within a period of 1 (one) calendar year.
(3) BPRS submits a report on the plan to temporarily close the BPRS office outside official holidays to the Financial Services Authority at the latest 5 (five) working days before the implementation of the temporary closure. (4) BPRS is required to announce the date of temporary office closure to the public in a local daily newspaper and/or on the announcement board at all relevant BPRS offices at the latest 5 (five) working days before the date of closure. (5) BPRS is required to submit proof of announcement of temporary office closure to the Financial Services Authority at the latest 3 (three) working days from the date of announcement as referred to in paragraph (4). (6) BPRS is required to submit a report on the reopening of the office at the latest 5 (five) working days from the date of reopening.

CHAPTER XIV
BPRS OFFICES OPERATING OUTSIDE OPERATIONAL DAYS

Article 80
(1) BPRS may conduct operational activities outside operational days and on national holidays.
(2) Operational activities as referred to in paragraph (1) can be conducted for all and/or part of the BPRS offices.
(3) BPRS is required to submit a report on the plan of the BPRS to conduct operational activities outside operational days and on national holidays as referred to in paragraph (1) and paragraph (2) to the Financial Services Authority at the latest 10 (ten) working days before the implementation of the operational activities.

CHAPTER XV
PLACEMENT OF STATUS AND LOGO AT BPRS OFFICES

Article 81
(1) BPRS is required to clearly state the name and type of office status at each of its offices.
(2) BPRS is required to place the iB logo on forms, documents, products, and offices as well as Cash Service Activities of the BPRS.

CHAPTER XVI
SANCTIONS

Article 82
(1) BPRS that does not comply with the provisions in Article 5, Article 11 paragraph (2), Article 14 paragraph (1), Article 15, Article 16 paragraph (1), Article 17, Article 18, Article 21 paragraph (1) and paragraph (3), Article 23, Article 25, Article 26 paragraph (2), Article 27 paragraph (1) paragraph (5) paragraph (6) and paragraph (7), Article 28 paragraph (1), paragraph (2), paragraph (3) and paragraph (5), Article 29 paragraph (3), Article 30 paragraph (1), paragraph (2), paragraph (3), paragraph (6), paragraph (7), and paragraph (8), Article 31, Article 32, Article 33, Article 34, Article 35 paragraph (1), Article 36 paragraph (1), Article 37, Article 39 paragraph (1) and paragraph (2), Article 40, Article 43 paragraph (1), Article 44 paragraph (2), Article 45, Article 47 paragraph (1), Article 49 paragraph (1), Article 53, Article 54 paragraph (1) paragraph (4) and paragraph (5), Article 55, Article 56, Article 57 paragraph (1), Article 58 paragraph (1), Article 60 paragraph (1), Article 62, Article 64 paragraph (1), Article 68 paragraph (1) and paragraph (2), Article 74 paragraph (2), Article 79 paragraph (2) and paragraph (4), and Article 81 shall be subject to administrative sanctions in accordance with Article 58 of Law Number 21 of 2008 concerning Sharia Banking, consisting of:
a. written reprimand; b. downgrade of health level;
c. suspension of certain business activities;
d. dismissal of management and subsequently appointing and appointing temporary replacements until the General Meeting of Shareholders appoints permanent replacements with the approval of the Financial Services Authority; e. inclusion of management members, employees, and shareholders in the list of persons of good repute in the banking field; and/or f. revocation of business license. (2) BPRS that does not comply with the provisions in Article 14 paragraph (2), Article 16 paragraph (3), Article 21 paragraph (4), Article 22, Article 24 paragraph (9) and paragraph (10), Article 35 paragraph (8), Article 36 paragraph (3) paragraph (4), Article 38 paragraph (2), Article 44 paragraph (1), Article 49 paragraph (2), Article 51 paragraph (1), Article 52 paragraph (1), Article 54 paragraph (7), Article 59 paragraph (1) and paragraph (2), Article 61, Article 63 paragraph (9), Article 64 paragraph (2) and paragraph (3), Article 65, Article 66, Article 67, Article 69, Article 79 paragraph (5) and paragraph (6), and Article 80 paragraph (3) shall be subject to administrative sanctions in accordance with Article 58 of Law Number 21 of 2008 concerning Sharia Banking, consisting of:
a. written reprimand and a monetary fine of Rp100,000.00 (one hundred thousand rupiah) per working day of delay for each report and/or announcement or at most Rp1,000,000.00 (one million rupiah) for each report and/or announcement; b. written reprimand and a monetary fine of at most Rp1,000,000.00 (one million rupiah) if the BPRS does not submit reports and/or carry out announcements. (3) BPRS is declared not to have submitted reports and/or announcements as referred to in paragraph (2) letter b if the BPRS has not submitted reports and/or carried out announcements after 20 (twenty) working days from the final deadline for submitting reports and/or carrying out announcements. (4) The imposition of sanctions of written reprimand and monetary fines for not submitting reports and/or carrying out announcements as referred to in paragraph (2) letter b does not eliminate the obligation of the BPRS to submit reports and/or carry out announcements. (5) Any party that does not comply with the provisions in Article 4 and Article 11 paragraph (2) may be subject to criminal sanctions in accordance with Article 59 of Law Number 21 of 2008 concerning Sharia Banking.

Article 83
BPRS that violates the provisions on the obligation to have 1 (one) shareholder with a share ownership percentage of at least 25% (twenty-five percent) as referred to in Article 20 shall be subject to sanctions consisting of:
a. written reprimand; b. downgrade of BPRS health level by one predicate;
c. suspension of the right to receive dividends for shareholders;
d. temporary suspension of part of the BPRS's operational activities; and/or e. prohibition on opening office networks and Foreign Exchange Trader (PVA) activities.

CHAPTER XVII
TRANSITIONAL PROVISIONS

Article 84
(1) Principle approval for the establishment of BPRS that has been issued by the Financial Services Authority before this Financial Services Authority Regulation comes into force is declared to remain valid. (2) Parties that have obtained principle approval as referred to in paragraph (1) may submit an application for business license for the establishment of BPRS accompanied by complete documents with reference to the provisions in Bank Indonesia Regulation Number 11/23/PBI/2009 concerning Rural Financing Banks

Sharia until December 31, 2016.
(3) Applications for the principle approval of the establishment of Islamic Microfinance Banks (BPRS) submitted to the Financial Services Authority before this Financial Services Authority Regulation takes effect, but which have not yet received approval or rejection, must comply with the provisions of this Financial Services Authority Regulation. (4) Applications for the opening of Branch Offices and applications for Cash Service Activities using Cash Processing Facilities (PPE) including ATMs, ADMs, and EDCs, relocation of office addresses and ATM and/or ADM device locations, use of BPRS business licenses under new names, and office closures submitted to the Financial Services Authority before this Financial Services Authority Regulation takes effect, but which have not yet received approval or rejection, must comply with the provisions of this Financial Services Authority Regulation.

Article 85
BPRS that do not yet have at least 1 (one) shareholder with a share ownership percentage of at least 25% (twenty-five percent) as of the date this Financial Services Authority Regulation takes effect, must adjust share ownership in accordance with the provisions in Article 20 no later than December 31, 2020.

Article 86
(1) BPRS that have submitted applications for business licenses for the establishment of BPRS before this Financial Services Authority Regulation takes effect and have obtained business licenses after this Financial Services Authority Regulation takes effect, but do not yet have 1 (one) shareholder with a share ownership percentage of at least 25% (twenty-five percent), must prepare a plan to fulfill these obligations formulated in the form of an action plan with the approval of the General Meeting of Shareholders (GMS). (2) The action plan referred to in paragraph (1) must be submitted to the Financial Services Authority no later than 6 (six) months from the date of the BPRS business license.

Article 87
Members of the Board of Directors who individually and/or collectively own at least 25% (twenty-five percent) of BPRS shares as of the date this Financial Services Authority Regulation takes effect, must make adjustments to the provisions in Article 27 paragraph (7) no later than December 31, 2020.

Article 88
In the event that a BPRS has members of the Board of Directors or members of the Board of Commissioners who hold concurrent positions and/or have family or in-law relationships up to the second degree as of the date this Financial Services Authority Regulation takes effect, the BPRS must adjust the composition of the Board of Directors or Board of Commissioners members in accordance with the provisions in Article 28 paragraph (2) and (3), Article 31 paragraph (2), and Article 32 no later than December 31, 2018.

Article 89
BPRS that have a number of Board of Commissioners members exceeding the number of Board of Directors members or more than 3 (three) members as of the date this Financial Services Authority Regulation takes effect, must adjust the number of Board of Commissioners members in accordance with the provisions in Article 30 paragraph (1) and (2) no later than December 31, 2017.

Article 90
Board of Commissioners members who do not yet possess the Work Competency Certificate as referred to in Article 30 paragraph (6) as of the date this Financial Services Authority Regulation takes effect, must possess the Work Competency Certificate no later than December 31, 2018.

CHAPTER XVIII
CLOSING PROVISIONS

Article 91
Further provisions regarding this Financial Services Authority Regulation are regulated in a Circular Letter of the Financial Services Authority.

Article 92
Upon the taking effect of this Financial Services Authority Regulation, all implementing regulations of Bank Indonesia Regulation Number 11/23/PBI/2009 dated July 1, 2009 concerning Islamic Microfinance Banks (State Gazette of the Republic of Indonesia Year 2009 Number 101 DPbS, Supplement to the State Gazette of the Republic of Indonesia Number 5027 DPbS) are declared to remain in force insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 93
Upon the taking effect of this Financial Services Authority Regulation, Bank Indonesia Regulation Number 11/23/PBI/2009 dated July 1, 2009 concerning Islamic Microfinance Banks (State Gazette of the Republic of Indonesia Year 2009 Number 101 DPbS, Supplement to the State Gazette of the Republic of Indonesia Number 5027 DPbS) is repealed and declared invalid.

Article 94
Provisions regulating the revocation of business licenses upon request by shareholders as regulated in the Board of Directors Decision of Bank Indonesia No. 32/54/KEP/DIR dated May 14, 1999 concerning Revocation of Business Licenses, Dissolution, and Liquidation of Rural Credit Banks are declared invalid.

Article 95
This Financial Services Authority Regulation takes effect on the date of its promulgation.
To ensure that everyone knows it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta
On the date of 21 Jan 2016
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY

signed
MULIAMAN D. HADAD

Promulgated in Jakarta
On the date of 27 January 2016
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 15 Copy in accordance with the original Legal Director 1 Ministry of Law

signed
Yuliana

Financial Services Authority Regulation Number 3 of 2016 Concerning Sharia Rural Financing Banks

Lineage: In force