Financial Services Without Branches in the Framework of Inclusive Finance

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 1 /POJK.03/2022
CONCERNING
FINANCIAL SERVICES WITHOUT BRANCHES
IN THE FRAMEWORK OF INCLUSIVE FINANCE
BY THE GRACE OF THE ALMIGHTY GOD,
THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that to encourage national economic growth, it is necessary to continuously expand access to financial services for members of society who have not yet known, used, and/or received financial services in the form of banking services and/or other financial services; b. that to expand access to financial services, the Financial Services Authority, the banking industry, and other financial service industries are committed to supporting the realization of inclusive finance, which is also in line with the national inclusive finance strategy launched by the government, through the provision of financial services without branches so that society can obtain financial products that are easy to access, simple, easy to understand, and in accordance with societal needs;
c. that in line with the development of banking conditions and the development of information technology, and to improve efficiency and effectiveness in the provision of financial services without branches, it is necessary to refine the Financial Services Authority Regulation concerning Financial Services Without Branches in the Framework of Inclusive Finance;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning Financial Services Without Branches in the Framework of Inclusive Finance; Recalling:

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 concerning Amendment to Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 21 of 2008 concerning Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
3. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING FINANCIAL SERVICES WITHOUT BRANCHES IN THE FRAMEWORK OF INCLUSIVE FINANCE.

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

1. Bank is a business entity that gathers funds from the community in the form of deposits and channels them to the community in the form of loans or financing and/or other forms to improve the living standards of the majority of the people, consisting of commercial banks, rural banks, and sharia rural financing banks.
2. Commercial Bank is a Bank that conducts business activities on a conventional basis or conducts business activities based on sharia principles, which in its activities provides services in payment transactions, including branch offices of banks located outside the country and sharia business units.
3. Rural Bank, hereinafter abbreviated as BPR, is a Bank that conducts business activities on a conventional basis which in its activities does not provide services in payment transactions.
4. Sharia Rural Financing Bank, hereinafter abbreviated as BPRS, is a Bank that conducts business activities based on sharia principles which in its activities does not provide services in payment transactions.
5. Financial Services Without Branches in the Framework of Inclusive Finance, hereinafter referred to as Laku Pandai, is the activity of providing banking services and/or other financial services conducted not through a branch network, but through cooperation with agents supported by the use of information technology facilities, to support inclusive finance.
6. Laku Pandai Agent is a party that cooperates with the Bank organizing Laku Pandai and becomes the extension of the Bank in providing banking services to the community as agreed, to realize inclusive finance.
7. Basic Saving Account, hereinafter abbreviated as BSA, is a savings account with specific characteristics to support inclusive finance.
8. Inclusive Finance is a condition where society has access to various quality formal financial products and services in a timely, smooth, and safe manner with affordable costs in accordance with needs and abilities to improve societal welfare.

Article 2
(1) Every financial service institution is responsible for supporting the realization of Inclusive Finance.
(2) To support the realization of Inclusive Finance as referred to in paragraph (1), financial service institutions may become organizers of Laku Pandai. (3) Financial service institutions may only become organizers of Laku Pandai as referred to in paragraph (2) after obtaining permission from the Financial Services Authority. (4) Regulations regarding supporting documents for the application for permission to organize Laku Pandai as referred to in paragraph (3) are determined by the Financial Services Authority.

Article 3
Regulations regarding the organization of Laku Pandai as referred to in this Financial Services Authority Regulation apply to organizers of Laku Pandai in the form of Banks.

Article 4
(1) Banks are required to apply effective risk management in the organization of Laku Pandai.
(2) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in accordance with:
a. Financial Services Authority Regulation concerning the application of risk management for commercial banks; b. Financial Services Authority Regulation concerning the application of risk management for sharia commercial banks and sharia business units;
c. Financial Services Authority Regulation concerning the application of risk management for rural banks; or
d. Financial Services Authority Regulation concerning the application of risk management for sharia rural financing banks.

CHAPTER II
LAKU PANDAI PRODUCTS
Article 5
Bank products that can be provided by Banks through the organization of Laku Pandai consist of:
a. BSA; b. micro loans or financing; and/or
c. other Bank products based on permission from the Financial Services Authority.

Article 6
(1) BSA as referred to in Article 5 letter a has the following characteristics:
a. can only be owned by individual Indonesian citizens; b. in Rupiah currency;
c. without a minimum deposit limit;
d. without a minimum account balance limit; e. the maximum account balance limit at any time is set at a maximum of IDR 20,000,000.00 (twenty million Rupiah); f. the maximum limit for debit account transactions in the form of cash withdrawals, transfers, and/or outbound transfers in 1 (one) month cumulatively in each account is a maximum of IDR 5,000,000.00 (five million Rupiah); g. in the event that the customer is also a Bank debtor, the maximum limit for debit account transactions as referred to in letter f may be set by the Bank to be greater than IDR 5,000,000.00 (five million Rupiah) in 1 (one) month, but a maximum of IDR 60,000,000.00 (sixty million Rupiah) in 1 (one) year cumulatively; h. exempt from charges for:

1. monthly administration;
2. account opening;
3. cash deposit transactions;
4. inbound transfer transactions;
5. transfer transactions; and
6. account closure;
   i. charges for cash withdrawal transactions, outbound transfers, payments through savings accounts, and other charges are set by the Bank to be less than charges for similar transactions for regular savings accounts or IDR 0.00 (zero Rupiah);
   j. earn interest or profit sharing starting from an account balance of IDR 1.00 (one Rupiah); and k. not permitted for joint accounts with the status "and/or". (2) Banks may only open BSA accounts to prospective customers who do not have other savings accounts. (3) Restrictions as referred to in paragraph (1) letters e, f, g, and paragraph (2) may be exempted to support the implementation of government programs. (4) Banks may establish policies regarding exceeding the maximum limit for debit account transactions as referred to in paragraph (1) letters f and g under certain conditions for a limited time. (5) Banks may establish:
   a. the BSA product name; and b. the form of BSA ownership proof.
   (6) In the event that the BSA balance is nil and/or there are no transactions for 6 (six) consecutive months, the BSA status may be changed to a dormant account. (7) Banks may only issue automated teller machine (ATM) cards or debit cards to BSA customers based on customer requests. (8) Banks organizing Laku Pandai serve BSA at every branch network of the Bank. (9) Further regulations regarding the implementation of BSA are determined by the Financial Services Authority.

Article 7
(1) In the event that:
a. the nominal transaction amount in 1 (one) month exceeds the maximum limit for debit account transactions as referred to in Article 6 paragraph (1) letter f or letter g; and/or b. the balance exceeds the maximum account balance limit as referred to in Article 6 paragraph (1) letter e, however, if the customer still wishes to conduct transactions and/or increase the account balance, the Bank may change the savings status from BSA to regular savings. (2) The change of BSA savings status to regular savings as referred to in paragraph (1) is conducted by the Bank after:
a. the Bank requests confirmation and obtains approval from the BSA customer; or b. the Bank grants approval for the BSA customer's request to change the savings status from BSA to regular savings. (3) Confirmation of approval from the Bank and/or customer as referred to in paragraph (2) is administered by the Bank.

Article 8
(1) Micro loans or financing as referred to in Article 5 letter b are granted by Banks to BSA customers, with the following provisions:
a. the Bank has certainty regarding the feasibility and/or financial capability of the prospective debtor; and b. the loans or financing are intended to finance productive business activities and/or other activities in accordance with Bank policy. (2) Micro loans or financing as referred to in paragraph (1) have at least the following characteristics:
a. the loan or financing period is a maximum of 1 (one) year; and b. the maximum nominal limit for loans or financing is set at a maximum of IDR 20,000,000.00 (twenty million Rupiah). (3) Banks may establish the loan or financing period as referred to in paragraph (2) letter a to be more than 1 (one) year, provided it is in accordance with the debtor's business cycle. (4) Restrictions as referred to in paragraph (2) letter b may be exempted to support the implementation of government programs.

Article 9
(1) Applications for micro loans or financing as referred to in Article 5 letter b may be conducted through the Bank's branch network or Laku Pandai Agents. (2) Feasibility analysis and approval of micro loan or financing applications as referred to in paragraph (1) are conducted by the Bank. (3) Disbursement of micro loans or financing is conducted through:
a. the debtor's BSA account; and/or b. accounts belonging to the debtor's business needs providers, based on debtor approval.

CHAPTER III
REQUIREMENTS FOR ORGANIZING BANKS OF LAKU PANDAI
Article 10
Banks that will organize Laku Pandai must meet the following requirements:
a. have risk profile ratings, operational risk levels, and compliance risk levels with ratings 1, 2, or 3, based on the latest assessment period; and b. have supporting infrastructure to provide electronic banking services.

CHAPTER IV
COOPERATION BETWEEN ORGANIZING BANKS OF LAKU PANDAI AND LAKU PANDAI AGENTS First Section Requirements for Laku Pandai Agents
Article 11
(1) Banks organize Laku Pandai through cooperation with Laku Pandai Agents.
(2) Laku Pandai Agents as referred to in paragraph (1) may be:
a. individuals; or b. legal entities.

Article 12
(1) Individuals as referred to in Article 11 paragraph (2) letter a who can become Laku Pandai Agents must meet at least the following requirements:
a. are located in a clear location; b. have good capability, reputation, credibility, and integrity;
c. have main income sources derived from business activities and/or regular income from other activities for at least the last 2 (two) years; and
d. are not Laku Pandai Agents from other Banks with similar business activities outside the same banking business group.
(2) Banks may establish the time limit as referred to in paragraph (1) letter c to be less than 2 (two) years based on Bank policy in the event that the individual who will become a Laku Pandai Agent is a party specifically recruited to support the implementation of government programs.

Article 13
Legal entities as referred to in Article 11 paragraph (2) letter b that can become Laku Pandai Agents must meet at least the following requirements:
a. are Indonesian legal entities that:

1. are supervised by regulatory and supervisory authorities, and are permitted to conduct activities in the financial sector; or
2. are trading companies that have retail outlet networks;
   b. have good reputation, credibility, and performance;
   c. are able to perform liquidity management as required by the Bank;
   d. have human resources with technical capabilities to support the organization of Laku Pandai; and e. have adequate information technology to support the organization of Laku Pandai.

Second Section
Service Activities by Laku Pandai Agents
Article 14
(1) Laku Pandai Agents serve customers or prospective customers in accordance with the service scope based on the classification of Laku Pandai Agents.
(2) The service scope based on the classification of Laku Pandai Agents as referred to in paragraph (1) is established as follows:
a. Laku Pandai Agents with classification A provide services related to BSA transactions and may provide services:

1. transactions related to electronic money products and digital financial services in accordance with applicable laws and regulations; and/or
2. transactions related to micro insurance products in accordance with applicable laws and regulations;
   b. Laku Pandai Agents with classification B provide services as Laku Pandai Agents with classification A and may provide services:
3. transactions related to micro loans or financing; and/or
4. transactions related to savings other than BSA, except for account opening and closure; and
   c. Laku Pandai Agents with classification C provide services as Laku Pandai Agents with classification B and may provide services related to other financial products in accordance with applicable laws and regulations.
   (3) Classification of Laku Pandai Agents who are working with a Bank for the first time must start from classification A.
   (4) The service scope of Laku Pandai Agents is stated in the cooperation agreement.

Article 15
(1) Laku Pandai Agents as referred to in Article 14 paragraph (3) who have previously provided services related to other financial products outside the scope of classification A may continue to provide services. (2) Banks must, within a certain period, adjust the classification of Laku Pandai Agents as referred to in paragraph (1) to classification C by first improving the capabilities of the Laku Pandai Agents.

Article 16
(1) In the organization of Laku Pandai, Banks are required to have written policies regarding the mechanism for changing the classification of Laku Pandai Agents as referred to in Article 14 and Article 15. (2) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written warnings. (3) In the event that Banks have been subject to administrative sanctions in the form of written warnings as referred to in paragraph (2) and have not yet fulfilled the provisions as referred to in paragraph (1), Banks may be subject to administrative sanctions in the form of:
a. restrictions on certain Bank products related to the organization of Laku Pandai; b. freezing of certain Bank products;
c. prohibition on organizing new Bank products; and/or
d. downgrade of the Bank's health level.

Article 17
(1) In the event that Laku Pandai Agents provide transactions related to financial products issued by other institutions, namely:
a. electronic money products and digital financial services as referred to in Article 14 paragraph (2) letter a number 1; b. micro insurance products as referred to in Article 14 paragraph (2) letter a number 2; and/or
c. other financial products as referred to in Article 14 paragraph (2) letter c,
services are conducted based on cooperation agreements.
(2) Cooperation agreements as referred to in paragraph (1) are conducted between:
a. Laku Pandai Agents and other institutions; or b. Banks and other institutions.
(3) In the event that cooperation agreements are conducted between Banks and other institutions as referred to in paragraph (2) letter b, Banks must adjust the cooperation agreements with Laku Pandai Agents. (4) Cooperation agreements as referred to in paragraph (1) may only be conducted after Banks:
a. ensure that Laku Pandai Agents:

1. have fulfilled applicable laws and regulations related to financial products served by Laku Pandai Agents;
2. remain able to provide good services to customers from Banks that have cooperated with Laku Pandai Agents; and
3. have obtained permission from the Bank to serve transactions for financial products of other institutions; and
   b. ensure that other institutions:
4. remain responsible for financial products provided through Laku Pandai Agents; and
5. are permitted to provide financial products through agents or other parties.
   (5) Banks are prohibited from assuming or jointly assuming risks for financial products issued by other institutions as referred to in paragraph (1).

Article 18
(1) Banks are required to establish nominal limits for transactions related to savings other than BSA as referred to in Article 14 paragraph (2) letter b number 2 per day per customer, considering the conditions of Laku Pandai Agents. (2) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written warnings. (3) In the event that Banks have been subject to administrative sanctions in the form of written warnings as referred to in paragraph (2) and have not yet fulfilled the provisions as referred to in paragraph (1), Banks may be subject to administrative sanctions in the form of:
a. restrictions on certain Bank products related to the organization of Laku Pandai; b. freezing of certain Bank products;
c. prohibition on organizing new Bank products; and/or
d. downgrade of the Bank's health level.

Article 19
(1) Laku Pandai Agents may only provide services in the vicinity of the location of the Laku Pandai Agent, covering villages or equivalents and/or other surrounding areas. (2) Banks may establish other surrounding areas near villages or equivalents as referred to in paragraph (1) in accordance with reasonable travel distance, travel time, travel costs to the Laku Pandai Agent's location, and/or regional topological conditions.

Third Section
Procedures for Cooperation between Organizing Banks of Laku Pandai and Laku Pandai Agents
Article 20
(1) In conducting cooperation with Laku Pandai Agents, Banks are required to:
a. examine the fulfillment of requirements and conduct due diligence processes against Laku Pandai Agents; b. have written cooperation agreements with Laku Pandai Agents;
c. instruct Laku Pandai Agents to place and maintain a certain amount of deposits, the minimum amount of which is determined by the Bank based on certain considerations;
d. ensure and believe that the source of funds of Laku Pandai Agents in fulfilling obligations as referred to in letter c does not come from the proceeds of money laundering and/or terrorism financing; e. ensure that Laku Pandai Agents have special units or appoint employees responsible for Laku Pandai activities, in the event that Laku Pandai Agents are legal entities; f. be responsible for the acts and actions of Laku Pandai Agents that fall within the scope of services of Laku Pandai Agents related to Bank products stated in the cooperation agreements; g. monitor and supervise the activities of Laku Pandai Agents, both periodically and incidentally; h. provide guidance and/or impose sanctions for violations committed by Laku Pandai Agents;
i. conduct education and training for Laku Pandai Agents regularly and optimally;
j. conduct education and literacy for the community around the location of Laku Pandai Agents regarding Laku Pandai and Bank products offered; and k. ensure the responsibility for the continuity of the organization of Laku Pandai in the event of certain conditions that cause Laku Pandai Agents to be unable to operate. (2) Cooperation agreements as referred to in paragraph (1) letter b contain at least:
a. rights and obligations of Banks and Laku Pandai Agents; b. the scope of services that can be provided by Laku Pandai Agents;
c. the designation of the operational area of Laku Pandai Agents;
d. the designation of Laku Pandai Agent classifications; e. the duration of cooperation and its renewal mechanism; f. the mechanism and cooperation relationship between Banks and Laku Pandai Agents; g. conditions and procedures for the transfer of Laku Pandai Agent locations; h. conditions and procedures for changes to cooperation agreements;
i. the designation of sanctions and the mechanism for imposing sanctions;
j. conditions and procedures for the termination of cooperation agreements; k. the mechanism for accountability in the event of consumer losses; and
l. procedures for dispute resolution.
(3) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written warnings.
(4) In the event that Banks have been subject to administrative sanctions in the form of written warnings as referred to in paragraph (3) and have not yet fulfilled the provisions as referred to in paragraph (1), Banks may be subject to administrative sanctions in the form of:
a. restrictions on certain Bank products related to the organization of Laku Pandai; b. freezing of certain Bank products;
c. prohibition on organizing new Bank products; and/or
d. downgrade of the Bank's health level.
(5) Further regulations regarding the procedures and mechanisms of cooperation between Banks and Laku Pandai Agents, as well as the technical organization of Laku Pandai by Laku Pandai Agents, are determined by the Financial Services Authority.

Article 21
(1) Banks are required to ensure that individuals who will cooperate with Banks organizing Laku Pandai do not become Laku Pandai Agents from other Banks with similar business activities outside the same banking business group. (2) Banks that do not fulfill the obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written warnings. (3) In the event that Banks have been subject to administrative sanctions in the form of written warnings as referred to in paragraph (2) and have not yet fulfilled the provisions as referred to in paragraph (1), Banks may be subject to administrative sanctions in the form of:
a. restrictions on certain Bank products related to the organization of Laku Pandai; b. freezing of certain Bank products;
c. prohibition on organizing new Bank products; and/or
d. downgrade of the Bank's health level.

Article 22
(1) Banks may cooperate with legal entity Laku Pandai Agents who have become Laku Pandai Agents from other Banks, provided that the Bank's analysis results show that the Laku Pandai Agents can still provide services well.

(2) Legal entity Laku Pandai Agents cooperating with more than 1 (one) Bank may only provide products from 1 (one) conventional bank and/or 1 (one) Sharia bank at each office or retail outlet owned. (3) The restriction referred to in paragraph (2) may be exempted for legal entity Laku Pandai Agents cooperating with more than 1 (one) Bank within the same banking business group.

Fourth Section
Position of Laku Pandai Agents

Article 23
(1) Cooperation between Banks and Laku Pandai Agents located in the capital city, provincial capital, regency/city capital, and/or city, must be accompanied by cooperation with Laku Pandai Agents located outside the capital city, provincial capital, regency/city capital, and/or city, with still limited access to financial services. (2) Provisions as referred to in paragraph (1) are exempted for Banks cooperating with legal entity Laku Pandai Agents serving Laku Pandai products at offices or retail outlets located outside the capital city, provincial capital, regency/city capital, and/or city, with still limited access to financial services.

Article 24
(1) Banks may only cooperate with Laku Pandai Agents located in the same city or regency as the location of the Bank's office network.
(2) In the event that there is no Bank office network in the city or regency where the prospective Laku Pandai Agent is located, the Bank may still cooperate with the prospective Laku Pandai Agent provided that:
a. adequate financial services are not available at the location of the prospective Laku Pandai Agent; and b. there is a Bank office network in another city or regency different from the location of the prospective Laku Pandai Agent and the Bank can conduct monitoring and supervision.

Fifth Section
Electronic Devices in Supporting Laku Pandai Agent Services

Article 25
(1) Banks determine the use of electronic devices in supporting Laku Pandai Agent services, consisting of:
a. hardware; and b. software.
(2) The provision of electronic devices as referred to in paragraph (1) is implemented in accordance with applicable legislation.

Article 26
(1) Banks conducting Laku Pandai must record transactions conducted by customers simultaneously.
(2) Transaction recording as referred to in paragraph (1) is accompanied by the submission of transaction receipts to Bank customers.
(3) In certain conditions, transaction recording as referred to in paragraph (1) may be conducted at times that are not simultaneous according to Bank policy. (4) Certain conditions as referred to in paragraph (3) are determined in Bank policy. (5) Policy as referred to in paragraph (4) must be followed by adjustments to the Bank's standard operating procedures ensuring that risk mitigation is carried out adequately.

CHAPTER V
IMPLEMENTATION OF CUSTOMER DUE DILIGENCE

Article 27
(1) Regarding prospective BSA customers, Banks with the assistance of Laku Pandai Agents apply customer due diligence procedures in accordance with Financial Services Authority Regulations regarding the implementation of anti-money laundering programs and counter-terrorism financing prevention in the financial services sector. (2) In the event that BSA customers will become Bank debtors, the Bank completes BSA customer documents for the purpose of preparing debtor reports in accordance with Financial Services Authority Regulations regarding reporting and requests for debtor information through the financial information service system.

Article 28
(1) BSA customers who have applied for account opening through Laku Pandai Agents may only conduct cash deposit transactions during the process until verification has been completed by the Bank. (2) In the event that the Bank rejects the account opening application based on the results of the verification process as referred to in paragraph (1), the Bank immediately returns the BSA customer's cash deposit. (3) Banks are required to have return procedures for deposits as referred to in paragraph (2). (4) Banks that do not fulfill obligations as referred to in paragraph (3) are subject to administrative sanctions in the form of written reprimands. (5) In the event that a Bank has been subjected to administrative sanctions in the form of written reprimands as referred to in paragraph (4) and has not yet fulfilled the provisions as referred to in paragraph (3), the Bank may be subjected to administrative sanctions in the form of:
a. restriction of certain Bank products related to the implementation of Laku Pandai; b. freezing of certain Bank products;
c. prohibition on implementing new Bank products; and/or
d. reduction of the Bank's health level.

Article 29
General Banks may conduct the verification process for prospective BSA customers using electronic devices in accordance with Financial Services Authority Regulations regarding the implementation of digital banking services by general banks.

Article 30
To obtain permission for the implementation of digital banking services to conduct verification using electronic devices in supporting the implementation of Laku Pandai, General Banks are exempted from the requirement to have a risk profile rating of rank 1 (one) or rank 2 (two) based on the assessment of the Bank's health level in the last assessment period in accordance with Financial Services Authority Regulations regarding the implementation of digital banking services by general banks.

CHAPTER VI
USE OF THIRD PARTIES

Article 31
(1) In the implementation of Laku Pandai, Banks may use third parties for the execution of specific tasks.
(2) In using third parties, Banks ensure that the third party has competence appropriate to the work being performed.
(3) Banks remain responsible for work executed by third parties as referred to in paragraph (1).
(4) Mechanisms and procedures for the use of third parties as referred to in paragraph (1) are implemented in accordance with applicable legislation.

CHAPTER VII
IMPLEMENTATION OF RISK MANAGEMENT IN THE USE OF INFORMATION TECHNOLOGY

Article 32
(1) Banks are required to apply principles of data security control for customers and transactions on electronic systems used by Banks for the implementation of Laku Pandai. (2) Principles of data security control for customers and transactions on electronic systems as referred to in paragraph (1) include at least:
a. confidentiality; b. integrity;
c. availability; and
d. authenticity.
(3) Banks are required to apply at least 2 (two) factors of authenticity for transaction verification in the implementation of Laku Pandai.
(4) Banks that do not fulfill obligations as referred to in paragraph (1) and/or paragraph (3) are subject to administrative sanctions in the form of written reprimands. (5) In the event that a Bank has been subjected to administrative sanctions in the form of written reprimands as referred to in paragraph (4) and has not yet fulfilled the provisions as referred to in paragraph (1) and/or paragraph (3), the Bank may be subjected to administrative sanctions in the form of:
a. freezing of certain Bank products; b. prohibition on implementing new Bank products; and/or
c. reduction of the Bank's health level in the form of a reduction in the governance factor rating in the Bank's health level assessment.

CHAPTER VIII
CONSUMER PROTECTION

Article 33
(1) Banks are required to apply consumer protection principles in the implementation of Laku Pandai in accordance with applicable legislation regarding consumer protection in the financial services sector. (2) Mechanisms and procedures for the implementation of consumer protection principles as referred to in paragraph (1) are implemented in accordance with applicable legislation regarding consumer protection in the financial services sector. (3) Banks that do not fulfill obligations as referred to in paragraph (1) are subject to administrative sanctions in the form of written reprimands. (4) In the event that a Bank has been subjected to administrative sanctions in the form of written reprimands as referred to in paragraph (3) and has not yet fulfilled the provisions as referred to in paragraph (1), the Bank is subjected to administrative sanctions in the form of:
a. restriction of certain Bank products related to the implementation of Laku Pandai; b. freezing of certain Bank products;
c. prohibition on implementing new Bank products; and/or
d. reduction of the Bank's health level.

CHAPTER IX
REPORTING

Article 34
(1) Banks are required to submit reports on the realization of Laku Pandai implementation at most 10 (ten) working days after the implementation of Laku Pandai. (2) Banks that commit violations related to the submission of realization reports as referred to in paragraph (1) are subject to administrative sanctions. (3) Submission of realization reports as referred to in paragraph (1) and imposition of sanctions for violations related to the submission of realization reports as referred to in paragraph (2) are implemented in accordance with:
a. Financial Services Authority Regulations regarding the implementation of general bank products; or b. Financial Services Authority Regulations regarding the implementation of rural credit bank products and Sharia people's credit banks.

Article 35
(1) Banks are required to submit quarterly reports on the development of Laku Pandai implementation for positions in March, June, September, and December, at the latest on the 15th (fifteenth) day of the following month after the end of the reporting month. (2) If the deadline for report submission as referred to in paragraph (1) falls on a Saturday, Sunday, or other holiday, the report is submitted on the next working day.

Article 36
(1) For General Banks, the development report of Laku Pandai implementation as referred to in Article 35 paragraph (1) is submitted online through the Financial Services Authority reporting system. (2) General Banks that commit violations related to the submission of development reports of Laku Pandai implementation as referred to in paragraph (1) are subject to administrative sanctions. (3) Procedures for online submission of reports as referred to in paragraph (1) and imposition of administrative sanctions as referred to in paragraph (2) are implemented in accordance with Financial Services Authority Regulations regarding the reporting of general banks through the Financial Services Authority reporting system. (4) The format of the development report of Laku Pandai implementation as referred to in Article 35 paragraph (1) is determined by the Financial Services Authority.

Article 37
(1) For Rural Credit Banks (BPR) and Sharia People's Credit Banks (BPRS), the development report of Laku Pandai implementation as referred to in Article 35 paragraph (1) is submitted online through the Financial Services Authority reporting system. (2) In the event that online submission of the development report of Laku Pandai implementation as referred to in paragraph (1) cannot yet be done, BPRs and BPRSs submit the development report of Laku Pandai implementation in printed copy and electronic copy form offline to the Financial Services Authority. (3) Reports as referred to in paragraph (2) are submitted to:
a. Regional Office of the Financial Services Authority, for BPRs and BPRSs headquartered in the working area of the Regional Office of the Financial Services Authority; or b. Office of the Financial Services Authority, for BPRs and BPRSs headquartered in the working area of the Office of the Financial Services Authority. (4) BPRs and BPRSs that are late in submitting reports as referred to in Article 35 paragraph (1) are subject to administrative sanctions in the form of fines amounting to:
a. Rp100,000.00 (one hundred thousand rupiah) per working day of delay and at most Rp3,000,000.00 (three million rupiah) for BPRs and BPRSs having core capital less than Rp50,000,000,000.00 (fifty billion rupiah); or b. Rp250,000.00 (two hundred fifty thousand rupiah) per working day of delay and at most Rp7,500,000.00 (seven million five hundred thousand rupiah) for BPRs and BPRSs having core capital of at least Rp50,000,000,000.00 (fifty billion rupiah). (5) The format of the development report of Laku Pandai implementation as referred to in Article 35 paragraph (1) is determined by the Financial Services Authority.

CHAPTER X
OTHER PROVISIONS

Article 38
(1) If necessary, the Financial Services Authority may request information, explanations, and/or data from Banks, including conducting inspections of Laku Pandai Agents. (2) The Financial Services Authority, based on certain considerations, may order Banks to terminate cooperation with Laku Pandai Agents.

CHAPTER XI
TRANSITIONAL PROVISIONS

Article 39
Banks that already have policies and procedures in the implementation of Laku Pandai must adjust to the provisions in this Financial Services Authority Regulation at most 3 (three) months since the implementation of this Financial Services Authority Regulation.

Article 40
Banks that have already disbursed micro credit or financing through Laku Pandai must complete BSA customer documents for the purpose of preparing debtor reports in accordance with the provisions in this Financial Services Authority Regulation.

Article 41
(1) Regarding the classification of Laku Pandai Agents established prior to the implementation of this Financial Services Authority Regulation, Banks adjust the classification of Laku Pandai Agents in accordance with the provisions in this Financial Services Authority Regulation. (2) Adjustment of Laku Pandai Agent classification as referred to in paragraph (1) is determined:
a. Laku Pandai Agents previously established as Classification A remain in Classification A; b. Laku Pandai Agents previously established as Classification B remain in Classification B;
c. Laku Pandai Agents previously established as Classification C and Classification D are adjusted to Classification B; and
d. Laku Pandai Agents previously established as Classification E, Classification F, and Classification G are adjusted to Classification C.

Article 42
Reporting submitted through the Laku Pandai reporting application shifts to the Financial Services Authority reporting system starting from the reporting position period for December 2021.

CHAPTER XII
CLOSING PROVISIONS

Article 43
At the time this Financial Services Authority Regulation comes into force, the implementation provisions of Financial Services Authority Regulation Number 19/POJK.03/2014 concerning Branchless Financial Services in the Context of Inclusive Finance (State Gazette of the Republic of Indonesia Year 2014 Number 350, Supplement to the State Gazette of the Republic of Indonesia Number 5628) are declared to remain in force insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 44
At the time this Financial Services Authority Regulation comes into force, Financial Services Authority Regulation Number 19/POJK.03/2014 concerning Branchless Financial Services in the Context of Inclusive Finance (State Gazette of the Republic of Indonesia Year 2014 Number 350, Supplement to the State Gazette of the Republic of Indonesia Number 5628) is repealed and declared invalid.

Article 45
This Financial Services Authority Regulation comes into force on the date it is promulgated.

A true copy of the original
Director of Law 1
Legal Department signed
Mufli Asmawidjaja

In order that everyone knows it, orders the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia. Determined in Jakarta on January 5, 2022

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

signed
WIMBOH SANTOSO

Promulgated in Jakarta on January 6, 2022
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2022 NUMBER 10

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 1 /POJK.03/2022
CONCERNING
BRANCHLESS FINANCIAL SERVICES
IN THE CONTEXT OF INCLUSIVE FINANCE

I. GENERAL
The role of the banking industry and other financial services industries is very important in supporting activities and economic growth in Indonesia. Therefore, each industry is required to increase and expand its financial service access, so as to provide greater benefits to the Indonesian people, especially those who have not yet known, used, and/or obtained banking services and other financial services. Causes of limited availability of banking and financial service access in Indonesia include:
a. many areas in Indonesia are not served by the office networks of the banking and financial services industries due to remote locations; b. sufficiently high costs and/or sufficiently long times for people in remote areas to reach banking and financial service locations;
c. complexity of processes to obtain banking and other financial services;
d. low knowledge and understanding regarding products and/or services of the banking and financial services industries; and e. still low income of some members of society so that they are unable to save. The expansion of financial service access is certainly very necessary for people living in remote areas as well as those with low incomes. With the increasing inclusiveness of these financial services, it is hoped that it can drive economic growth so that welfare becomes more evenly distributed throughout Indonesia, and ultimately can play a role in efforts to eradicate poverty in Indonesia. The role of the financial services industry, particularly banking, in driving the economy includes among others through intermediary functions by receiving funds from the public and distributing productive credit or financing and/or other credit or financing to the public comprehensively. To encourage increased financial inclusion in Indonesia, the Indonesian Government issued Presidential Regulation Number 114 of 2020 concerning the National Strategy for Inclusive Finance in 2020. The national inclusive finance strategy has 5 (five) pillars, namely:
a. financial education; b. community property rights;
c. products, intermediation, and distribution channels;
d. financial services in the government sector; and e. consumer protection.
These five pillars aim to achieve the ultimate goal of the national inclusive finance strategy, namely:
a. creating an inclusive financial system to support a deep and stable financial system; b. supporting economic growth;
c. accelerating poverty alleviation; and
d. reducing inequalities between individuals and regions to realize the welfare of the Indonesian people.
In achieving the ultimate goals of the national inclusive finance strategy, the government certainly needs support from various parties. In this regard, the Financial Services Authority together with financial service institutions actively participates in the pillars of financial education, products, intermediation, and distribution channels, government sector financial services, and consumer protection. One program supporting the pillar of the national inclusive finance strategy related to products, intermediation, and distribution channels is the provision of branchless financial services, which can be carried out among others through Laku Pandai. Through Laku Pandai, financial service institutions play an important role in supporting the national inclusive finance strategy in realizing inclusive finance. Laku Pandai utilizes information technology facilities such as mobile phones, electronic data capture, and/or internet banking that support financial services by Banks through Laku Pandai Agents. With the utilization of these information technology facilities, it is hoped that it can reach people in remote areas and reduce financial transaction costs so that they can become more affordable for the public. Furthermore, Laku Pandai provides financial products tailored to the needs of people in remote areas and/or low-income groups, with simple characteristics so that they are easier to understand, accompanied by ease in the transaction process and simplification of document fulfillment requirements from prospective customers. With increased knowledge and understanding regarding financial services, it is hoped that it can help increase public awareness regarding the importance of financial management. Better financial management can increase income and welfare. In the event that this awareness has become increasingly widespread and strong in society, it will support the realization of Inclusive Finance in Indonesia. The implementation of Laku Pandai, which was effectively implemented since early 2015, has increased, facilitated, and expanded access to the use of financial services for the public, especially those who have not yet known, used, and/or obtained banking services and other financial services. In its development, Laku Pandai is also utilized as a channel for the disbursement of government programs, among others the disbursement of micro-business credit and the disbursement of social assistance in non-cash form. Furthermore, to support the sustainable expansion of financial service access, there is a need to increase the efficiency and effectiveness of Laku Pandai implementation by considering the development of banking conditions and the development of information technology. Efforts that can be made to increase the efficiency and effectiveness of Laku Pandai implementation include among others:
a. expansion of business models and cooperation related to agency; b. adjustment of the scope of financial services including in supporting the implementation of government programs;
c. utilization of information technology in account opening;
d. use of third parties in supporting the implementation of Laku Pandai; and e. improvement of online reporting on the development of Laku Pandai implementation. In this regard and to mitigate risks that may arise, there is a need to refine regulations regarding branchless financial services in the context of inclusive finance or Laku Pandai, in the Financial Services Authority Regulation.

II. ARTICLE BY ARTICLE
Article 1
It is clear enough.

Article 2
Paragraph (1)
What is meant by "financial service institution" is an institution that carries out activities in the banking, capital market, insurance, pension fund, financing institution, and other financial service sectors in accordance with the Law regarding the Financial Services Authority. Paragraph (2) It is clear enough. Paragraph (3) For General Banks, the licensing mechanism is implemented in accordance with Financial Services Authority Regulations regarding the implementation of general bank products. For BPRs and BPRSs, the licensing mechanism is implemented in accordance with Financial Services Authority Regulations regarding the implementation of rural credit bank products and Sharia people's credit banks. Paragraph (4) It is clear enough.

Article 3
It is clear enough.

Article 4
Paragraph (1)
The application of effective risk management is implemented in accordance with:
a. Financial Services Authority Regulations regarding the application of risk management for general banks and its implementation provisions; b. Financial Services Authority Regulations regarding the application of risk management for general Sharia banks and Sharia business units;
c. Financial Services Authority Regulations regarding the application of risk management for rural credit banks and its implementation provisions; or
d. Financial Services Authority Regulations regarding the application of risk management for Sharia people's credit banks and its implementation provisions. Paragraph (2) It is clear enough.

Article 5
Letter a
Bank Products include BSAs including BSAs based on Sharia principles with mudarabah and/or wadiah contracts.
Letter b
It is clear enough.
Letter c
It is clear enough.

Article 6
Paragraph (1)
Letter a
It is clear enough.
Letter b
It is clear enough.
Letter c
Deposits include deposits at the time of account opening and/or subsequent cash deposits.
Letter d
The elimination of the minimum balance limit for accounts applies at all times.
Letter e
Banks may set the maximum account balance limit at any time to less than Rp20,000,000.00 (twenty million rupiah), adjusted among other things to the characteristics of economic activities and the community's capacity, at the location where Laku Pandai is implemented. Letter f What is meant by "book transfer" is a transaction transferring funds from one account to another within the same Bank. What is meant by "outward transfer" is a transaction transferring funds from a customer's account at a Bank to a customer's account at another Bank. Banks may set the maximum limit for debit transactions of accounts in the form of cash withdrawals, book transfers, and/or outward transfers cumulatively over 1 (one) month for each account to less than Rp5,000,000.00 (five million rupiah), adjusted among other things to the characteristics of economic activities and the community's capacity, at the location where Laku Pandai is implemented. Letter g The relaxation of the maximum debit transaction limit for accounts is carried out to allow Banks to use BSA in distributing credit or micro-financing to the owners of such savings accounts.

Letter h
Number 1
It is clear enough.
Number 2
It is clear enough.
Number 3
It is clear enough.
Number 4
What is meant by "inward transfer" is a transaction transferring funds to a customer's account at a Bank from a customer's account at another Bank.
Number 5
It is clear enough.
Number 6
It is clear enough.
Letter i
Examples of payment transactions through savings accounts include payments for electricity, water, telephone, state revenue, and regional revenue.
Examples of other costs include replacement of damaged or lost cards.
Letter j
BSA interest may be given to customers in tiers, starting from an account balance of Rp1.00 (one rupiah) with the lowest interest rate being at least equal to the lowest interest rate on regular savings at conventional banks. Profit sharing for BSA at Islamic banks based on the mudarabah contract is given based on the profit-sharing ratio, which is a mutual agreement between the Islamic bank and the customer and is stipulated in the account opening contract. BSA bonuses at Islamic banks based on the wadiah contract are an internal policy of the Islamic bank that is voluntary (not agreed upon in advance).

Letter k
Joint accounts with the "and" status are permitted in cases where the prospective customer is an individual who has not yet met the requirements to have identity documents, such as an identity card or driver's license, for example, students. The prospective customer in question may open a BSA by submitting a substitute identity document, such as a student ID card, accompanied by the identity document of the prospective customer's parent or guardian, and a letter of consent from the prospective customer's parent or guardian. In the event that the prospective customer in question is accompanied by a guardian, the guardian must have met the provisions of applicable laws and regulations. Joint accounts with the "and" status as mentioned above are considered as separate accounts and are not counted towards the maximum ownership limit of BSA for the parents or guardians of the prospective customer in question. Paragraph (2) Other savings are savings held at the same Bank. Paragraph (3) Examples of government programs include the distribution of micro-enterprise credit and the distribution of social assistance in non-cash form. For example, if a customer already has a savings account at a Bank, but due to the distribution of non-cash social assistance from the government, it is necessary to open a BSA for the customer, causing the customer to have 2 (two) accounts at the same Bank. This is permitted as long as the purpose is to facilitate the distribution of the aforementioned non-cash social assistance. Paragraph (4) Examples of specific conditions include floods, fires, earthquakes, accidents, and bereavement. Paragraph (5) It is clear enough.

Paragraph (6)
Transactions do not include the crediting of BSA because interest or profit sharing from the BSA itself.
Follow-up procedures for dormant accounts are established by the Bank.
Dormant accounts are known as dormant accounts.
Paragraph (7)
The provision of automated teller machine (ATM) cards or debit cards to BSA customers is intended to enhance Bank services according to customer needs.
Automated teller machine cards are known as automated teller machine (ATM) cards.
Paragraph (8)
It is clear enough.
Paragraph (9)
It is clear enough.
Article 7
It is clear enough.
Article 8
Paragraph (1)
Letter a
Information regarding the feasibility and/or financial capacity of prospective debtors can be obtained from information sources outside BSA account activities. Letter b Credit or financing intended to finance productive business activities includes working capital credit and capital goods investment credit. Credit or financing intended to finance other activities includes costs for childbirth, medical treatment, funeral expenses, and education. Paragraph (2) It is clear enough.

Paragraph (3)
The credit or financing period of more than 1 (one) year is determined by considering among other things an analysis of the business development plan submitted by the prospective debtor, the conditions/characteristics of the prospective debtor's business, and information from mentors, customer groups, departments, or related agencies. Examples of businesses with cycles of more than 1 (one) year include cattle farming and coffee planting. Paragraph (4) It is clear enough.
Article 9
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
Letter a
It is clear enough.
Letter b
Examples of business input providers include providers of fertilizer and/or seeds required by the debtor for rice planting activities.
Article 10
Letter a
The assessment of risk profile ratings, operational risk levels, and compliance risk levels is carried out among other things in accordance with:

1. Financial Services Authority Regulations regarding the assessment of the health level of commercial banks and its implementing provisions;

2. Financial Services Authority Regulations regarding the assessment of the health level of Islamic commercial banks and Sharia business units and its implementing provisions;

3. Financial Services Authority Regulations regarding the application of risk management for rural credit banks and its implementing provisions; and

4. Financial Services Authority Regulations regarding the application of risk management for Islamic rural credit banks and its implementing provisions.
   The risk profile rating, operational risk level, and compliance risk level used are results of assessments by the Financial Services Authority.
   Until the risk profile rating assessment applies to BPRS, the risk profile rating, operational risk level, and compliance risk level use assessments of management factors rated A or B in the BPRS health level assessment. Letter b What is meant by "electronic banking services" is services to obtain information, communicate, and conduct banking transactions through electronic media. Examples of electronic banking services include short message services banking, mobile banking, and internet banking.
   Article 11
   Paragraph (1)
   It is clear enough.
   Paragraph (2)
   Letter a
   Individual Laku Pandai agents include leaders/people within:

5. non-legal entity companies such as limited partnerships or firms;

6. informal organizations such as farmer groups;
   and

7. schools including Islamic boarding schools.
   Limited partnerships are known as CVs.
   Letter b
   It is clear enough.

Article 12
Paragraph (1)
Letter a
What is meant by "clear location" is the location of the Laku Pandai Agent according to relevant information or data obtained from accountable sources, thereby facilitating the Bank in conducting monitoring and supervision. Letter b It is clear enough. Letter c Examples of other activities include teachers and pensioners with fixed incomes. Letter d Type of business activity is either conventional business activity or business activity based on Sharia principles. What is meant by "bank business group" is a bank business group in accordance with Financial Services Authority Regulations regarding the consolidation of commercial banks. Example:
Bank A and Bank B are conventional banks located in the same bank business group, Bank C is a conventional bank, and Bank D is an Islamic bank.
A Laku Pandai Agent from Bank A can become a Laku Pandai Agent for Bank B and/or Bank D, but cannot become a Laku Pandai Agent for Bank C.
Paragraph (2)
Examples of government programs include the Electronic Shared Grocery Store Program for Joint Business Groups of the Hopeful Family Program (e-Warong KUBE PKH).

Article 13
Letter a
Number 1
Examples of legal entity Laku Pandai agents include postal service providers, cooperatives, and pawnshop companies.
Number 2
It is clear enough.
Letter b
What is meant by "performance" is financial performance and non-financial performance.
Letter c
It is clear enough.
Letter d
It is clear enough.
Letter e
It is clear enough.
Article 14
Paragraph (1)
It is clear enough.
Paragraph (2)
Letter a
Transactions related to BSA include account opening and closing.
Number 1
It is clear enough.
Number 2
Micro insurance products are micro insurance products in accordance with Financial Services Authority Regulations regarding micro insurance products and micro insurance marketing channels. Letter b Number 1 What is meant by "micro credit or financing" is micro credit or financing provided by the Bank.

Transactions involving the receipt of application documents, disbursement of funds, collection, and/or receipt of payments for credit or financing.
Number 2
What is meant by "account opening and closing" is manual account opening and closing.
Letter c
What is meant by "other financial products" includes among other things:
a. Bank products other than savings and micro credit or financing; and b. financial products and/or services from institutions other than Banks.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Article 15
Paragraph (1)
Example:
Mr. Budi is an agent for another financial product, namely Product L. Bank XYZ then recruits Mr. Budi as a Laku Pandai Agent, so Mr. Budi is designated as a Classification A Laku Pandai Agent. Although transactions related to Product L are outside the scope of services for Classification A, Mr. Budi can still serve transactions related to Product L, considering that the service was already carried out by Mr. Budi before becoming a Laku Pandai Agent. Paragraph (2) The determination of the time frame and mechanism for adjusting the classification of Laku Pandai Agents, including regarding the enhancement of Laku Pandai Agent capabilities, is contained in Bank policy.

Article 16
Paragraph (1)
Based on Bank evaluation, changes in the classification of Laku Pandai Agents can be changes from a lower classification to a higher classification or vice versa. Changes in the classification of Laku Pandai Agents can be made without sequence. For example, a Laku Pandai Agent with Classification A can have its classification increased to Classification C without going through Classification B first. Examples of criteria that can be considered by the Bank in changing the classification of Laku Pandai Agents based on Bank policy include among other things:

1. the level of the Laku Pandai Agent's ability to understand financial products;
2. the level of the Laku Pandai Agent's financial capacity to provide a certain amount of deposits placed at the Bank for service activities by the Laku Pandai Agent;
3. the performance of the Laku Pandai Agent in serving Bank customers and prospective customers;
4. the level of service needs in the area where the Laku Pandai Agent is located;
5. the need for distribution of government programs; and
6. the portfolio of services related to other financial products that have been provided by the Laku Pandai Agent.
   Paragraph (2)
   It is clear enough.
   Paragraph (3)
   It is clear enough.
   Article 17
   Paragraph (1)
   It is clear enough.
   Paragraph (2)
   Cooperation agreements must still comply with laws and regulations outside the banking sector, among other things, Financial Services Authority Regulations regarding micro insurance products and micro insurance marketing channels.

Paragraph (3)
Adjustment of cooperation agreements between the Bank and the Laku Pandai Agent is necessary as a legal basis for the Laku Pandai Agent to market financial products of other institutions. Example:
Bank XYZ has 2 (two) Laku Pandai Agents, namely Mr. Budi and Mrs. Wati, with the following conditions:

1. Mr. Budi provides transaction services for financial products from PT B, based on a cooperation agreement between Mr. Budi and PT B.

2. Mrs. Wati provides transaction services for financial products from PT B based on a cooperation agreement between Bank XYZ and PT B.
   Adjustment of the cooperation agreement is only carried out by Bank XYZ with Mrs. Wati.
   Paragraph (4)
   Letter a
   Number 1
   What is meant by "laws and regulations" is provisions that specifically regulate financial products that can be provided through agents or other parties. Compliance with provisions includes among other things:

3. agent criteria; and

4. product characteristics.
   Number 2
   It is clear enough.
   Number 3
   It is clear enough.
   Letter b
   Number 1
   What is meant by "financial product" is a financial product issued by another institution.
   Responsibilities include:

5. risks associated with the financial product;

6. customer complaint handling services;

7. education and training related to financial products for Laku Pandai Agents;

8. acts and actions of Laku Pandai Agents in marketing financial products; and

9. other matters necessary related to the financial product.
   Number 2
   The permission to provide financial products through agents or other parties is allowed by considering among other things:

10. the availability of regulations for the aforementioned other institutions, which regulate marketing of products through agents or other parties;

11. permission from the authority supervising the aforementioned other institutions; and

12. no violation of laws and regulations.
    Paragraph (5)
    It is clear enough.
    Article 18
    Paragraph (1)
    Conditions of the Laku Pandai Agent include among other things the amount of deposits placed by the Laku Pandai Agent at the Bank, the financial capacity and performance of the Laku Pandai Agent, and the economic conditions of the community around the location of the Laku Pandai Agent. Paragraph (2) It is clear enough. Paragraph (3) It is clear enough.
    Article 19
    Paragraph (1)
    What is meant by "location of the Laku Pandai Agent" is the residence and/or business location of the Laku Pandai Agent.
    Paragraph (2)
    It is clear enough.

Article 20
Paragraph (1)
Letter a
Due diligence is known as due diligence.
Letter b
It is clear enough.
Letter c
Specific considerations include among other things:

1. the financial capacity of the Laku Pandai Agent;

2. the estimated transaction activity according to the characteristics of the community around the location of the Laku Pandai Agent; and

3. the classification of the Laku Pandai Agent.
   Letter d
   It is clear enough.
   Letter e
   It is clear enough.
   Letter f
   It is clear enough.
   Letter g
   The mechanism and frequency of monitoring and supervision are established by the Bank by considering among other things security factors, confidence in the credibility and integrity of the Laku Pandai Agent, results of transaction monitoring analysis of the Laku Pandai Agent, and the development of business activities and the amount of deposits of the Laku Pandai Agent. Included in supervision activities is conducting checks at the location of the Laku Pandai Agent, to ensure the suitability of services provided by the Laku Pandai Agent with its classification and scope of services in the cooperation agreement, as well as the adequacy of information that must be available to customers at the location of the Laku Pandai Agent. Letter h Examples of violations include among other things:

4. not complying with the cooperation agreement, for example, providing services that are not included in the cooperation agreement; and

5. committing deviations, for example, not being transparent in disclosing transaction costs.
   Letter i
   Education and training include among other things:

6. benefits, costs, and risks related to Laku Pandai products;

7. standard operating procedures including the method of using electronic devices; and

8. customer due diligence (CDD) procedures.
   The implementation of education and training for Laku Pandai Agents is adjusted to the level of ability and needs of the Laku Pandai Agent.
   Letter j
   It is clear enough.
   Letter k
   Examples of specific conditions include natural disasters occurring at the location of the Laku Pandai Agent, failure of the Bank's application system on the electronic device of the Laku Pandai Agent, and the death of the Laku Pandai Agent. Paragraph (2) Letter a Examples of Bank rights and obligations include receiving reports from Laku Pandai Agents and providing education and training to Laku Pandai Agents. Examples of Laku Pandai Agent rights and obligations include receiving service fee payments from the Bank, maintaining customer data confidentiality, and submitting reports to the Bank. Letter b It is clear enough. Letter c It is clear enough. Letter d It is clear enough. Letter e It is clear enough. Letter f It is clear enough.

Letter g
It is clear enough.
Letter h
It is clear enough.
Letter i
It is clear enough.
Letter j
Included here is the method for terminating cooperation before the agreement period ends (early termination).
Letter k
It is clear enough.
Letter l
It is clear enough.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Paragraph (5)
It is clear enough.
Article 21
It is clear enough.
Article 22
Paragraph (1)
Bank analysis includes among other things the financial capacity and adequacy of supporting infrastructure for operational legal entity Laku Pandai Agents that have cooperated with other Banks. Paragraph (2) It is clear enough. Paragraph (3) Example:
Legal entity Laku Pandai Agent PT X cooperates with several conventional banks, namely Bank A, Bank B, and Bank C, as well as an Islamic bank, namely Bank D. Bank A and Bank B are part of the same bank business group. Thus, a retail outlet owned by PT X can only provide:
a. Bank A products; b. Bank B products;
c. Bank C products;
d. Bank D products; e. Bank A and Bank B products; f. Bank A and Bank D products; g. Bank B and Bank D products; h. Bank C and Bank D products; or
i. Bank A, Bank B, and Bank D products.
Article 23
Paragraph (1)
In line with the goal of the Laku Pandai program, which is to expand financial access for the community, the proportion of Laku Pandai Agent locations needs to be directed towards areas where financial service access is still limited. Paragraph (2) It is clear enough.
Article 24
Paragraph (1)
It is clear enough.
Paragraph (2)
Letter a
The unavailability of adequate financial services at the location of the prospective Laku Pandai Agent can be seen among other things from the comparison between the number of Bank customers and the population, as well as the density of Bank office networks. Letter b It is clear enough.

Article 25
Paragraph (1)
Electronic devices are used for customer service and/or monitoring of Laku Pandai Agents by the Bank.
Customer service includes among other things the process of opening and closing BSA accounts.
Monitoring of Laku Pandai Agents includes among other things the recapitulation of transactions at the end of the day.
Letter a
Examples of hardware include computers, laptops, mobile phones, and electronic data capture devices.
Letter b
It is clear enough.
Paragraph (2)
What is meant by "laws and regulations" is Financial Services Authority Regulations including among other things:

1. for Commercial Banks:
   a. Financial Services Authority Regulations regarding the application of risk management in the use of information technology by commercial banks and its implementing provisions; and b. Financial Services Authority Regulations regarding the provision of digital banking services by commercial banks; and
2. for Rural Credit Banks (BPR) and Islamic Rural Credit Banks (BPRS):
   a. Financial Services Authority Regulations regarding standards for the provision of information technology services for rural credit banks and Islamic rural credit banks and its implementing provisions; and b. Financial Services Authority Regulations regarding the provision of rural credit bank and Islamic rural credit bank products.
   Article 26
   Paragraph (1)
   It is clear enough.

Paragraph (2)
Examples of transaction proofs include savings books, short message service (SMS) notifications, instant messaging application notifications, emails, and printed transaction proofs. Paragraph (3) It is clear enough. Paragraph (4) What is meant by "specific conditions" includes among other things:

1. telecommunications network constraints; and
2. natural disasters.
   Paragraph (5)
   It is clear enough.
   Article 27
   Paragraph (1)
   Customer due diligence procedures, known as Customer Due Diligence (CDD), need to be carried out to control risks against the potential for money laundering and/or terrorist financing. In Financial Services Authority Regulations regarding the application of anti-money laundering and counter-terrorist financing programs in the financial services sector, it is regulated that Banks can apply simple CDD to prospective customers with a low risk level of money laundering and/or terrorist financing, including in the implementation of Laku Pandai. Paragraph (2) It is clear enough.
   Article 28
   Paragraph (1)
   It is clear enough.
   Paragraph (2)
   It is clear enough.
   Paragraph (3)
   Deposit return procedures include among other things:
   a. the mechanism for deposit returns; and

b. the time frame for deposit returns, which are appropriate to the conditions and/or location of the Laku Pandai Agent.
Paragraph (4)
It is clear enough.
Paragraph (5)
It is clear enough.
Article 29
Example:
Commercial Bank A provides electronic devices to Laku Pandai Agents for prospective customer verification, in the form of an electronic data capture machine that has fingerprint scanning and identity card scanning functions. Thus, the prospective customer verification process for Commercial Bank A is carried out in accordance with Financial Services Authority Regulations regarding the provision of digital banking services by commercial banks.
Article 30
To obtain a license for the provision of digital banking services, the procedure and requirements for license applications for the provision of digital banking services are carried out in accordance with:

1. Financial Services Authority Regulations regarding the provision of digital banking services by commercial banks; and

2. Financial Services Authority Regulations regarding the provision of commercial bank products.
   Article 31
   Paragraph (1)
   Specific jobs that can be carried out by third parties include among other things jobs related to the management of Laku Pandai Agents and the provision of information technology services. Examples of specific jobs related to the management of Laku Pandai Agents include among other things:

3. recruitment of Laku Pandai Agents;

4. training and education of Laku Pandai Agents;

5. liquidity management of Laku Pandai Agents; and

6. monitoring and supervision of Laku Pandai Agents.
   Paragraph (2)
   Example:
   In carrying out training and education for Laku Pandai Agents, the third party has sufficient ability and understanding of the material to be presented.
   Paragraph (3)
   It is clear enough.
   Paragraph (4)
   What is meant by "laws and regulations" includes among other things:

7. Financial Services Authority Regulations regarding prudential principles for commercial banks that delegate part of their work implementation to other parties and its implementing provisions; and

8. Financial Services Authority Regulations regarding the application of risk management in the use of information technology by commercial banks and its implementing provisions.
   Article 32
   Paragraph (1)
   It is clear enough.
   Paragraph (2)
   It is clear enough.
   Paragraph (3)
   Examples of authenticity factors include:
   a. what you know (what you know), such as Personal Identification Number (PIN) and password; b. what you have (what you have), such as magnetic cards, chip cards, tokens, and electronic signatures; and
   c. your characteristics (what you are) such as biometrics like fingerprints, voice, and iris.
   Paragraph (4)
   It is clear enough.
   Paragraph (5)
   It is clear enough.

Article 33
Clearly stated.

Article 34
Clearly stated.

Article 35
Paragraph (1)
The report on the development of Laku Pandai implementation includes among others:
a. the development of Laku Pandai Agents; b. the development of Laku Pandai products; and
c. transactions related to Laku Pandai products.

Paragraph (2)
Clearly stated.

Article 36
Clearly stated.

Article 37
Clearly stated.

Article 38
Paragraph (1)
Clearly stated.

Paragraph (2)
Specific considerations, among others from the results of supervision by the Financial Services Authority, are known to include:

1. violations of bank secrecy regulations; and/or
2. Laku Pandai Agents have previously cooperated with other banks that have similar business activities outside the same banking business group, and the cooperation is still ongoing.

Article 39
Policies and procedures in the implementation of Laku Pandai include among others:

1. policies regarding the mechanism for changing the classification of Laku Pandai Agents; and
2. procedures for the return of customer deposits that were rejected as BSA customers.

Article 40
Clearly stated.

Article 41
Clearly stated.

Article 42
The term "Financial Services Authority reporting system" refers to the Financial Services Authority Online Reporting Application (APOLO).

Article 43
Clearly stated.

Article 44
Clearly stated.

Article 45
Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6759