FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 56 /POJK.03/2016

CONCERNING

SHARE OWNERSHIP OF COMMERCIAL BANKS

BY THE GRACE OF GOD THE ALMIGHTY,

THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to face the dynamics of regional and global economic development, the national banking industry needs to increase its resilience; b. that the increase in banking resilience is carried out through the increased application of prudential principles and governance;
c. that to increase the implementation of prudential principles and governance, it is necessary to organize the share ownership structure of banks;
d. that the organization of the share ownership structure of banks is carried out through the application of maximum share ownership limits so as to reduce ownership dominance that can have a negative impact on bank operations; e. that the application of maximum share ownership limits will also have a positive impact in encouraging banking consolidation in order to strengthen the resilience of the national banking industry; f. that based on the considerations as referred to in letters a to e, it is necessary to establish a Financial Services Authority Regulation concerning Share Ownership of Commercial Banks;

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 (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 Islamic 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);

DECIDING:

To establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING SHARE OWNERSHIP OF COMMERCIAL BANKS.

CHAPTER I

GENERAL PROVISIONS

Article 1

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

1. Bank means a commercial bank as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998 and a commercial Islamic bank as referred to in Law Number 21 of 2008 concerning Islamic Banking, excluding branch offices of banks located outside the country.
2. Governance means governance as referred to in regulations governing the application of governance for commercial banks, commercial Islamic banks, and Islamic business units.
3. Bank Health Level means the bank health level as referred to in regulations governing the assessment of the health level of commercial banks, commercial Islamic banks, and Islamic business units.
4. Capital means paid-up Capital of the Bank.

CHAPTER II

MAXIMUM SHARE OWNERSHIP LIMITS

Article 2

(1) In order to organize the ownership structure, the Financial Services Authority sets maximum share ownership limits at Banks based on:
a. the category of shareholders; and b. the interconnection among shareholders.

(2) The maximum share ownership limits at Banks for each category of shareholder are established as follows:
a. 40% (forty percent) of Bank Capital, for the category of shareholders being legal entities of banking financial institutions and non-banking financial institutions; b. 30% (thirty percent) of Bank Capital, for the category of shareholders being legal entities that are not financial institutions; and
c. 20% (twenty percent) of Bank Capital, for the category of individual shareholders.

(3) The maximum share ownership limit as referred to in paragraph (2) letter c for commercial Islamic banks is 25% (twenty-five percent) of Bank Capital.

(4) Non-banking financial institutions as referred to in paragraph (2) letter a are non-banking financial institutions that meet the criteria:
a. in their establishment in accordance with legislation, they are permitted to engage in long-term participation activities; and b. they are supervised and regulated by financial institution authorities.

(5) Non-banking financial institutions that do not meet the criteria as referred to in paragraph (4) are treated as legal entities that are not financial institutions and may only hold shares with a maximum ownership limit at Banks of 30% (thirty percent) of Bank Capital.

Article 3

The maximum share ownership limits do not apply to:
a. The Central Government; and b. institutions that have the function of handling and/or rescuing Banks.

Article 4

(1) The interconnection among Bank shareholders as referred to in Article 2 paragraph (1) letter b is based on:
a. the existence of ownership relationships; b. the existence of family relationships up to the second degree; and/or
c. the existence of cooperation or concerted actions to achieve common goals in controlling the Bank (acting in concert) with or without a written agreement so that together they have option rights or other rights to own Bank shares.

(2) Shareholders who have interconnections as referred to in paragraph (1) are established as 1 (one) party.

(3) The maximum share ownership limits for shareholders established as 1 (one) party as referred to in paragraph (2) are:
a. the total share ownership in 1 (one) party equals the highest ownership limit of the shareholder category within that party; and b. the ownership composition of each shareholder in 1 (one) party is at most equal to the maximum ownership limit according to the shareholder category.

Article 5

(1) Bank shareholders who meet the criteria as controlling shareholders, in addition to being subject to this Financial Services Authority Regulation, are also subject to regulations governing controlling shareholders.

(2) Prospective controlling shareholders who are foreign citizens and/or legal entities located outside the country, in addition to being subject to the provisions as referred to in paragraph (1), must meet the requirements:
a. to have a commitment to support the development of the Indonesian economy through the owned Bank; b. to obtain a recommendation from the supervisory authority of the country of origin for legal entity financial institutions; and
c. to have a rating of at least:

1. 1 (one) notch above the lowest investment grade rating for legal entity banking financial institutions;
2. 2 (two) notch above the lowest investment grade rating for legal entity non-banking financial institutions; or
3. 3 (three) notch above the lowest investment grade rating for legal entities that are not financial institutions.

Article 6

(1) Legal entity banking financial institutions may own shares of a Bank exceeding 40% (forty percent) of Bank Capital provided they obtain approval from the Financial Services Authority.

(2) Legal entity banking financial institutions as referred to in paragraph (1) must meet the requirements:
a. to obtain a Bank Health Level assessment with Composite Rating 1 or Composite Rating 2 or an equivalent Bank Health Level rating for banking financial institutions located outside the country; b. to meet the Minimum Capital Requirement provisions according to risk profile;
c. to have core capital (tier 1) of at least 6% (six percent);
d. to obtain a recommendation from the banking financial institution supervisory authority, for banking financial institutions located outside the country; e. to be a banking financial institution that has become a publicly listed company (go public); f. to commit to fulfilling the obligation to purchase equity-like debt instruments issued by the Bank to be owned; g. to commit to owning the Bank for at least a certain period; and h. to commit to supporting the development of the Indonesian economy through the owned Bank.

Article 7

Banks that can be owned by legal entity banking financial institutions with an amount exceeding 40% (forty percent) of Bank Capital as referred to in Article 6 must at least meet the criteria:
a. to conduct a go public to achieve public ownership of at least 20% (twenty percent) of Bank Capital, to be carried out no later than 5 (five) years since the legal entity banking financial institution owns shares in accordance with the approval of the Financial Services Authority as referred to in Article 6 paragraph (1); and b. to have approval to issue equity-like debt instruments.

Article 8

(1) Legal entity banking financial institutions that will become Bank shareholders and have obtained approval from the Financial Services Authority as referred to in Article 6 paragraph (1) may purchase Bank shares in stages:
a. conducting share purchases up to the maximum ownership limit as referred to in Article 2 and Article 4; and b. increasing Bank shares in accordance with the ownership limit approved by the Financial Services Authority if the owned Bank obtains a Bank Health Level assessment and Governance assessment of Rating 1 (one) or 2 (two) for 3 (three) consecutive assessment periods within a 5 (five) year period, calculated from the approval of the Financial Services Authority as referred to in Article 6 paragraph (1).

(2) While the owned Bank cannot obtain the Bank Health Level assessment and Governance assessment as referred to in paragraph (1) letter b, the legal entity banking financial institution may only own shares up to a maximum limit of 40% (forty percent) of Bank Capital.

Article 9

The stages as referred to in Article 8 do not apply to legal entity banking financial institutions that already owned Bank shares before July 13, 2012 and have obtained approval from the Financial Services Authority as referred to in Article 6 paragraph (1).

CHAPTER III

OBLIGATIONS FOR THE APPLICATION OF MAXIMUM SHARE OWNERSHIP LIMITS

Article 10

(1) Shareholders who own Bank shares exceeding the maximum ownership limit as referred to in Article 2 and Article 4 are required to adjust to the maximum share ownership limit if:
a. the Bank experiences a decline in Bank Health Level assessment and/or Governance assessment to Rating 3, Rating 4, or Rating 5 for 3 (three) consecutive assessment periods; or b. the shareholder voluntarily sells the shares owned.

(2) Shareholders as referred to in paragraph (1) are required to adjust to the maximum share ownership limit within a maximum period of 5 (five) years after the last assessment period or the sale of shares owned.

Article 11

(1) Shareholders who will own:
a. Banks under handling or rescue by the Deposit Insurance Corporation; b. Banks under special supervision; or
c. Banks under intensive supervision,
may own Bank shares exceeding the maximum ownership limit as referred to in Article 2 and Article 4 for a certain period.

(2) Shareholders as referred to in paragraph (1) are required to adjust to the maximum share ownership limit as referred to in Article 2 and Article 4 within a period:
a. of at most 20 (twenty) years since purchasing:

1. Banks under handling or rescue by the Deposit Insurance Corporation; or
2. Banks under special supervision; or
   b. of at most 15 (fifteen) years since purchasing Banks under intensive supervision.

Article 12

(1) Shareholders in Banks that undergo merger or consolidation may own shares of the resulting merged or consolidated Bank exceeding the maximum ownership limit as referred to in Article 2 and Article 4 for a certain period.

(2) For shareholders in the resulting merged or consolidated Bank originating from Banks that obtained a Bank Health Level assessment and Governance assessment of Rating 1 or Rating 2, they are required to adjust to the maximum share ownership limit as referred to in Article 2 and Article 4 within a maximum of 10 (ten) years since:
a. the decline in the Bank Health Level assessment and/or Governance assessment of the resulting merged or consolidated Bank to Rating 3, Rating 4, or Rating 5 for 3 (three) consecutive periods; or b. the sale of shares initiated by themselves, which occurs within a period of at most 10 (ten) years after the merger or consolidation.

(3) For shareholders in the resulting merged or consolidated Bank originating from Banks that obtained a Bank Health Level assessment and/or Governance assessment of Rating 3, Rating 4, or Rating 5, they are required to adjust to the maximum share ownership limit as referred to in Article 2 and Article 4 within a maximum of 20 (twenty) years since the merger or consolidation.

Article 13

For shareholders in commercial Islamic banks resulting from the spin-off of Islamic business units, the following rules apply:
a. they may own shares exceeding the maximum ownership limit; and b. they are required to adjust share ownership to the maximum share ownership limit as referred to in Article 2 and Article 4 no later than December 31, 2028.

Article 14

For Regional Governments that already own shares in regional development banks, they may adjust to the maximum share ownership limit.

Article 15

In the event that a regional development bank obtains a Bank Health Level assessment and/or Governance assessment of Rating 3, Rating 4, or Rating 5 and requires additional capital:
a. capital increases are prioritized from investors not related to the Regional Government; and b. the Regional Government may still maintain Regional Government ownership as the majority shareholder.

Article 16

(1) Banks owned by shareholders who are required to adjust to the maximum ownership limit as referred to in Article 10 are required to formulate an action plan to adjust to the maximum share ownership limit.

(2) The action plan to adjust to the maximum share ownership limit as referred to in paragraph (1) must obtain approval from the General Meeting of Shareholders (GMS) and be submitted no later than 4 (four) months since the obligation to adjust to the maximum share ownership limit arises to obtain approval from the Financial Services Authority.

(3) The action plan to adjust to the maximum share ownership limit as referred to in paragraph (2) must at least contain the method of adjusting the maximum share ownership limit, implementation stages, and timeframes.

(4) Banks are required to submit reports on the implementation of the action plan to adjust to the maximum share ownership limit as referred to in paragraph (1) to the Financial Services Authority no later than 10 (ten) working days since the realization of the action plan or in accordance with the stages of the action plan.

(5) The submission of the action plan and implementation reports to adjust to the maximum share ownership limit as referred to in paragraph (1) and paragraph (4) is addressed to:
a. the Bank Supervision Department, Islamic Banking Department, or Financial Services Authority Regional Office in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province; or b. the Financial Services Authority Regional Office or local Financial Services Authority Office, for Banks headquartered outside the Special Capital Region of Jakarta Province.

CHAPTER IV

CONSEQUENCES OF OBLIGATIONS TO FULFILL MAXIMUM SHARE OWNERSHIP

Article 17

(1) Shareholders who do not fulfill the obligation to adjust to the maximum ownership limit as referred to in Article 10 paragraph (1), Article 10 paragraph (2), Article 11 paragraph (2), Article 12 paragraph (2), Article 12 paragraph (3), and/or Article 13 letter b are subject to restrictions in the form of:
a. the relevant party's rights in the calculation of quorum and decision-making in the GMS are only counted up to the maximum share ownership limit of the Bank as referred to in Article 2 and Article 4; and b. dividend payments for excess shares owned are postponed until the relevant party adjusts to the maximum share ownership limit.

(2) In addition to the restrictions as referred to in paragraph (1), shareholders who do not fulfill the obligation to adjust to the maximum share ownership limit may be subject to a review of fitness and propriety.

(3) The restrictions as referred to in paragraph (1) do not eliminate the shareholder's obligation to adjust ownership to the maximum share ownership limit.

Article 18

Banks owned by shareholders who do not fulfill the obligation to adjust to the maximum ownership limit as referred to in Article 10 paragraph (1), Article 10 paragraph (2), Article 11 paragraph (2), Article 12 paragraph (2), Article 12 paragraph (3), and/or Article 13 letter b:
a. are required to record the relevant party's rights as a shareholder at most equal to the maximum share ownership limit as referred to in Article 2 and Article 4; b. are required to ensure the use of voting rights for the relevant party and the calculation of quorum in the GMS at most equal to the maximum share ownership limit as referred to in Article 2 and Article 4;
c. are required to postpone dividend payments for excess shares owned by the relevant shareholder until the relevant party adjusts to the maximum share ownership limit; and
d. are prohibited from granting or extending the term of funding facilities to the relevant shareholder, including to parties related to the shareholder.

CHAPTER V

OTHER PROVISIONS

Article 19

The Financial Services Authority, based on certain considerations, may grant approval to shareholders to own Bank shares exceeding the maximum ownership limit as referred to in Article 2 and Article 4 for a certain period.

Article 20

The Financial Services Authority may order shareholders as referred to in Article 17 to have the owned Bank undergo merger or consolidation.

CHAPTER VI

SANCTIONS

Article 21

(1) Banks that violate the obligations as referred to in Article 16 paragraph (1), Article 16 paragraph (2), Article 16 paragraph (4), and/or Article 18 are subject to administrative sanctions in the form of:
a. written reprimand; b. prohibition on opening new office networks; and/or
c. suspension of certain business activities.

(2) The Financial Services Authority may conduct a review of fitness and propriety against members of the Board of Directors and/or members of the Board of Commissioners in Banks as referred to in paragraph (1).

CHAPTER VII

TRANSITIONAL PROVISIONS

Article 22

(1) Shareholders who already have the obligation to adjust to the maximum share ownership limit at Banks based on the results of Bank Health Level assessment and/or Governance assessment obtaining Rating 3, Rating 4, or Rating 5 in the final assessment position of December 2013, must still adjust share ownership to the maximum share ownership limit as referred to in Article 2 and Article 4 no later than January 1, 2019.

(2) Shareholders who already have the obligation to adjust to the maximum share ownership limit at Banks based on Bank Health Level assessment and/or Governance assessment obtaining Rating 1 or Rating 2 in the final assessment position of December 2013, but since January 1, 2014 until before the implementation of this Financial Services Authority Regulation:
a. the Bank experiences a decline in Bank Health Level assessment and/or Governance assessment to Rating 3, Rating 4, or Rating 5 for 3 (three) consecutive assessment periods; or b. the shareholder voluntarily sells the shares owned, must still adjust share ownership to the maximum share ownership limit as referred to in Article 2 and Article 4 within a maximum of 5 (five) years after the last assessment period or the sale of shares owned.

(3) Banks owned by shareholders who are required to adjust to the maximum share ownership limit as referred to in paragraph (1) and paragraph (2) must formulate and submit action plans and implementation reports to adjust to the maximum share ownership limit as referred to in Article 16.

(4) Shareholders who do not fulfill the obligation to adjust to the maximum share ownership limit as referred to in paragraph (1) and paragraph (2) are subject to the consequences of fulfilling the maximum share ownership limit as referred to in Article 17.

(5) Banks owned by shareholders who do not fulfill the obligation to adjust to the maximum share ownership limit as referred to in paragraph (1) and paragraph (2) must take actions as referred to in Article 18.

CHAPTER VIII

CLOSING PROVISIONS

Article 23

Upon the implementation of this Financial Services Authority Regulation, Bank Indonesia Regulation Number 14/8/PBI/2012 dated July 13, 2012 concerning Share Ownership of Commercial Banks (State Gazette of the Republic of Indonesia Year 2012 Number 144, Supplement to the State Gazette of the Republic of Indonesia Number 5327) is repealed and declared invalid.

Article 24

This Financial Services Authority Regulation takes effect upon being promulgated.

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 July 7, 2016

CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY,

signed

MULIAMAN D. HADAD

Promulgated in Jakarta on December 9, 2016

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 287

Copy in accordance with the original

Director of Law 1
Ministry of Law

signed

Yuliana

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 56 /POJK.03/2016

CONCERNING

SHARE OWNERSHIP OF COMMERCIAL BANKS

I. GENERAL

The global financial crisis triggered by the failure of Governance implementation at Banks caused the Basel Committee on Banking Supervision (BCBS) to issue guidelines titled Principles for Enhancing Corporate Governance, which require supervisory authorities to take steps to ensure that ownership structures do not hinder the realization of good Governance. Along with the plan for financial sector integration of the Association of South-East Asian Nations (ASEAN) in 2020, which allows banks with certain qualifications (Qualified ASEAN Banks) to operate freely in the ASEAN region, the national banking industry needs to increase its resilience, competitiveness, and efficiency.

Furthermore, by observing and studying several cases of problematic Banks in Indonesia after the 1997 financial crisis, it is indicated that ownership dominance by 1 (one) party at Banks is closely related and negatively correlated with the implementation of Governance in the banking sector.

Based on these matters, the Financial Services Authority deems it necessary to regulate the ownership structure of Banks by establishing maximum share ownership limits to increase banking resilience through the application of prudential principles and the quality of Governance implementation at Banks, so that it is expected that...

can encourage banking consolidation which in turn can strengthen national banking resilience.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Paragraph (1)
Clear enough.
Paragraph (2)
Letter a
What is meant by "legal entity" is an Indonesian legal entity or a foreign legal entity.
Letter b
What is meant by "legal entity" is an Indonesian legal entity or a foreign legal entity.
Letter c
What is meant by "individual" is a person, either an Indonesian citizen or a foreign citizen.
Paragraph (3)
The determination of the maximum share ownership limit in this paragraph is in accordance with the Law regarding Sharia Banking.
What is meant by "individual" is a person, either an Indonesian citizen or a foreign citizen.
Paragraph (4)
Examples of non-bank financial institutions that meet the criteria of this paragraph include financing companies, insurance companies, and pension funds.
Paragraph (5)
Examples of non-bank financial institutions include special purpose vehicles, fund managers, and hedge funds.

Article 3
Letter a
Central Government, namely the Government of the Republic of Indonesia.
Central Government ownership in Banks can be direct or indirect ownership through legal entities directly controlled by the Central Government.
Central Government ownership in Banks that can exceed the maximum share ownership limit is intended to support the achievement of goals to increase general welfare. Letter b Institutions that have the function of handling and/or rescuing Banks include the Deposit Insurance Agency as referred to in the Law regarding the Deposit Insurance Agency.

Article 4
Paragraph (1)
Letter a
Ownership relationships occur when among shareholders:

1. individuals with legal entities; or
2. legal entities with legal entities,
   there is an ownership connection in that legal entity with the ownership amount at least meeting the threshold as a controlling shareholder.
   Tracing of ownership relationships is conducted up to the ultimate shareholder.
   Example:
   Mr. A owns shares of Bank X amounting to 10% of Bank X's Capital.
   PT B, a non-financial institution legal entity, owns shares of Bank X amounting to 25% of Bank X's Capital.
   Mr. A owns 30% of the capital of PT B, so between Mr. A and PT B there is a connection due to ownership relationships.

Letter b
What is meant by "having family relations up to the second degree" is as referred to in regulations regarding the maximum limit for granting credit.
Letter c
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
PT A, a financial institution legal entity, owns shares of Bank X amounting to 60% of Bank X's Capital.
PT B, a non-financial institution legal entity, owns shares of Bank X amounting to 20% of Bank X's Capital.
PT A and PT B have the same controlling shareholder, namely Mr. Z, so PT A and PT B constitute 1 (one) party.
According to the shareholder category, the maximum ownership limit for PT A is 40% of Bank X's Capital and for PT B is 30% of Bank X's Capital.
Thus, the maximum combined ownership limit for PT A and PT B on Bank X as 1 (one) party is 40% of Bank X's Capital, with the limitation that PT B's share ownership is at most 30%. Examples of possible compositions are as follows:
a. if PT A owns 40% of Bank X's Capital, then PT B's share ownership in Bank X is 0%; b. if PT A owns 30% of Bank X's Capital, then PT B's share ownership in Bank X is 10%; or
c. if PT A owns 10% of Bank X's Capital, then PT B's share ownership in Bank X is 30%.

Article 5
Paragraph (1)
What is meant by "regulations regarding controlling shareholders" are regulations regarding commercial banks, Sharia commercial banks, and the assessment of competence and propriety for key parties of financial service institutions. Paragraph (2) Letter a Clear enough. Letter b The recommendation must at least contain information regarding good reputation and never having committed disgraceful acts in the banking field. Letter c The rating used is the result of an assessment by a rating agency recognized by the Financial Services Authority.

Article 6
Paragraph (1)
Clear enough.
Paragraph (2)
Letter a
Clear enough.
Letter b
What is meant by "Minimum Capital Requirement" is the minimum capital requirement as regulated in Financial Services Authority regulations regarding minimum capital requirements for Banks or similar regulations regulated by the banking financial institution supervisory authority where the bank is located. Letter c What is meant by "core capital" is core capital as regulated in Financial Services Authority regulations regarding minimum capital requirements for Banks or similar regulations regulated by the banking financial institution supervisory authority where the bank is located.

Letter d
Recommendations from the banking financial institution supervisory authority must at least contain information regarding good reputation and never having committed disgraceful acts in the banking field. Letter e Clear enough. Letter f What is meant by "equity-like debt instruments" are debt instruments that can be converted into shares or that contain option rights to obtain shares. Letter g The determination of a specific time limit to own a Bank is determined by the Financial Services Authority. Letter h What is meant by "economic development" is economic development in sectors that are the Government of the Republic of Indonesia's priority and support Indonesia's economic growth.

Article 7
Letter a
Going public can be done through a public offering or without a public offering.
Letter b
What is meant by "equity-like debt instruments" are debt instruments that can be converted into shares or that contain option rights to obtain shares.
Approval to issue equity-like debt instruments is conducted after the financial institution legal entity has realized the purchase of shares exceeding 40% (forty percent) in accordance with the Financial Services Authority's approval.

Article 8
Clear enough.

Article 9
July 13, 2012 is the first date of implementation of regulations regarding the maximum share ownership limit.

Article 10
Paragraph (1)
Letter a
What is meant by "3 (three) consecutive assessment periods" is the assessment period for Bank Health Level and/or Governance assessment, including assessment periods for Bank Health Level and/or Governance assessment before the implementation of this Financial Services Authority Regulation. Example:
Bank A received Bank Health Level and/or Governance assessment ratings of 2 (two) assessment periods before the implementation of this Financial Services Authority Regulation, each being Rating 3 or Rating 4 for each period. Thus, if Bank A receives Bank Health Level and/or Governance assessment ratings of 1 (one) assessment period, each being Rating 3 or Rating 4 after this Financial Services Authority Regulation takes effect, then shareholders who own shares exceeding the maximum share ownership limit in Bank A are required to adjust in accordance with the maximum share ownership limit. Letter b The obligation to adjust with the maximum share ownership limit is only for shareholders who sell shares. Paragraph (2) Clear enough.

Article 11
Paragraph (1)
Letter a
Clear enough.
Letter b
What is meant by "Banks under special supervision" are Banks under special supervision as referred to in regulations regarding the determination of status and follow-up of bank supervision. Letter c What is meant by "Banks under intensive supervision" are Banks under intensive supervision as referred to in regulations regarding the determination of status and follow-up of bank supervision. Paragraph (2) Clear enough.

Article 12
Paragraph (1)
Clear enough.
Paragraph (2)
If the conditions in letter a or letter b occur for a period of more than 10 (ten) years after the merger or consolidation, then the shareholders of the relevant Bank adjust the maximum share ownership limit within a time limit of at most 5 (five) years after the last assessment period or share sale as regulated in Article 10. Letter a Example 1:
Bank A (Bank Health Level Rating 1 and Governance Rating 2) merges with Bank B (Bank Health Level Rating 1 and Governance Rating 1), becoming Bank A in October 2016. Subsequently, Bank A (the merger result) experienced a decline in Bank Health Level and/or Governance at the assessment positions in December 2024, June 2025, and December 2025 to Rating 3, Rating 4, or Rating 5. Thus, shareholders of Bank A who own shares above the maximum share ownership limit are required to adjust to the maximum share ownership limit at the latest by December 2035. Example 2:
Bank A (Bank Health Level Rating 1 and Governance Rating 2) merges with Bank B (Bank Health Level Rating 1 and Governance Rating 1), becoming Bank A in October 2016. Subsequently, Bank A (the merger result) experienced a decline in Bank Health Level and/or Governance at the assessment positions in December 2026, June 2027, and December 2027 to Rating 3, Rating 4, or Rating 5. Given that the decline in Bank Health Level and/or Governance occurred after passing 10 (ten) years since the merger, there is no extension of time. Thus, shareholders of Bank A who own shares above the maximum share ownership limit are required to adjust to the maximum share ownership limit within a time limit of at most 5 (five) years, at the latest by December 2032. Letter b The obligation to adjust with the maximum share ownership limit is only for shareholders who sell shares. Paragraph (3) What is meant by "Banks that receive Bank Health Level and/or Governance assessment ratings of Rating 3, Rating 4, or Rating 5" is one or several Banks or all Banks that conduct a merger or consolidation.

Article 13
Clear enough.

Article 14
Regional Government, namely Provincial Government, Regency Government, or City Government in the territory of the Republic of Indonesia.

Article 15
Clear enough.

Article 16
Paragraph (1)
Clear enough.
Paragraph (2)
The position where the obligation to adjust with the maximum share ownership limit of a Bank arises is calculated from the position of the last Bank Health Level and/or Governance assessment. Paragraph (3) Clear enough. Paragraph (4) Clear enough. Paragraph (5) Clear enough.

Article 17
Clear enough.

Article 18
Letter a
What is meant by "rights as a shareholder" are the rights to attend and vote in the General Meeting of Shareholders or the right to receive distributed dividends. Letter b Clear enough. Letter c Clear enough. Letter d What is meant by "provision of funds" is the provision of funds as referred to in regulations regarding the assessment of the quality of commercial bank assets. What is meant by "related parties" are related parties as referred to in regulations regarding the maximum limit for granting credit.

Article 19
Certain considerations include supporting financial system stability and/or encouraging the development of the national economy.

Article 20
Clear enough.

Article 21
Paragraph (1)
Letter a
Clear enough.
Letter b
Clear enough.
Letter c
Includes the meaning of freezing certain business activities, namely the prohibition of adding new products and/or activities.
Paragraph (2)
Clear enough.

Article 22
Clear enough.

Article 23
Clear enough.

Article 24
Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5981 ---