Implementation of Good Corporate Governance for Commercial Banks

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 17 OF 2023
CONCERNING
THE IMPLEMENTATION OF GOVERNANCE FOR COMMERCIAL BANKS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that to increase bank competitiveness, promote stable and sustainable growth, and contribute to the implementation of social and environmental responsibility, the implementation of integrated governance, risk management, and compliance is required; b. that with the increasing complexity of banking business supported by the development of bank products and information technology innovation, strengthening the implementation of bank governance is necessary;
c. that the implementation of bank governance supported by integrated risk management and compliance must be able to drive an increase in the quality of healthy bank management, based on prudential principles and ethics, which can increase bank competitiveness, promote sustainable growth in support of economic growth and national stability, and contribute to the implementation of social and environmental responsibility, while still considering the interests of shareholders and stakeholders;
d. that for the strengthening of governance and to encourage banks to carry out various improvements in the implementation of bank governance, the Financial Services Authority Regulation Number 55/POJK.03/2016 concerning the Implementation of Governance for Commercial Banks needs to be replaced; e. that based on considerations as referred to in letters a, b, c, and d, it is necessary to establish a Financial Services Authority Regulation concerning the Implementation of Governance for Commercial Banks;

Recalling:

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 several times, lastly with Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
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) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
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) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);

DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE IMPLEMENTATION OF GOVERNANCE FOR COMMERCIAL BANKS.

CHAPTER I
GENERAL PROVISIONS

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

Commercial Bank, hereinafter referred to as Bank, is a bank that carries out business activities conventionally or carries out business activities based on Sharia principles, which in its activities provides services in the payment circuit, including branch offices of banks located outside the country.
Branch Office of a Bank Located Outside the Country, hereinafter referred to as KCBLN, is a Bank that is a branch office of a bank with legal domicile and has its headquarters outside the country.
Sharia Business Unit, hereinafter abbreviated as UUS, is a work unit of the Bank's headquarters that carries out business activities conventionally which functions as the head office of offices or units that carry out business activities based on Sharia principles, or a work unit at the branch office of a Bank located outside the country that carries out business activities conventionally which functions as the head office of Sharia sub-branches and/or Sharia units.
General Meeting of Shareholders, hereinafter abbreviated as GMS, is the Bank organ that has authority not given to the Board of Directors or Board of Commissioners within the limits determined in the laws concerning limited liability companies and/or the articles of association, or an organ or party equivalent for KCBLN.
Board of Directors is the Bank organ that has the authority and is fully responsible for the management of the Bank for the interests of the Bank, in accordance with the purpose and objectives of the Bank and represents the Bank, both inside and outside the court, in accordance with the provisions of the articles of association for Banks with limited liability company legal status, or the head of the branch office and officials one level below the head of the branch office for KCBLN.
Board of Commissioners is the Bank organ tasked with carrying out general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors for Banks with limited liability company legal status, or parties appointed to carry out supervisory functions for KCBLN.
Independent Commissioner is a member of the Board of Commissioners who does not have financial, managerial, shareholding, and/or family relationships with members of the Board of Directors, other members of the Board of Commissioners, and/or controlling shareholders, including the ultimate controlling shareholder, or relationships with the Bank that can affect the ability of the person concerned to act independently.
Non-Independent Commissioner is a member of the Board of Commissioners who is not an Independent Commissioner.
Independent Party is a party outside the Bank that does not have financial, managerial, shareholding, and/or family relationships with members of the Board of Directors, members of the Board of Commissioners, and/or controlling shareholders, or relationships with the Bank that can affect the ability of the person concerned to act independently.
Good Corporate Governance at the Bank is the structure, process, and mechanism of Bank management to achieve the implementation of Bank business activities that considers the interests of all related stakeholders, creates and optimizes company value at the Bank sustainably, and is based on applicable laws and regulations, standards, ethical values, principles, and practices.
Stakeholders are all parties that have direct or indirect interests in the Bank's business activities.
Executive Officials are Bank officials who are directly responsible to members of the Board of Directors or have significant influence over Bank policies and/or operations.

CHAPTER II
IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE AT THE BANK

Article 2
(1) Banks are required to implement Good Corporate Governance at the Bank in the conduct of business activities.
(2) Business activities as referred to in paragraph (1) consist of:
a. Bank business activities; and b. other activities carried out by the Bank besides business activities, at all levels or stages of the organization, in accordance with the provisions of laws and regulations. (3) The implementation of Good Corporate Governance at the Bank as referred to in paragraph (1) must at least include the principles:
a. openness; b. accountability;
c. responsibility;
d. independence; and e. fairness.
(4) The implementation of Good Corporate Governance at the Bank as referred to in paragraph (1) must at least be manifested in:
a. the execution of duties, responsibilities, and authorities of the Board of Directors; b. the execution of duties, responsibilities, and authorities of the Board of Commissioners;
c. completeness and execution of committee duties;
d. handling of conflicts of interest; e. implementation of the compliance function; f. implementation of the internal audit function; g. implementation of the external audit function; h. implementation of risk management including the internal control system;
i. provision of remuneration;
j. provision of funds to related parties and provision of large funds; k. integrity of reporting and information technology systems;
l. Bank's strategic plan;
m. shareholder aspects; n. implementation of anti-fraud strategy, including anti-bribery; o. implementation of sustainable finance, including the implementation of social and environmental responsibility; and p. implementation of governance in the Bank's business group. (5) In addition to the implementation of governance as referred to in paragraph (1), Banks must follow industry dynamics to drive the implementation of Good Corporate Governance at the Bank.

Article 3
(1) Banks are required to have internal procedures regarding the implementation of Good Corporate Governance at the Bank in the conduct of business activities.
(2) Banks are required to evaluate and update the internal procedures as referred to in paragraph (1) to comply with the provisions of laws and regulations.

Article 4
The Financial Services Authority conducts an assessment of the implementation of Good Corporate Governance at the Bank.

Article 5
(1) Banks that violate the provisions as referred to in Article 2 paragraph (1) and/or Article 3, shall be subject to administrative sanctions in the form of written reprimands.
(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 2 paragraph (1) and/or Article 3, the Bank shall be subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the governance factor assessment in the Bank's health level assessment.
(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibitions as principal parties in accordance with the Financial Services Authority Regulation concerning re-evaluation for principal parties of financial service institutions. (4) In addition to the administrative sanctions as referred to in paragraph (1), paragraph (2), and/or paragraph (3), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER III
BOARD OF DIRECTORS

First Section
Number, Composition, Criteria, and Independence of the Board of Directors

Article 6
(1) Banks are required to have members of the Board of Directors with a minimum number of 3 (three) people.
(2) All members of the Board of Directors as referred to in paragraph (1) are required to reside in Indonesia.
(3) The majority of members of the Board of Directors are required to have at least 5 (five) years of experience in the operational field as executive officials of a bank.
(4) Banks establish in the articles of association regarding the term of office of members of the Board of Directors for a maximum of 5 (five) years for 1 (one) term of office starting from the date of effective appointment of members of the Board of Directors by the GMS, and establish other conditions in the fulfillment of the positions of members of the Board of Directors.

Article 7
(1) One of the members of the Board of Directors as referred to in Article 6 paragraph (1) is required to be appointed as the President Director.
(2) If necessary, other members of the Board of Directors may be appointed as Vice President Directors.
(3) The President Director as referred to in paragraph (1) is required to come from a party independent from the controlling shareholders.

Article 8
For Banks that carry out business activities conventionally and have a Sharia Business Unit, regulations regarding:
a. the responsibility for the development of the Sharia Business Unit for all members of the Board of Directors of Banks that carry out business activities conventionally; and b. the director who oversees the Sharia Business Unit, shall be carried out in accordance with the Financial Services Authority Regulation concerning Sharia Business Units.

Article 9
(1) Every proposal for the replacement and/or appointment of members of the Board of Directors to the GMS must take into account the recommendation of the committee carrying out the nomination function. (2) The replacement and/or appointment of members of the Board of Directors emphasizes professional composition, independence, competency suitability, and considers diversity, which are needed appropriately in the execution of the duties and responsibilities of the Board of Directors. (3) Banks establish in the articles of association regarding the criteria, mechanisms, and procedures for the appointment, replacement, dismissal, and/or resignation of members of the Board of Directors, including the authorities attached to the Board of Directors, in accordance with the provisions of laws and regulations.

Article 10
(1) The dismissal or replacement of members of the Board of Directors must emphasize the primary interests of the Bank.
(2) The dismissal or replacement of members of the Board of Directors as referred to in paragraph (1) carried out before the term of office of members of the Board of Directors ends must take into account at least:
a. the member of the Board of Directors is assessed as unable to carry out duties and responsibilities in the management and implementation of the Bank's healthy strategy; b. the dismissal or replacement of members of the Board of Directors is not based on subjective assessments from shareholders, but is based on objective assessments related to Bank management;
c. the dismissal or replacement of members of the Board of Directors has gone through planning and mechanisms that are in effect, which at least take into account assessments from the committee carrying out the nomination function and has been scheduled in the GMS;
d. the dismissal or replacement of members of the Board of Directors does not result in problems in the organization and business activities of the Bank; e. the implementation of the dismissal or replacement of members of the Board of Directors emphasizes good communication patterns from various related parties; and f. it is carried out by emphasizing the implementation of Good Corporate Governance at the Bank and prudential aspects. (3) The Financial Services Authority has the authority to conduct an evaluation of the decision to dismiss or replace members of the Board of Directors carried out before the term of office of members of the Board of Directors ends.

Article 11
(1) The dismissal or replacement of the President Director and/or the director who oversees the compliance function before the term of office ends must obtain prior approval from the Financial Services Authority before being decided in the GMS. (2) In providing approval as referred to in paragraph (1), the Financial Services Authority conducts an assessment of the feasibility of the plan to dismiss or replace the President Director and/or the director who oversees the compliance function. (3) As material for assessment by the Financial Services Authority as referred to in paragraph (2), the Bank submits a request to the Financial Services Authority containing information regarding:
a. reasons or considerations for the dismissal or replacement of the President Director and/or the director who oversees the compliance function; and b. the Bank may attach the profile of the replacement candidate who is assessed to meet the requirements for the assessment of competence and propriety. (4) The submission of the request to the Financial Services Authority as referred to in paragraph (3) is submitted by the Bank at the latest 1 (one) month before the planned implementation of the GMS containing the agenda for the dismissal or replacement of the President Director and/or the director who oversees the compliance function. (5) In the event that the Financial Services Authority assesses that the plan to dismiss or replace the President Director and/or the director who oversees the compliance function is not feasible, then:
a. the plan to dismiss or replace the President Director and/or the director who oversees the compliance function is not approved by the Financial Services Authority; and b. the Bank is prohibited from including the agenda for the dismissal or replacement of the President Director and/or the director who oversees the compliance function in the GMS.

Article 12
(1) Members of the Board of Directors may resign from their positions before the term of office ends through written notification to the Bank.
(2) In the event that a member of the Board of Directors resigns resulting in the number of members of the Board of Directors becoming less than 3 (three) people as referred to in Article 6 paragraph (1), the resignation is valid if it has been established by the GMS and a new member of the Board of Directors has been appointed. (3) The Financial Services Authority has the authority to conduct an evaluation of the resignation of members of the Board of Directors to assess whether the resignation is voluntary, involves elements of coercion, or other conditions.

Article 13
The authority of the Financial Services Authority to carry out corrective actions and evaluations against actions regarding the appointment, dismissal, replacement, and/or resignation of members of the Board of Directors may be communicated by the Financial Services Authority through written orders in accordance with the Financial Services Authority Regulation concerning written orders.

Article 14
(1) In the event that it is not established in the GMS decision or the Bank's articles of association, the Board of Directors through Board of Directors' decisions establishes:
a. the Bank's organizational structure including the division of duties for members of the Board of Directors; b. the mechanism for replacement directors; and
c. the mechanism in the event that a replacement director cannot carry out their duties.
(2) During the term of office, the division of duties for members of the Board of Directors may be transferred or changed into other divisions of duties, with mechanisms in accordance with the provisions of the Bank's articles of association or determined by the GMS. (3) In the event that the members of the Board of Directors consist of only 1 (one) director, the duties and responsibilities of the director who oversees the compliance function are carried out by the head of the Bank's compliance work unit for a maximum of 6 (six) months. (4) Replacement directors as referred to in paragraph (1) letter b are prohibited from being filled by parties other than members of the Board of Directors who are currently serving, except for the fulfillment of the provisions of laws and regulations. (5) The field of duties of the director filled by the replacement director must apply for a maximum of 6 (six) months. (6) If necessary, the division of duties of the replacement director as referred to in paragraph (5) may be extended based on specific considerations from the Bank and with the approval of the Financial Services Authority.

Article 15
(1) Members of the Board of Directors are prohibited from holding concurrent positions:
a. as members of the board of directors, members of the board of commissioners, members of the Sharia supervisory board, or executive officials at banks, companies, and/or other institutions; b. in functional duty fields at banking financial institutions and/or non-banking financial institutions located domestically and/or abroad;
c. in other positions that can cause conflicts of interest in the execution of duties as members of the Board of Directors; and/or
d. in other positions in accordance with the provisions of laws and regulations.
(2) Concurrent positions as referred to in paragraph (1) do not include the following cases in the event that members of the Board of Directors:
a. are responsible for supervision over the Bank's participation in subsidiary companies, carrying out functional duties as members of the Board of Commissioners at non-bank subsidiary companies controlled by the Bank; b. are responsible for supervision over pension funds or carry out duties as the board of supervisors of pension funds owned by the Bank;
c. carry out duties as replacement directors as referred to in Article 14 paragraph (1) letter b; and/or
d. hold positions in non-profit organizations or institutions, as long as it does not cause the person concerned to neglect the execution of duties and responsibilities as members of the Board of Directors. (3) The implementation of activities of members of the Board of Directors as referred to in:
a. paragraph (2) letters a and b must obtain approval from the Board of Commissioners meeting; and/or b. paragraph (2) letter d is reported in the Board of Commissioners meeting.
(4) Against candidates for members of the Board of Directors who hold positions as referred to in paragraph (2) letters a, b, and d, a statement is required to:
a. maintain integrity; b. avoid all forms of conflicts of interest; and
c. avoid actions that can harm the Bank and/or cause the Bank to violate prudential principles,
during their tenure as members of the Board of Directors.

Article 16
(1) Members of the Board of Directors individually or jointly are prohibited from holding shares in other companies amounting to 25% (twenty-five percent) or more of the paid-up capital of the other company concerned. (2) Share ownership of members of the Board of Directors individually or jointly in connection with the receipt of bonuses and/or stock options in the form of shares that results in share ownership of 25% (twenty-five percent) or more is excluded from paragraph (1). (3) Share ownership of the President Director or the director who oversees the compliance function originating from the provision of bonuses, stock options, management share ownership programs, and/or employee share ownership programs at companies that are controlling shareholders and/or the ultimate controlling shareholder of the Bank, is not calculated in the assessment of independence from controlling shareholders, as long as:
a. the share ownership is a policy of the controlling shareholder and/or the ultimate controlling shareholder of the Bank and is not an initiative of the President Director or the director who oversees the compliance function; b. the share ownership is not for trading; and
c. the person concerned submits a statement letter that they always act independently while serving as President Director or the director who oversees the compliance function even though they hold shares of the controlling shareholder and/or the ultimate controlling shareholder of the Bank.

Article 17
The majority of members of the Board of Directors are prohibited from having family relationships up to the second degree with fellow members of the Board of Directors and/or with members of the Board of Commissioners.

Article 18
Members of the Board of Directors are prohibited from granting general power of attorney to other parties that results in the transfer of duties and functions of the Board of Directors.

Article 19
(1) Members of the Board of Directors are individuals who meet the requirements for approval from the Financial Services Authority.
(2) Members of the Board of Directors who have met the requirements for approval from the Financial Services Authority as referred to in paragraph (1) while serving are required to have:
a. integrity; b. competence; and
c. good reputation.

Second Section
Duties, Responsibilities, and Authorities of the Board of Directors

Article 20
(1) The Board of Directors is tasked with carrying out and is responsible for the management of the Bank for the interests of the Bank in accordance with the purpose and objectives of the Bank established in the provisions of laws and regulations, the articles of association, and GMS decisions. (2) The Board of Directors is required to carry out duties, authorities, and responsibilities with good faith and with the principle of prudence. (3) The Board of Directors has the authority to represent the Bank in accordance with the provisions of laws and regulations, the articles of association, and GMS decisions.

Article 21
The Board of Directors implements Good Corporate Governance at the Bank, risk management, and compliance in an integrated manner that is adjusted to the development of the current banking ecosystem and supported by digitalization and technology innovation.

Article 22
(1) In implementing Good Corporate Governance at the Bank, the Board of Directors is at least required to form:
a. an internal audit work unit; and b. a risk management work unit; and
c. a compliance work unit.
(2) In addition to forming work units as referred to in paragraph (1), the Board of Directors forms other work units that are required in accordance with the Financial Services Authority Regulation.

Article 23
The Board of Directors is required to follow up on audit findings or examinations and recommendations from the Bank's internal audit work unit, external auditors, the results of supervision by the Financial Services Authority, and/or the results of supervision by other authorities and institutions.

Article 24
The Board of Directors is required to disclose to employees the Bank's internal policies that are strategic in the field of human resources.

Article 25
The Board of Directors is required to account for the implementation of their duties to the shareholders through the General Meeting of Shareholders.

Article 26
(1) The Board of Directors is prohibited from using individual advisors and/or professional services as experts or consultants.
(2) The prohibition as referred to in paragraph (1) does not apply to the use of individual advisors and/or professional services with the following conditions:
a. for projects that are specific in nature; b. based on clear employment contracts;
c. implemented by Independent Parties who have specific technical knowledge with adequate qualification standards for expertise to handle projects that are specific in nature as referred to in letter a;
d. implemented by parties who do not hold structural positions in the Bank; and e. implemented by parties who do not have the authority to make operational decisions of the Bank.

Article 27
In the management of data and information related to the Bank, the Board of Directors is required to:
a. possess and provide accurate, relevant, and timely data and information, including to the Board of Commissioners; and b. implement data and information management in accordance with Good Corporate Governance at the Bank and applicable regulations.

Article 28
(1) The Board of Directors is required to have guidelines and rules of work that are binding for every member of the Board of Directors.
(2) The guidelines and rules of work as referred to in paragraph (1) must at least include:
a. the organization of the Bank and the division of tasks for the Board of Directors; b. the duties, responsibilities, and authority of the Board of Directors;
c. the regulation of authority and decision-making procedures of the Board of Directors;
d. the regulation of the Board of Directors' work ethics; e. the regulation of Board of Directors meetings; f. prohibitions against the Board of Directors; g. evaluation of the Board of Directors' performance; and h. the pattern of working relationship between the Board of Directors and the Board of Commissioners.

Article 29
Decisions of the Board of Directors taken in accordance with the guidelines and rules of work are binding and become the responsibility of all members of the Board of Directors.

Third Section
Board of Directors Meetings

Article 30
(1) The Board of Directors is required to hold Board of Directors meetings periodically at least once every month.
(2) The Board of Directors is required to hold joint meetings with the Board of Commissioners periodically at least once every 4 (four) months.
(3) The Board of Directors meetings as referred to in paragraph (1) and paragraph (2) are held if attended by a majority of the Board of Directors members.

Article 31
(1) Every strategic policy and decision must be decided through a Board of Directors meeting, taking into account supervision in accordance with the duties and responsibilities of the Board of Commissioners. (2) Decision-making by the Board of Directors through Board of Directors meetings as referred to in paragraph (1) must first be conducted based on deliberation for consensus. (3) In the event that deliberation for consensus as referred to in paragraph (2) does not occur, decision-making is conducted based on the majority vote. (4) The Board of Directors is required to create minutes of the Board of Directors meetings as referred to in paragraph (1) and document them in accordance with applicable regulations. (5) Differences of opinion that occur in the Board of Directors meetings as referred to in paragraph (1) must be clearly stated in the minutes of the Board of Directors meetings along with the reasons for the differences of opinion.

Fourth Section
Transparency Aspects of the Board of Directors

Article 32
In fulfilling the implementation of corporate governance, members of the Board of Directors disclose:
a. shareholdings reaching 5% (five percent) or more, both in the Bank in question, as well as in other banks and/or companies, located domestically and abroad; b. financial relationships with other members of the Board of Directors, members of the Board of Commissioners, and/or controlling shareholders of the Bank; and
c. family relationships up to the second degree with other members of the Board of Directors, members of the Board of Commissioners, and/or controlling shareholders of the Bank,
in the corporate governance implementation report as regulated in this Financial Services Authority Regulation.

Article 33
(1) Members of the Board of Directors are prohibited from utilizing the Bank for personal, family, and/or third-party interests that can harm or reduce the Bank's profits.
(2) Members of the Board of Directors are prohibited from taking and/or receiving personal benefits from the Bank, other than remuneration and other facilities established based on a decision of the General Meeting of Shareholders. (3) Members of the Board of Directors are required to disclose remuneration and other facilities as referred to in paragraph (2) in accordance with the Financial Services Authority Regulation regarding the implementation of corporate governance in the provision of remuneration for commercial banks and the Financial Services Authority Regulation regarding the implementation of corporate governance in the provision of remuneration for sharia commercial banks and sharia business units.

Fifth Section
Sanctions

Article 34
(1) Banks that violate the provisions as referred to in Article 6 paragraph (1), (2), (3), Article 7 paragraph (1), (3), Article 9 paragraph (1), Article 10 paragraph (1), (2), Article 11 paragraph (1), (5) letter b, Article 14 paragraph (4), (5), Article 15 paragraph (1), (3) letter a, (4), Article 16 paragraph (1), Article 17, Article 18, Article 19 paragraph (2), Article 20 paragraph (2), Article 22 paragraph (1), Article 23, Article 24, Article 25, Article 26 paragraph (1), Article 27, Article 28, Article 30 paragraph (1), (2), Article 31 paragraph (1), (2), (4), (5), and/or Article 33, are subject to administrative sanctions in the form of written reprimands. (2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 6 paragraph (1), (2), (3), Article 7 paragraph (1), (3), Article 9 paragraph (1), Article 10 paragraph (1), (2), Article 11 paragraph (1), (5) letter b, Article 14 paragraph (4), (5), Article 15 paragraph (1), (3) letter a, (4), Article 16 paragraph (1), Article 17, Article 18, Article 19 paragraph (2), Article 20 paragraph (2), Article 22 paragraph (1), Article 23, Article 24, Article 25, Article 26 paragraph (1), Article 27, Article 28, Article 30 paragraph (1), (2), Article 31 paragraph (1), (2), (4), (5), and/or Article 33, the Bank is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.
(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition from acting as principal parties in accordance with the Financial Services Authority Regulation regarding the reassessment of principal parties of financial service institutions. (4) In addition to the administrative sanctions as referred to in paragraph (1), (2), and/or (3), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER IV
BOARD OF COMMISSIONERS

First Section
Number, Composition, Criteria, and Independence of the Board of Commissioners

Article 35
(1) Banks are required to have members of the Board of Commissioners with a minimum number of 3 (three) people and a maximum number equal to the number of Board of Directors members.
(2) At least 1 (one) member of the Board of Commissioners as referred to in paragraph (1) must be domiciled in Indonesia.
(3) Banks establish in the articles of association the term of office for members of the Board of Commissioners for a maximum of 5 (five) years for 1 (one) term of office starting from the effective date of appointment of members of the Board of Commissioners by the General Meeting of Shareholders, and establish other conditions in fulfilling the position of members of the Board of Commissioners.

Article 36
(1) One of the members of the Board of Commissioners as referred to in Article 35 paragraph (1) is required to be appointed as the Chief Commissioner.
(2) If necessary, other members of the Board of Commissioners may be appointed as Deputy Chief Commissioners.

Article 37
For Banks conducting conventional business activities that have a Sharia Business Unit (UUS), the regulation regarding the responsibility for the development of the UUS for the Board of Commissioners of Banks conducting conventional business activities is implemented in accordance with the Financial Services Authority Regulation regarding Sharia business units.

Article 38
(1) Members of the Board of Commissioners consist of Independent Commissioners and Non-Independent Commissioners.
(2) Independent Commissioners as referred to in paragraph (1) must be at least 50% (fifty percent) of the total number of members of the Board of Commissioners.
(3) Candidates for Independent Commissioners must possess:
a. adequate knowledge in the banking field that is relevant to the position as Independent Commissioner; and b. experience in the banking and/or financial fields.
(4) Former members of the Board of Directors, Executive Officials, or parties who have relationships with the Bank that can influence the individual's ability to act independently must undergo a waiting period of at least 1 (one) year before becoming Independent Commissioners at the respective Bank. (5) The waiting period as referred to in paragraph (4) for:
a. former chief executives at the respective Bank; and b. former members of the Board of Directors who oversee supervisory functions or Executive Officials who perform supervisory functions at the respective Bank, is at least 6 (six) months before becoming Independent Commissioners at the respective Bank. (6) In the event that there is a conflict of interest or potential conflict of interest from candidates for Independent Commissioners or candidates for Non-Independent Commissioners related to the Bank in connection with the candidacy of the respective individual, the candidate must disclose the conflict of interest in the process of assessing competence and propriety. (7) In the event that based on the assessment by the Financial Services Authority there is a conflict of interest or potential conflict of interest from candidates for Independent Commissioners or candidates for Non-Independent Commissioners related to the Bank in connection with the candidacy of the respective individual, the Financial Services Authority has the authority to determine necessary supervisory actions.

Article 39
(1) Non-Independent Commissioners may transition to become Independent Commissioners at the respective Bank or banking group by meeting the requirements as Independent Commissioners.
(2) Non-Independent Commissioners who will transition to become Independent Commissioners at the respective Bank as referred to in paragraph (1) are required to undergo a waiting period of at least 1 (one) year. (3) The transition from Non-Independent Commissioner to Independent Commissioner must obtain approval from the Financial Services Authority through an assessment of competence and propriety in accordance with the Financial Services Authority Regulation regarding the assessment of competence and propriety for financial service institutions.

Article 40
(1) Independent Commissioners serve for a specific period and may be reappointed after obtaining approval from the General Meeting of Shareholders, for a maximum of 2 (two) consecutive terms of office. (2) Independent Commissioners who have served for 2 (two) consecutive terms of office may be reappointed in the next term as Independent Commissioners by considering:
a. the results of the assessment of the Independent Commissioner's performance; b. the results of the assessment by the Board of Commissioners meeting stating that the Independent Commissioner can still act independently;
c. the results of the assessment by the head of the internal audit work unit and Executive Officials who oversee human resources functions stating that the Independent Commissioner can still act independently; and
d. the statement of the Independent Commissioner in the General Meeting of Shareholders regarding their independence.

Article 41
(1) Every proposal for the replacement and/or appointment of members of the Board of Commissioners to the General Meeting of Shareholders must take into account the recommendation of the committee performing nomination functions. (2) Members of the committee performing nomination functions who have a conflict of interest with the recommended proposal must disclose it in the recommended proposal. (3) The replacement and/or appointment of members of the Board of Commissioners prioritizes professional composition, independence, competency suitability, and considers diversity, which are needed appropriately in the implementation of the duties and responsibilities of the Board of Commissioners. (4) Banks establish in the articles of association the criteria, mechanisms, and procedures for the appointment, replacement, dismissal, and/or resignation of members of the Board of Commissioners, including the authority attached to the Board of Commissioners, in accordance with applicable regulations.

Article 42
The provisions regarding the dismissal or replacement of members of the Board of Directors as referred to in Article 10 and the provisions regarding the imposition of sanctions related to the dismissal or replacement of members of the Board of Directors as referred to in Article 34 apply mutatis mutandis to members of the Board of Commissioners.

Article 43
The provisions regarding the dismissal or replacement of the chief executive and/or directors who oversee compliance functions before the end of their term of office as referred to in Article 11 and the provisions regarding the imposition of sanctions related to the dismissal or replacement of the chief executive and/or directors who oversee compliance functions before the end of their term of office as referred to in Article 34 apply mutatis mutandis to Independent Commissioners.

Article 44
The provisions regarding the resignation of members of the Board of Directors as referred to in Article 12 apply mutatis mutandis to members of the Board of Commissioners.

Article 45
The provisions regarding the authority of the Financial Services Authority to take corrective actions and evaluate actions regarding the appointment, dismissal, replacement, and/or resignation of members of the Board of Directors as referred to in Article 13 apply mutatis mutandis to members of the Board of Commissioners.

Article 46
(1) Members of the Board of Commissioners are prohibited from holding concurrent positions:
a. as members of the board of directors, members of the board of commissioners, members of the sharia supervisory board, or executive officials at financial institutions or financial companies, both banks and non-banks; b. as members of the board of directors, members of the board of commissioners, members of the sharia supervisory board, or executive officials at more than 1 (one) non-financial institution or company, both located domestically and abroad;
c. in functional task fields at banking financial institutions and/or non-banking financial institutions located domestically and abroad;
d. in other positions that can cause conflicts of interest in the implementation of duties as members of the Board of Commissioners; and/or e. in other positions in accordance with applicable regulations. (2) Concurrent positions as referred to in paragraph (1) do not include:
a. members of the Board of Commissioners serving as members of the board of directors, members of the board of commissioners, or executive officials performing supervisory functions at 1 (one) non-bank subsidiary company controlled by the Bank; b. Non-Independent Commissioners performing functional tasks from the Bank's shareholder which is a legal entity at the Bank and/or the Bank's business group; and/or
c. members of the Board of Commissioners holding positions in non-profit organizations or institutions, provided that it does not cause the individual to neglect the implementation of duties and responsibilities as members of the Board of Commissioners.
(3) With specific considerations, the Financial Services Authority may establish policies regarding concurrent positions as referred to in paragraph (1) letter c, provided that it does not cause the individual to neglect the implementation of duties and responsibilities as members of the Board of Commissioners. (4) Candidates for members of the Board of Commissioners who hold positions as referred to in paragraph (2) are required to make statements to:
a. maintain integrity; b. avoid all forms of conflict of interest; and
c. avoid actions that can harm the Bank and/or cause the Bank to violate prudential principles,
during their tenure as members of the Board of Commissioners.
(5) Independent Commissioners are prohibited from holding concurrent positions as public officials.

Article 47
A majority of members of the Board of Commissioners are prohibited from having family relationships up to the second degree with each other and/or members of the Board of Directors.

Article 48
(1) Members of the Board of Commissioners are individuals who meet the requirements for approval by the Financial Services Authority.
(2) Members of the Board of Commissioners who have met the requirements for approval by the Financial Services Authority as referred to in paragraph (1) during their tenure are required to possess:
a. integrity; b. competence; and
c. a good reputation.

Second Section
Duties, Responsibilities, and Authority of the Board of Commissioners

Article 49
(1) The Board of Commissioners is tasked with conducting supervision for the interests of the Bank over policies and the course of management by the Board of Directors, providing advice to the Board of Directors, and being responsible for such supervision, in accordance with the purpose and objectives of the Bank established in applicable regulations, the articles of association, and decisions of the General Meeting of Shareholders. (2) The Board of Commissioners is required to perform duties, authority, and responsibilities with good faith and with the principle of prudence. (3) In conducting supervision, the Board of Commissioners is required to direct, monitor, and evaluate the implementation of integrated corporate governance, risk management, and compliance, as well as the Bank's strategic policies, in accordance with applicable regulations, the articles of association, and/or decisions of the General Meeting of Shareholders. (4) The Board of Commissioners receives and implements authority delegated and/or granted to the Board of Commissioners in accordance with applicable regulations, the articles of association, and/or decisions of the General Meeting of Shareholders. (5) The Board of Commissioners may perform other supervisory duties and authority. (6) In conducting supervision, the Board of Commissioners is prohibited from participating in decision-making on the Bank's operational activities, except:
a. the provision of funds to related parties in accordance with the Financial Services Authority Regulation regarding maximum limits for credit provision and large fund provision for commercial banks and the Financial Services Authority Regulation regarding maximum limits for fund distribution and large fund distribution for sharia commercial banks; and b. other matters established in the Bank's articles of association or applicable regulations. (7) Decision-making on the Bank's operational activities by the Board of Commissioners as referred to in paragraph (6) is part of the supervisory duties of the Board of Commissioners, so it does not negate the Board of Directors' responsibility for the implementation of the Bank's management.

Article 50
The Board of Commissioners is required to supervise the Board of Directors' follow-up on audit findings or examinations and recommendations from the Bank's internal audit work unit, external auditors, the results of supervision by the Financial Services Authority, and/or the results of supervision by other authorities and institutions as referred to in Article 23.

Article 51
The Board of Commissioners is required to report to the Financial Services Authority within a maximum of 5 (five) working days since the discovery of:
a. violations of regulations in the fields of finance, banking, and those related to the Bank's business activities; and/or b. conditions or estimated conditions that can endanger the continuity of the Bank's business.

Article 52
(1) The Board of Commissioners is required to have guidelines and rules of work that are binding for every member of the Board of Commissioners.
(2) The guidelines and rules of work as referred to in paragraph (1) must at least include:
a. the duties, responsibilities, and authority of the Board of Commissioners; b. the regulation of authority and decision-making procedures of the Board of Commissioners;
c. the regulation of the Board of Commissioners' work ethics;
d. the regulation of Board of Commissioners meetings; e. prohibitions against the Board of Commissioners; f. evaluation of the Board of Commissioners' performance; and g. the pattern of working relationship between the Board of Commissioners and the Board of Directors.

Article 53
The Board of Commissioners is required to provide time to perform duties and responsibilities optimally in accordance with the guidelines and rules of work.

Article 54
The Board of Commissioners is required to safeguard all data and information related to the Bank provided by the Board of Directors, in accordance with applicable regulations.

Third Section
Board of Commissioners Meetings

Article 55
(1) The Board of Commissioners is required to hold Board of Commissioners meetings periodically at least once every 2 (two) months.
(2) The Board of Commissioners is required to hold joint meetings with the Board of Directors periodically at least once every 4 (four) months.
(3) The Board of Commissioners meetings as referred to in paragraph (1) and paragraph (2) are held if attended by a majority of the Board of Commissioners members.
(4) The implementation of Board of Commissioners meetings must be attended by all members of the Board of Commissioners in person at least 2 (two) times in 1 (one) year.
(5) Non-Independent Commissioners who cannot attend meetings in person as referred to in paragraph (4) may attend Board of Commissioners meetings via face-to-face interaction utilizing information technology.

Article 56
(1) Decision-making in Board of Commissioners meetings must first be conducted based on deliberation for consensus.
(2) In the event that deliberation for consensus as referred to in paragraph (1) does not occur, decision-making in Board of Commissioners meetings is conducted based on the majority vote. (3) All decisions of the Board of Commissioners as referred to in paragraph (1) and paragraph (2) are binding on all members of the Board of Commissioners. (4) The Board of Commissioners is required to create minutes of the Board of Commissioners meetings as referred to in paragraph (1) and document them in accordance with applicable regulations. (5) Differences of opinion that occur in the Board of Commissioners meetings as referred to in paragraph (1) must be clearly stated in the minutes of the Board of Commissioners meetings along with the reasons for the differences of opinion.

Fourth Section
Transparency Aspects of the Board of Commissioners

Article 57
In fulfilling the implementation of corporate governance, members of the Board of Commissioners disclose:
a. shareholdings reaching 5% (five percent) or more, both in the Bank in question as well as in other banks and/or companies, located domestically and abroad; b. financial relationships with other members of the Board of Commissioners, members of the Board of Directors, and/or controlling shareholders of the Bank; and
c. family relationships up to the second degree with other members of the Board of Commissioners, members of the Board of Directors, and/or controlling shareholders of the Bank,
in the corporate governance implementation report as regulated in this Financial Services Authority Regulation.

Article 58
(1) Members of the Board of Commissioners are prohibited from utilizing the Bank for personal, family, and/or third-party interests that can harm or reduce the Bank's profits.
(2) Members of the Board of Commissioners are prohibited from taking and/or receiving personal benefits from the Bank other than remuneration and other facilities established by the General Meeting of Shareholders. (3) Members of the Board of Commissioners are required to disclose remuneration and other facilities as referred to in paragraph (2) in accordance with the Financial Services Authority Regulation regarding the implementation of corporate governance in the provision of remuneration for commercial banks and the Financial Services Authority Regulation regarding the implementation of corporate governance in the provision of remuneration for sharia commercial banks and sharia business units.

Fifth Section
Sanctions

Article 59
(1) Banks that violate the provisions as referred to in Article 35 paragraph (1), (2), Article 36 paragraph (1), Article 38 paragraph (2), (4), Article 39 paragraph (2), (3), Article 41 paragraph (1), (2), Article 46 paragraph (1), (4), (5), Article 47, Article 48 paragraph (2), Article 49 paragraph (2), (3), (6), Article 50, Article 51, Article 52,

Article 53, Article 54, Article 55 paragraph (1), paragraph (2), paragraph (4),
Article 56 paragraph (1), paragraph (4), paragraph (5), and/or Article 58,
are subject to administrative sanctions in the form of written reprimands.
(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and has not yet fulfilled the provisions as referred to in Article 35 paragraph (1), paragraph (2), Article 36 paragraph (1), Article 38 paragraph (2), paragraph (4), Article 39 paragraph (2), paragraph (3), Article 41 paragraph (1), paragraph (2), Article 46 paragraph (1), paragraph (4), paragraph (5),
Article 47, Article 48 paragraph (2), Article 49 paragraph (2), paragraph (3),
paragraph (6), Article 50, Article 51, Article 52, Article 53, Article 54, Article 55 paragraph (1), paragraph (2), paragraph (4), Article 56 paragraph (1), paragraph (4), paragraph (5), and/or Article 58, the Bank is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.
(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition as principal parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions. (4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), and/or paragraph (3), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER V
COMMITTEES
First Section
General
Article 60
To assist and support the implementation of the duties and responsibilities of the Board of Directors, the Board of Directors forms a Board of Directors committee.
Article 61
To assist and support the implementation of the duties and responsibilities of the Board of Commissioners, the Board of Commissioners forms a Board of Commissioners committee.

Second Section
Board of Directors Committees
Article 62
(1) Committees formed by the Board of Directors are responsible to the Board of Directors.
(2) The Board of Directors is required to form committees consisting of at least:
a. risk management committee; b. credit or financing policy committee;
c. credit or financing committee; and
d. information technology steering committee.
(3) The Board of Directors may form other committees adjusted to needs and/or the complexity of the Bank.
(4) The Board of Directors is required to evaluate the performance of committees at least at the end of each fiscal year.
Third Section
Board of Commissioners Committees
Paragraph 1
General
Article 63
(1) Committees formed by the Board of Commissioners are responsible to the Board of Commissioners.
(2) The Board of Commissioners is required to form committees consisting of at least:
a. audit committee; b. risk monitoring committee; and
c. remuneration and nomination committee.
(3) The Board of Commissioners may form the remuneration and nomination committee as referred to in paragraph (2) letter c separately into a remuneration committee and a nomination committee. (4) The Board of Commissioners may form other committees that are adjusted to needs and/or the complexity of the Bank and/or expand the scope of implementation of duties, responsibilities, and authority of committees in supporting the implementation of duties and responsibilities of the Board of Commissioners' supervision. (5) The appointment and dismissal of members of the Board of Commissioners committees must be carried out by the Board of Directors based on the decision of the Board of Commissioners meeting. (6) The Board of Commissioners is required to evaluate the performance of committees at least at the end of each fiscal year. Paragraph 2 Audit Committee
Article 64
(1) Members of the audit committee as referred to in
Article 63 paragraph (2) letter a must be entirely independent, consisting of at least:
a. 1 (one) Independent Commissioner; and b. Independent Parties:

1 (one) person with expertise in
finance or accounting fields; and
1 (one) person with expertise:
a) in the legal or banking field, for Banks conducting business activities conventionally; or b) in the Islamic banking field, for Banks conducting business activities in accordance with Sharia and Banks conducting business activities conventionally that have Sharia Business Units (UUS). (2) For Banks conducting business activities in accordance with Sharia and Banks conducting business activities conventionally that have Sharia Business Units (UUS), 1 (one) person member of the Sharia Supervisory Board may become a member of the audit committee. (3) The expertise of Independent Parties as referred to in paragraph (1) letter b must be proven at least by the possession of competency certificates that support the implementation of the functions and responsibilities of the committee. (4) The audit committee as referred to in paragraph (1) is chaired by an Independent Commissioner who also serves as a member. (5) Members of the Board of Directors are prohibited from becoming members of the audit committee as referred to in paragraph (1). Paragraph 3 Risk Monitoring Committee
Article 65
(1) The risk monitoring committee as referred to in
Article 63 paragraph (2) letter b must consist of at least:
a. 1 (one) Independent Commissioner; b. 1 (one) Independent Party with expertise in risk management field; and
c. 1 (one) person from an Independent Party with
expertise in:
the finance field, for Banks that
conduct business activities conventionally; or
the Islamic banking field, for Banks
conducting business activities in accordance with Sharia and Banks conducting business activities conventionally that have Sharia Business Units (UUS).
(2) For Banks conducting business activities in accordance with Sharia and Banks conducting business activities conventionally that have Sharia Business Units (UUS), 1 (one) person member of the Sharia Supervisory Board may become a member of the risk monitoring committee. (3) The expertise of Independent Parties as referred to in paragraph (1) letter b and letter c must be proven by:
a. mandatory possession of risk management certificates as applicable to the Board of Directors; and

b. possession of competency certificates that support the implementation of the functions and responsibilities of the committee.
(4) The risk monitoring committee as referred to in paragraph (1) is chaired by an Independent Commissioner who also serves as a member.
(5) Members of the Board of Directors are prohibited from becoming members of the risk monitoring committee as referred to in paragraph (1).
(6) The majority of members of the risk monitoring committee as referred to in paragraph (1) consists of Independent Commissioners and Independent Parties.
Paragraph 4
Remuneration and Nomination Committee
Article 66
(1) The remuneration and nomination committee as referred to in
Article 63 paragraph (2) letter c must consist of at least:
a. 1 (one) Independent Commissioner; b. 1 (one) Non-Independent Commissioner; and
c. 1 (one) Executive Officer who
oversees the human resources function or
1 (one) person representing Bank employees.
(2) In the event that the Bank does not have a Non-Independent Commissioner, the remuneration and nomination committee as referred to in Article 63 paragraph (2) letter c must consist of at least:
a. 2 (two) Independent Commissioners; and b. 1 (one) Executive Officer who oversees the human resources function or 1 (one) person representing Bank employees.
(3) For Banks conducting business activities in accordance with Sharia and Banks conducting business activities conventionally that have Sharia Business Units (UUS), 1 (one) person member of the Sharia Supervisory Board may become a member of the remuneration and nomination committee. (4) The remuneration and nomination committee as referred to in paragraph (1) or paragraph (2) is chaired by an Independent Commissioner who also serves as a member. (5) Members of the Board of Directors are prohibited from becoming members of the remuneration and nomination committee as referred to in paragraph (1). (6) In the event that members of the remuneration and nomination committee exceed 3 (three) persons, there must be at least 2 (two) Independent Commissioners.
Article 67
In the event that the Bank forms a remuneration and nomination committee separately as referred to in
Article 63 paragraph (3), the membership of each committee must be
implemented in accordance with Article 66.

Paragraph 5
Other Board of Commissioners Committees
Article 68
In the event that the Board of Commissioners forms other committees as referred to in Article 63 paragraph (4), the membership of other committees must consist of at least Independent Commissioners and/or Non-Independent Commissioners, and may involve other parties in accordance with the purpose of forming the committee. Paragraph 6 Independent Parties
Article 69
(1) Former members of the Board of Directors, Executive Officers, or parties who have relationships with the Bank that can affect the individual's ability to act independently must undergo a waiting period of at least 6 (six) months before becoming Independent Parties in the members of committees at the Bank in question as referred to in Article 64 paragraph (1) letter b as well as Article 65 paragraph (1) letter b and letter c. (2) The waiting period as referred to in paragraph (1) does not apply to former members of the Board of Directors who oversaw the supervision function or Executive Officers who performed supervision functions at the Bank in question. Paragraph 7 Concurrent Position as Chairman of Board of Commissioners Committees
Article 70
The Chairman of the Board of Committees as referred to in
Article 63 is prohibited from holding concurrent positions as chairman
of committees in more than 1 (one) other committee.
Paragraph 8
Duties, Responsibilities, and Authority of Board of Commissioners Committees
Article 71
(1) The audit committee is required to have duties and responsibilities to perform monitoring and evaluation of:
a. planning and implementation of audits; and b. monitoring of follow-up on audit results, to assess the adequacy of internal controls including the adequacy of the financial reporting process. (2) To implement the duties and responsibilities as referred to in paragraph (1), the audit committee is required to perform monitoring and evaluation of at least:
a. the implementation of duties by the internal audit work unit; b. the conformity of financial reports with financial accounting standards; and

c. the implementation of follow-up by the Board of Directors on the results
of findings of the Bank's internal audit work unit, external auditors, results of supervision by the Financial Services Authority, and/or results of supervision by other authorities and institutions. (3) The results of monitoring and evaluation as referred to in paragraph (2) are used to provide recommendations to the Board of Commissioners. (4) The audit committee plays a role and implements duties and responsibilities in accordance with the Financial Services Authority Regulation regarding the use of public accountants and accounting firms in financial service activities.
Article 72
(1) The risk monitoring committee is required to have duties and responsibilities to perform at least:
a. evaluation of conformity between risk management policies and the implementation of Bank policies; and b. monitoring and evaluation of the implementation of duties of the risk management committee and risk management work unit. (2) The results of evaluation as referred to in paragraph (1) letter a and the results of monitoring and evaluation as referred to in paragraph (1) letter b are used to provide recommendations to the Board of Commissioners.
Article 73
The remuneration and nomination committee is required to have duties and responsibilities to perform at least:
a. remuneration policies in accordance with the Financial Services Authority Regulation regarding the implementation of corporate governance in the provision of remuneration for universal banks and the Financial Services Authority Regulation regarding the implementation of corporate governance in the provision of remuneration for Islamic universal banks and Sharia business units; and b. nomination policies:

drafting and providing recommendations
regarding the system and procedures for the selection and/or replacement of Board of Directors members and Board of Commissioners members to the Board of Commissioners to be submitted to the General Meeting of Shareholders (RUPS);
identifying and providing recommendations
regarding candidates for Board of Directors members and/or candidates for Board of Commissioners members to the Board of Commissioners to be submitted to the General Meeting of Shareholders (RUPS);
providing recommendations to the Board of
Commissioners regarding Independent Parties who will become members of the audit committee as referred to in Article 64 paragraph (1) letter b as well as members of the risk monitoring committee as referred to in Article 65 paragraph (1) letter b and letter c; and
drafting mechanisms and performing performance
assessments of the Board of Directors and Board of Commissioners.
Article 74
(1) Board of Committees have the authority to conduct activities in the implementation of duties and responsibilities of the committees.
(2) Members of the Board of Committees from Independent Parties are required to implement duties, responsibilities, and authority with integrity, independence, competence, and maintain reputation. Fourth Section Guidelines and Rules of Procedure for Committees
Article 75
(1) Banks are required to have guidelines and rules of procedure for committees to:
a. Board of Directors committees as referred to in
Article 62 paragraph (2) and paragraph (3); and
b. Board of Committees as referred to in
Article 63 paragraph (2), paragraph (3), and paragraph (4).
(2) The guidelines and rules of procedure for committees as referred to in paragraph (1) must contain at least:
a. the purpose of forming the committee; b. duties, responsibilities, and authority of the committee;
c. structure and membership of the committee;
d. committee meetings, quorum, and decision-making; e. term of office for committee members from Independent Parties; f. performance evaluation mechanisms; and g. period for periodic review of committee guidelines and rules of procedure. (3) Banks are required to review the guidelines and rules of procedure for committees as referred to in paragraph (1) for each Board of Directors committee and Board of Committees periodically, at least 1 (one) time in 3 (three) years. Fifth Section Committee Meetings Paragraph 1 Board of Directors Committee Meetings
Article 76
Board of Directors committee meetings as referred to in Article 62 paragraph (2) and paragraph (3) are held in accordance with the needs of the Bank.
Paragraph 2
Board of Committees Meetings
Article 77
(1) Board of Committees meetings are held in accordance with the needs of the Bank, at least:
a. 1 (one) time in 1 (one) month for the audit committee as referred to in Article 63 paragraph (2) letter a; b. 1 (one) time in 1 (one) month for the risk monitoring committee as referred to in
Article 63 paragraph (2) letter b; and
c. 1 (one) time in 3 (three) months for the
remuneration and nomination committee as referred to in
Article 63 paragraph (2) letter c or
Article 63 paragraph (3).
(2) The implementation of meetings of other Board of Committees as referred to in Article 63 paragraph (4) is stated in the guidelines and rules of procedure for committees.
(3) Audit committee meetings and risk monitoring committee meetings are held if attended by the majority of committee members.
(4) Remuneration and nomination committee meetings are held if attended by the majority of committee members, including the presence of:
a. 1 (one) Independent Commissioner; and b. 1 (one) Executive Officer who oversees the human resources function or 1 (one) person representing Bank employees.
(5) In the event that members of the remuneration and nomination committee do not meet the minimum requirements as referred to in
Article 66 paragraph (1), paragraph (2), and Article
67, recommendations of the committee performing nomination functions:
a. may be accepted, in the event that the membership of the remuneration and nomination committee includes at least 1 (one) Independent Commissioner or 1 (one) Non-Independent Commissioner; or b. are excluded, in the event of a vacancy in Board of Commissioners membership, regarding proposals for replacement and/or appointment of Board of Directors members and/or Board of Commissioners members to the General Meeting of Shareholders (RUPS) as referred to in Article 9 paragraph (1) and Article 41 paragraph (1).
Article 78
(1) Decisions of committee meetings are first made based on deliberation for consensus.
(2) In the event that deliberation for consensus as referred to in paragraph (1) is not reached, decision-making is carried out based on the majority vote.
(3) The results of committee meetings as referred to in paragraph (1) must be recorded in meeting minutes and documented in accordance with applicable legislation.
(4) Differences of opinion that occur in committee meetings as referred to in paragraph (1) must be clearly stated in the meeting minutes along with the reasons for the differences of opinion.

Sixth Section
Sanctions
Article 79
(1) Banks that violate provisions as referred to in
Article 62 paragraph (2), paragraph (4), Article 63
paragraph (2), paragraph (5), paragraph (6), Article 64 paragraph (1), paragraph (5),
Article 65 paragraph (1), paragraph (3) letter a, paragraph (5), Article 66 paragraph
(1), paragraph (2), paragraph (5), Article 67, Article 69 paragraph (1), Article 70, Article 71 paragraph (1), paragraph (2), Article 72 paragraph (1), Article 73, Article 74 paragraph (2), Article 75 paragraph (1), paragraph (3), Article 78 paragraph (3), and/or paragraph (4), are subject to administrative sanctions in the form of written reprimands. (2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate provisions as referred to in
Article 62 paragraph (2), paragraph (4), Article 63 paragraph (2), paragraph (5),
paragraph (6), Article 64 paragraph (1), paragraph (5), Article 65 paragraph (1), paragraph (3) letter a, paragraph (5), Article 66 paragraph (1), paragraph (2), paragraph (5), Article 67, Article 69 paragraph (1), Article 70, Article 71 paragraph (1), paragraph (2), Article 72 paragraph (1), Article 73, Article 74 paragraph (2), Article 75 paragraph (1), paragraph (3), Article 78 paragraph (3), and/or paragraph (4), the Bank is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.
(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition as principal parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions. (4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), and/or paragraph (3), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER VI
CONFLICT OF INTEREST
Article 80
(1) Members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officers, and Bank employees must avoid all forms of conflict of interest in the implementation of Bank management and supervision duties. (2) In the event of a conflict of interest, members of the Board of Directors, members of the Board of Commissioners, members of committees of the Bank, members of the Sharia Supervisory Board, Executive Officers, and Bank employees are required to disclose conflicts of interest in every decision that meets the conditions of having a conflict of interest. (3) In addition to disclosing conflicts of interest as referred to in paragraph (2), members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officers, and Bank employees are prohibited from taking actions that are potentially detrimental to the Bank or reduce Bank profits. (4) Banks are required to have a conflict of interest policy aimed at identifying, reducing, and managing potential conflicts of interest that may arise in the Bank due to the implementation of Bank business activities, which are codified in regulations.
Article 81
(1) Banks that violate provisions as referred to in
Article 80 paragraph (2), paragraph (3) and/or
paragraph (4), are subject to administrative sanctions in the form of written reprimands.
(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate provisions as referred to in
Article 80 paragraph (2), paragraph (3) and/or paragraph (4), the Bank
is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.
(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition as principal parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions. (4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), and/or paragraph (3), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER VII
COMPLIANCE FUNCTION
Article 82
(1) Banks are required to ensure compliance with the provisions of the Financial Services Authority and applicable legislation.

(2) To ensure Bank compliance as referred to in paragraph (1), Banks are required to have a director who oversees the compliance function and form a compliance work unit.
(3) The implementation of duties of the director who oversees the compliance function and the compliance work unit, as well as the implementation of other Bank compliance functions is carried out in accordance with the Financial Services Authority Regulation regarding the implementation of the compliance function of universal banks. (4) Banks that violate provisions as referred to in paragraph (1) and/or paragraph (2) are subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the implementation of the compliance function of universal banks. (5) In addition to administrative sanctions as referred to in paragraph (4), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER VIII
INTERNAL AUDIT FUNCTION
Article 83
(1) Banks are required to have an internal audit function.
(2) The internal audit function as referred to in paragraph (1) is implemented by an internal audit work unit that acts independently and objectively.
(3) The implementation of the internal audit function including structure, authority, and main duties of the internal audit work unit as well as other aspects in the implementation of the internal audit function are carried out in accordance with the Financial Services Authority Regulation regarding the implementation of the internal audit function in universal banks. (4) In the implementation of the internal audit function, Banks are required to communicate with the Financial Services Authority at least 1 (one) time in 1 (one) year. (5) Banks are required to submit reports to the Financial Services Authority regarding the implementation of the internal audit function, consisting of:
a. reports on the appointment or dismissal of the head of the internal audit work unit; b. special reports regarding any internal audit findings estimated to endanger the continuity of the Bank's business;
c. reports on the results of reviews by independent external parties;
d. reports on the implementation and main points of internal audit results; and e. other reports upon request of the Financial Services Authority.

(6) Banks that violate the provisions as referred to in paragraph (1), paragraph (4) and/or paragraph (5), shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the implementation of the internal audit function in commercial banks.

(7) In addition to the administrative sanctions as referred to in paragraph (6), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER IX
EXTERNAL AUDIT FUNCTION

Article 84
(1) In providing transparent and quality financial information, Banks utilize the external audit function through public accountants and/or public accounting firms.

(2) The utilization and appointment of public accountants and/or public accounting firms in Banks shall be in accordance with the Financial Services Authority Regulation regarding the use of public accountants and public accounting firms in financial service activities.

(3) Violations of the provisions regarding the implementation of the external audit function by public accountants and/or public accounting firms shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the use of public accountants and public accounting firms in financial service activities.

(4) In addition to the administrative sanctions as referred to in paragraph (3), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER X
RISK MANAGEMENT IMPLEMENTATION

Article 85
(1) Banks are required to:
a. implement appropriate and effective risk management and internal control systems; b. have an early warning system for risks; and
c. conduct periodic evaluations of risk management implementation,
which are adjusted to the complexity and scale of the Bank's business, with reference to the requirements and procedures in accordance with the Financial Services Authority Regulation regarding the implementation of risk management for commercial banks and the Financial Services Authority Regulation regarding the implementation of risk management for Islamic commercial banks and Sharia business units.

(2) Banks implement integrated governance, risk management, and compliance, supported by:
a. digitalization; b. technological innovation; and
c. necessary systems and procedures.

(3) Banks that violate the provisions as referred to in paragraph (1) shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the implementation of risk management for commercial banks and the Financial Services Authority Regulation regarding the implementation of risk management for Islamic commercial banks and Sharia business units.

(4) In addition to the administrative sanctions as referred to in paragraph (3), Banks may be subject to administrative sanctions in the form of a ban on issuing new Bank products.

(5) In addition to the administrative sanctions as referred to in paragraph (3) and paragraph (4), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

Article 86
(1) Banks are required to implement anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction programs in carrying out business activities, in accordance with the Financial Services Authority Regulation regarding the implementation of anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction programs in the financial services sector.

(2) The implementation of anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction programs as referred to in paragraph (1) includes prevention and handling to ensure that the Bank's business activities are not utilized in activities related to criminal offenses in accordance with statutory regulations regarding the prevention and eradication of money laundering criminal offenses.

(3) Banks that violate the provisions in paragraph (1) shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the implementation of anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction programs in the financial services sector.

Article 87
(1) The Board of Commissioners and the Board of Directors are required to ensure that risk management implementation covers country risk and transfer risk in accordance with the Financial Services Authority Regulation regarding the implementation of risk management for commercial banks and the Financial Services Authority Regulation regarding the implementation of risk management for Islamic commercial banks and Sharia business units.

(2) In the implementation of risk management related to country risk and transfer risk as referred to in paragraph (1), the Board of Directors is required to at least:
a. formulate and establish strategies in managing country risk and transfer risk in accordance with the bank's characteristics and complexity; b. establish risk limits and monitor compliance with exposure limits for country risk and transfer risk;
c. formulate, establish, and ensure the implementation of policies and procedures to identify, measure, monitor, and control risks related to country risk and transfer risk in bank business activities;
d. monitor developments in country risk and transfer risk, and implement adequate follow-up actions; e. control credit risk against country risk and transfer risk exposures for each country, which includes intragroup exposures, exposures based on specific regions, exposures based on individuals, and exposures based on counterparties; f. have and develop an information management system for country risk and transfer risk that is capable of providing data that is accurate, complete, informative, timely, and reliable so as to provide adequate reports; g. conduct periodic evaluation and testing (stress testing) at least 1 (one) time within 1 (one) year or based on specific conditions that will have a significant impact on the Bank; and h. ensure adequate internal control and review of country risk and transfer risk.

(3) In the implementation of risk management related to country risk and transfer risk as referred to in paragraph (1), the Board of Commissioners is required to at least:
a. evaluate the strategies and policies related to country risk and transfer risk established by the Board of Directors; and b. evaluate the accountability of the Board of Directors and provide guidance for improvement regarding the implementation of policies related to country risk and transfer risk on a periodic basis.

Article 88
(1) The Board of Directors is required to formulate and submit the results of identification, measurement, monitoring, and control of country risk and transfer risk in the risk profile report.

(2) The Board of Commissioners through the Risk Monitoring Committee is required to supervise the implementation of risk management related to country risk and transfer risk carried out by the Bank, including the implementation of evaluation and testing (stress testing).

Article 89
(1) The Board of Directors is required to at least:
a. formulate policies and procedures for identifying and managing troubled assets, asset classification, calculations related to provisions and reserves, and write-off of assets; b. conduct periodic reviews of asset classification and reserves for troubled credits and/or financing, and adequately identify and manage troubled assets, including reserves that align with the risks incurred; and
c. conduct periodic reviews of formed reserves to ensure they align with current conditions,
in accordance with standards and statutory regulations.

(2) The Board of Commissioners is required to actively supervise the implementation of troubled asset management, provisions, and reserves carried out by the Bank in credit risk management.

Article 90
Banks that engage in partnerships in business activities are required to conduct partnerships in accordance with prudential principles, risk management, and healthy Bank management.

Article 91
(1) Banks that violate the provisions as referred to in Article 87, Article 88, Article 89, and/or Article 90, shall be subject to administrative sanctions in the form of written reprimands.

(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 87, Article 88, Article 89, and/or Article 90, the Bank shall be subject to administrative sanctions in the form of:
a. a ban on issuing new Bank products; b. suspension of certain Bank business activities;
c. a ban on expanding business activities;
d. a ban on conducting new business activities; and/or e. a reduction in the corporate governance factor assessment in the Bank's health level assessment.

(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of a ban as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER XI
REMUNERATION

Article 92
(1) Banks are required to implement governance in the provision of remuneration.

(2) Banks are required to have written remuneration policies for the Board of Directors, Board of Commissioners, Sharia Supervisory Board, and Bank employees.

(3) Banks may defer the payment of variable remuneration that is deferred (malus) or withdraw variable remuneration that has already been paid (clawback) under specific conditions established by the Bank.

(4) Under specific conditions, the Financial Services Authority has the authority to:
a. review the amount of variable remuneration for the Board of Directors, Board of Commissioners, Sharia Supervisory Board, and/or Bank employees; b. evaluate the payment of variable remuneration that is not in accordance with the principles of fairness and justice; and/or
c. order the Bank to adjust variable remuneration policies.

(5) The implementation of governance in the provision of remuneration shall be carried out in accordance with the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for commercial banks and the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for Islamic commercial banks and Sharia business units.

(6) Banks that violate the provisions in paragraph (1) and paragraph (2) shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for commercial banks and the Financial Services Authority Regulation regarding the implementation of governance in the provision of remuneration for Islamic commercial banks and Sharia business units.

(7) In addition to the administrative sanctions as referred to in paragraph (6):
a. the Bank's principal parties may be subject to administrative sanctions in the form of a ban as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions; and b. Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XII
PROVISION OF FUNDS TO RELATED PARTIES AND LARGE FUNDS PROVISION

Article 93
(1) Banks are required to implement prudential principles in the provision of funds at least by implementing the distribution or diversification of the portfolio of funds provided.

(2) The implementation of the provisions as referred to in paragraph (1) regarding the provision of funds to related parties and/or large funds provision, and the imposition of administrative sanctions, shall be carried out in accordance with the Financial Services Authority Regulation regarding maximum limits for credit provision and large funds provision for commercial banks and the Financial Services Authority Regulation regarding maximum limits for fund disbursement and large fund disbursement for Islamic commercial banks.

(3) In addition to the administrative sanctions as referred to in paragraph (2), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XIII
REPORTING INTEGRITY AND INFORMATION TECHNOLOGY

Article 94
(1) Banks are required to implement transparency of financial and non-financial conditions to Stakeholders, at least by:
a. formulating and presenting reports with procedures, types, and scope in accordance with the Financial Services Authority Regulation regarding transparency and publication of bank reports; and b. having information dissemination channels that are reliable for Stakeholders.

(2) Banks that violate the provisions as referred to in paragraph (1) shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding transparency and publication of bank reports.

Article 95
(1) Banks are required to implement transparency of information regarding products and the use of consumer and/or customer data of the Bank with reference to:
a. the Financial Services Authority Regulation regarding the provision of commercial bank products; and b. the Financial Services Authority Regulation regarding consumer and public protection in the financial services sector.

(2) Banks that violate the provisions as referred to in paragraph (1) shall be subject to administrative sanctions in accordance with:
a. the Financial Services Authority Regulation regarding the provision of commercial bank products; and/or b. the Financial Services Authority Regulation regarding consumer and public protection in the financial services sector.

Article 96
(1) Banks are required to formulate and publish sustainability reports.

(2) In formulating and publishing sustainability reports as referred to in paragraph (1), Banks shall refer to the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.

(3) Banks that violate the provisions as referred to in paragraph (1) shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.

Article 97
(1) Banks are required to formulate and submit structured and unstructured reports to the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding reporting of commercial banks through the Financial Services Authority reporting system.

Article 98
Banks are required to ensure the reliability of the preparation of financial reports and unaudited financial performance information.

Article 99
(1) In the implementation of information technology by Banks, reference shall be made to the Financial Services Authority Regulation regarding the implementation of information technology by commercial banks.

Article 100
Banks are required to ensure the availability and adequacy of internal reporting supported by adequate information management systems to improve the quality of the decision-making process by the Board of Directors and the quality of the supervision process by the Board of Commissioners.

Article 101
Banks are prohibited from utilizing and/or abusing financial engineering and/or legal engineering for the benefit of the Bank and/or other parties, both internal and external to the Bank, which are not in accordance with the principles of healthy Bank management.

Article 102
(1) Banks that violate the provisions as referred to in Article 98, Article 100 and/or Article 101, shall be subject to administrative sanctions in the form of written reprimands.

(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 98, Article 100 and/or Article 101, the Bank shall be subject to administrative sanctions in the form of:
a. a ban on issuing new Bank products; b. suspension of certain Bank business activities;
c. a ban on expanding business activities;
d. a ban on conducting new business activities; and/or e. a reduction in the corporate governance factor assessment in the Bank's health level assessment.

(4) In addition to the administrative sanctions as referred to in Article 94 paragraph (2), Article 95 paragraph (2), Article 96 paragraph (3), Article 97 paragraph (2), Article 99 paragraph (2), and/or paragraph (3), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XIV
BANK STRATEGIC PLAN

Article 103
(1) Banks are required to formulate and submit strategic plans in the form of:
a. corporate plans; and b. business plans, with procedures in accordance with the Financial Services Authority Regulation regarding commercial banks, the Financial Services Authority Regulation regarding Islamic commercial banks, and the Financial Services Authority Regulation regarding bank business plans.

(2) Banks that violate the obligations as referred to in paragraph (1) shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding commercial banks, the Financial Services Authority Regulation regarding Islamic commercial banks, and the Financial Services Authority Regulation regarding bank business plans.

Article 104
(1) Banks are required to implement plans for handling financial problems and/or Bank capital strengthening as stated in the business plan as referred to in Article 103 paragraph (1) letter b.

(2) Banks inform the plan for handling financial problems and/or Bank capital strengthening to controlling shareholders.

(3) Controlling shareholders are required to be responsible for and support the strengthening, handling, and/or resolution of the Bank's financial problems and to maintain the continuity of the Bank's business.

(4) Banks and/or controlling shareholders that violate the provisions as referred to in paragraph (1) and/or paragraph (3), shall be subject to administrative sanctions in the form of written reprimands.

(5) In the event that Banks and/or controlling shareholders have been subject to administrative sanctions as referred to in paragraph (4), and continue to violate the provisions as referred to in paragraph (1) and/or paragraph (3), the Bank shall be subject to administrative sanctions in the form of:
a. a ban on issuing new Bank products; b. suspension of certain Bank business activities;
c. a ban on expanding business activities;
d. a ban on conducting new business activities; and/or e. a reduction in the corporate governance factor assessment in the Bank's health level assessment.

(6) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (4) and/or paragraph (5), the Bank's principal parties may be subject to administrative sanctions in the form of a ban as a principal party in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

Article 105
(1) Banks are required to formulate, submit, and implement plans to address potential financial problems that may occur in the Bank in accordance with the Financial Services Authority Regulation regarding recovery action plans (recovery plan).

(2) Banks that violate the provisions as referred to in paragraph (1), shall be subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding recovery action plans (recovery plan).

Article 106
In addition to the administrative sanctions as referred to in Article 103 paragraph (2), Article 104 paragraph (4), paragraph (5), and paragraph (6), and/or Article 105 paragraph (2), Banks and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XV
SHAREHOLDER ASPECTS

Article 107
(1) Controlling shareholders of Banks and the ultimate controlling shareholders of Banks are required to comply with Financial Services Authority Regulations and statutory regulations in the financial services sector, and support the implementation of business activities and healthy, competitive Bank management in accordance with prudential principles and risk management.

(2) Bank shareholders participate in supporting the implementation of healthy Bank business activities and maintaining the continuity of the Bank's business.

Article 108
(1) Banks are required to have dividend policies and communicate dividend policies to shareholders.

(2) Dividend policies as referred to in paragraph (1) shall at least contain:
a. the Bank's considerations in dividend distribution; b. the amount of dividends provided;
c. the approval mechanism for dividend distribution proposals; and
d. the period for updating dividend policies.

(3) The dividend policy referred to in paragraph (1) may contain:
a. the Bank's authority to propose to the General Meeting of Shareholders (GMS) regarding the postponement of dividend payments; b. the cessation of dividend payments that have been approved;
c. the cessation of installment dividend payments or the cessation of dividend payments in stages; and/or
d. the withdrawal of dividend payments to controlling shareholders, in the event the Bank experiences financial condition problems.

(4) The dividend distribution plan is based on the fulfillment of shareholders' rights, prioritizing the Bank's interests, and is included in the Bank's business plan.

(5) In determining dividend distribution to shareholders, the Bank must base its decision on various considerations from external and internal aspects.

(6) Dividend calculations must be based on the Bank's fair profitability performance.

(7) The Financial Services Authority (OJK) has the authority to instruct and/or order the Bank to:
a. postpone, limit, and/or prohibit the distribution of Bank dividends; and/or b. convene a GMS for cancellation regarding the Bank's dividend distribution.

(8) The authority of the Financial Services Authority (OJK) as referred to in paragraph (7) is carried out by considering:
a. external and internal aspects as referred to in paragraph (5); and/or b. the Bank's condition in efforts to strengthen the Bank's capital and/or handle Bank problems.

Article 109
(1) The Bank has policies and/or procedures to:
a. ensure fair treatment for all shareholders and protect shareholders' rights; and b. facilitate shareholder and Stakeholder participation and manage communication in its implementation.

(2) The Bank's corporate actions in the form of mergers, consolidations, takeovers, integrations, and other material transactions are carried out in accordance with applicable regulations and procedures, ensuring that transactions occur transparently and fairly and protect shareholders' rights and the Bank's interests.

Article 110
The action of releasing Bank shares owned by members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officials, and/or Bank employees originating from the management share ownership program and/or the employee share ownership program must be carried out by observing Good Corporate Governance in the Bank and considering the Bank's condition.

Article 111
(1) The Bank's capital participation activities in subsidiaries and investees must be carried out by observing Good Corporate Governance in the Bank and the application of risk management.

(2) The application of regulations regarding the Bank's capital participation and the imposition of administrative sanctions is carried out in accordance with the Financial Services Authority Regulation regarding capital participation activities by universal banks.

Article 112
(1) Banks that violate the provisions as referred to in Article 107 paragraph (1), Article 108 paragraph (1), paragraph (5), paragraph (6), and/or Article 110, are subject to administrative sanctions in the form of a written reprimand.

(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 107 paragraph (1), Article 108 paragraph (1), paragraph (5), paragraph (6), and/or Article 110, the Bank is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. freezing of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.

(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding the reassessment of principal parties of financial service institutions.

(4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), paragraph (3), and/or Article 111 paragraph (2), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XVI
IMPLEMENTATION OF ANTI-FRAUD STRATEGY

Article 113
(1) The Bank must apply risk management and internal control systems to minimize the occurrence of fraud.

(2) The Bank must formulate and apply an anti-fraud strategy, including applying an anti-bribery management system, and form a working unit or function tasked with handling the implementation of the anti-fraud strategy within the Bank's organization.

(3) The application of regulations regarding the implementation of anti-fraud strategies and the imposition of administrative sanctions regarding violations of the provisions as referred to in paragraph (1) and/or paragraph (2) is carried out in accordance with the Financial Services Authority Regulation regarding the implementation of anti-fraud strategies on universal banks.

Article 114
Controlling shareholders of the Bank must support the development of a healthy Bank and maintain the continuity of the Bank's business, at least by:
a. supporting and implementing efforts to strengthen the bank's capital; and b. not taking actions that could cause the Bank to be exposed to risk.

Article 115
(1) The Bank's written credit or financing policies must at least contain all aspects established in the guidelines for formulating the Bank's credit or financing policies.

(2) In the disbursement and approval of credit or financing, the Bank must avoid pressure from any party and ensure the implementation of the Bank's credit or financing policies and the application of risk management are carried out consistently and in accordance with applicable legislation.

(3) Credit or financing decisions must be based on the application of the principle of separation of functions (four eyes principle) between business and risk functions in accordance with the Financial Services Authority Regulation regarding the application of risk management for universal banks and the Financial Services Authority Regulation regarding the application of risk management for universal Sharia banks and Sharia business units.

(4) In the implementation of credit or financing write-offs, including other actions related to the settlement of credit or financing carried out by the Bank, the Bank must avoid pressure from any party and be carried out in accordance with the Bank's credit or financing policies, the application of risk management, and applicable legislation.

(5) Banks that violate the provisions as referred to in paragraph (1), paragraph (2), paragraph (3), and/or paragraph (4) are subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding the obligation to formulate and implement credit or financing policies for universal banks and/or the Financial Services Authority Regulation regarding the application of risk management for universal banks and the Financial Services Authority Regulation regarding the application of risk management for universal Sharia banks and Sharia business units.

Article 116
The procurement process for goods and/or services must be carried out by observing Good Corporate Governance in the Bank and with the principles of at least efficiency, effectiveness, transparency, openness, competitiveness, fairness, and accountability, regardless of conflicts of interest, the existence of separation of functions and authority in the procurement process, and adhering to the concept of best price.

Article 117
The implementation of the Bank's budgeting and expenditure must be carried out by observing Good Corporate Governance in the Bank and based on the Bank's needs.

Article 118
(1) The allocation and use of the Bank's social and environmental responsibility funds must be free from the personal interests of any party inside and outside the Bank.

(2) The allocation and use of the Bank's social and environmental responsibility funds as referred to in paragraph (1) must only be done to support the implementation of sustainable finance activities, and can provide added value for the Bank both directly and indirectly.

Article 119
Bank shareholders, members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officials, and/or Bank employees are prohibited from requesting, accepting, permitting, and/or approving to receive remuneration, commissions, additional money, services, money, valuable goods, and/or anything that has economic value or other benefits, for the benefit of themselves, their families, and other parties, in the implementation of the Bank's business activities and other activities related to the Bank.

Article 120
Members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officials, and/or Bank employees must reject and/or are prohibited from accepting orders or requests from Bank shareholders, affiliated parties, and/or other parties to:
a. take actions related to the Bank's business activities and/or other activities that are not in accordance with the application of Good Corporate Governance in the Bank; b. commit criminal acts and/or acts indicated as criminal acts; and/or
c. take actions and things that can harm, potentially harm, and/or reduce the Bank's profits.

Article 121
Bank shareholders, affiliated parties, and/or other parties are prohibited from requesting and/or ordering members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officials, and/or Bank employees to:
a. take actions related to the Bank's business activities and/or other activities that are not in accordance with the application of Good Corporate Governance in the Bank; b. commit criminal acts and/or acts indicated as criminal acts; and/or
c. take actions and things that can harm, potentially harm, and/or reduce the Bank's profits.

Article 122
(1) Banks that violate the provisions as referred to in Article 114, Article 116, Article 117, Article 118, Article 119, Article 120, and/or Article 121 are subject to administrative sanctions in the form of a written reprimand.

(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 114, Article 116, Article 117, Article 118, Article 119, Article 120, and/or Article 121, the Bank is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. freezing of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.

(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding the reassessment of principal parties of financial service institutions.

(4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), paragraph (3), Article 113 paragraph (3), and/or Article 115 paragraph (5), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

(5) The imposition of sanctions on Executive Officials and/or other parties besides the Bank's principal parties for violations as referred to in Article 119, Article 120, and/or Article 121 is also carried out in accordance with the Bank's internal policies and/or procedures.

CHAPTER XVII
IMPLEMENTATION OF SUSTAINABLE FINANCE

Article 123
(1) The Bank must apply sustainable finance in its business activities and formulate a sustainable finance action plan.

(2) The Bank must have and allocate part of its funds as social and environmental responsibility funds in support of sustainable finance implementation activities.

(3) The implementation of sustainable finance and the imposition of administrative sanctions regarding violations of the provisions as referred to in paragraph (1) and/or paragraph (2) is carried out in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.

Article 124
The Bank must implement business practices and investment strategies by observing, applying, and integrating environmental, social, and governance values in support of at least:
a. a sustainable business ecosystem; b. product development;
c. transactions;
d. financing services for sustainable activities and transition financing; e. the development of sustainable finance programs and the implementation of environmentally conscious bank operational activities; and f. social and community empowerment, in the implementation of sustainable finance.

Article 125
(1) The Bank must apply Good Corporate Governance in the Bank in managing climate-related risks.

(2) In managing climate-related risks as referred to in paragraph (1), the Bank must at least:
a. develop and implement processes to understand and assess the potential impact of climate-related risks on the Bank's business and consider these risks in business strategies and risk management frameworks; b. establish roles and responsibilities of the Board of Directors, Board of Commissioners, and working units in the Bank according to the organizational structure, coordination mechanisms in managing climate-related risks, and effective supervision implementation;
c. have appropriate policies, procedures, and controls for effective climate-related risk management; and
d. consider climate-related risks in the internal control framework through 3 (three) lines of defense to ensure that the identification, measurement, and mitigation of climate-related risks are carried out accurately, comprehensively, and effectively.

Article 126
(1) Banks that violate the provisions as referred to in Article 124, and/or Article 125 paragraph (1), are subject to administrative sanctions in the form of a written reprimand.

(2) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 124, and/or Article 125 paragraph (1), the Bank is subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. freezing of certain Bank business activities;
c. prohibition on expanding business activities;
d. prohibition on conducting new business activities; and/or e. reduction of the corporate governance factor assessment in the Bank's health level assessment.

(3) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Bank's principal parties may be subject to administrative sanctions in the form of prohibition as a principal party in accordance with the Financial Services Authority Regulation regarding the reassessment of principal parties of financial service institutions.

(4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), paragraph (3), and/or Article 123 paragraph (3), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XVIII
CORPORATE GOVERNANCE IN BANK BUSINESS GROUPS

Article 127
(1) The Bank as the parent company or parent company executor in the bank business group must conduct regular coordination and evaluation regarding the implementation of Good Corporate Governance in the Bank by Bank members of the bank business group.

(2) Regular coordination and evaluation as referred to in paragraph (1) is carried out at least 1 (one) time in 1 (one) year.

Article 128
(1) The Bank which is a member of the bank business group may conduct banking synergy in the form of committee support from the Bank as the parent company or parent company executor.

(2) Banking synergy in the form of committee support from the parent company Bank or parent company executor as referred to in paragraph (1) is carried out in accordance with applicable legislation.

(3) Bank members of the bank business group utilizing committees owned by the Bank as the parent company or parent company executor must include at least 1 (one) employee at least at the level of Executive Official who is relevant, in every decision-making related to the Bank which is a member of the respective bank business group.

(4) The implementation of committee support synergy is supplemented by a cooperation agreement in accordance with the Financial Services Authority Regulation regarding universal banks or the Financial Services Authority Regulation regarding universal Sharia banks.

Article 129
(1) Banks that violate the provisions as referred to in Article 127 paragraph (1) and/or Article 128 paragraph (3) are subject to administrative sanctions in accordance with the Financial Services Authority Regulation regarding universal banks or the Financial Services Authority Regulation regarding universal Sharia banks.

(2) In addition to administrative sanctions as referred to in paragraph (1), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of fines of at least IDR 2,000,000,000.00 (two billion rupiah) and at most IDR 50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XIX
REPORT ON THE IMPLEMENTATION OF CORPORATE GOVERNANCE AND ASSESSMENT OF THE IMPLEMENTATION OF CORPORATE GOVERNANCE

First Section
Report on the Implementation of Corporate Governance

Article 130
(1) The Bank must formulate a report on the implementation of corporate governance at the end of each fiscal year.

(2) Further provisions regarding the scope and procedures for formulating the report on the implementation of corporate governance as referred to in paragraph (1) are established by the Financial Services Authority.

Article 131
(1) The Bank must submit the report on the implementation of corporate governance as referred to in Article 130 to the Financial Services Authority and the Bank's controlling shareholders at the latest 4 (four) months after the end of the fiscal year.

(2) The report on the implementation of corporate governance as referred to in paragraph (1) must be published on the Bank's website at the latest 4 (four) months after the end of the fiscal year.

(3) The Bank is declared late in submitting the report on the implementation of corporate governance and/or publishing the report on the implementation of corporate governance on the Bank's website if the Bank submits and/or publishes the report on the implementation of corporate governance beyond the deadline for submission of the report as referred to in paragraph (1) and/or the deadline for publication on the Bank's website as referred to in paragraph (2), but has not exceeded 1 (one) month since the deadline for submission of the report on the implementation of corporate governance as referred to in paragraph (1).

(4) The Bank is declared not to have submitted the report on the implementation of corporate governance and/or publishing the report on the implementation of corporate governance on the Bank's website if the Bank has not submitted and/or published the report on the implementation of corporate governance within the delay period as referred to in paragraph (3).

Second Section
Self-Assessment by the Bank on the Implementation of Good Corporate Governance in the Bank

Article 132
(1) The Bank must conduct a self-assessment on the implementation of Good Corporate Governance in the Bank at least 2 (two) times in 1 (one) year.

(2) The results of the self-assessment by the Bank on the implementation of Good Corporate Governance in the Bank as referred to in paragraph (1) are an inseparable part of the report on the implementation of corporate governance.

(3) Further provisions regarding the self-assessment on the implementation of Good Corporate Governance in the Bank as referred to in paragraph (1) are established by the Financial Services Authority.

Article 133
(1) In conducting an assessment on the implementation of Good Corporate Governance in the Bank as referred to in Article 4, the Financial Services Authority conducts an assessment or evaluation of the results of the self-assessment by the Bank on the implementation of corporate governance as referred to in Article 132 paragraph (1).

(2) Based on the results of the self-assessment by the Bank or evaluation as referred to in paragraph (1), the Financial Services Authority may request the Bank to submit an action plan containing improvement steps that must be implemented by the Bank with a specific target time.

(3) If necessary, the Financial Services Authority may:
a. request the Bank to adjust the action plan as referred to in paragraph (2); and/or b. conduct a special examination of the results of the improvement of corporate governance implementation that has been carried out by the Bank.

(4) The Bank must follow up on the request for adjustment of the action plan as referred to in paragraph (3) letter a and the results of the special examination that still requires improvement by the Bank as referred to in paragraph (3) letter b.

Third Section
Submission of Reports

Article 134
(1) The submission of the report on the implementation of corporate governance to the Financial Services Authority as referred to in Article 131 paragraph (1) is addressed to:
a. the Department of Supervision for the Relevant Bank or the Regional Office of the Financial Services Authority in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province or Banten Province; or b. the Regional Office of the Financial Services Authority or the Local Office of the Financial Services Authority, for Banks headquartered outside the Special Capital Region of Jakarta Province or Banten Province, which is submitted online through the Financial Services Authority reporting system with procedures in accordance with the Financial Services Authority Regulation regarding the reporting of universal banks through the Financial Services Authority reporting system.

(2) In the event that the Financial Services Authority reporting system is not available or there is a force majeure situation, submission is carried out through the Financial Services Authority letter system.

(3) In the event that the Financial Services Authority letter system as referred to in paragraph (2) has a force majeure situation, submission is carried out offline to the Financial Services Authority.

Fourth Section
Sanctions

Article 135
(1) Banks that violate the provisions as referred to in Article 130 paragraph (1), Article 131 paragraph (1), paragraph (2), Article 132 paragraph (1), and/or Article 133 paragraph (2), paragraph (4) are subject to administrative sanctions in the form of a written reprimand.

(2) Banks that are late in fulfilling the obligation to submit and publish the report on the implementation of corporate governance as referred to in Article 131 paragraph (1),

paragraph (2), subject to administrative sanctions in the form of a fine of Rp1,000,000.00 (one million rupiah) per working day and at most Rp30,000,000.00 (thirty million rupiah).
(3) Banks that have been subject to administrative sanctions in the form of a fine as referred to in paragraph (2) remain obligated to submit reports on the implementation of governance to the Financial Services Authority. (4) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), and continues to violate the provisions as referred to in Article 130 paragraph (1), Article 131 paragraph (1), paragraph (2), Article 132 paragraph (1), Article 133 paragraph (2), paragraph (4), and/or paragraph (3), the Bank shall be subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on carrying out business expansion;
d. prohibition on carrying out new business activities; and/or e. reduction of the governance factor assessment in the Bank's health level assessment.
(5) In the event that a Bank has been subject to administrative sanctions as referred to in paragraph (1), paragraph (2), and/or paragraph (4), the Bank's key parties may be subject to administrative sanctions in the form of prohibition from serving as key parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for key parties of financial service institutions. (6) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), paragraph (4), and/or paragraph (5), the Bank and/or controlling shareholders may be subject to administrative sanctions in the form of a fine of at least Rp2,000,000,000.00 (two billion rupiah) and at most Rp50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XX
IMPLEMENTATION OF GOOD GOVERNANCE ON BANKS FOR KCBLN

Article 136
KCBLN is required to adjust the provisions on the implementation of Good Governance on Banks to Banks in the form of limited liability companies, except as specifically regulated in this Financial Services Authority Regulation regarding:
a. the implementation of the functions of the Board of Directors and Board of Commissioners and the formation of committees adjusted to the organization applicable to KCBLN; and b. adjustments are made by meeting all the scope required in the implementation of Good Governance on Banks.

Article 137
(1) The Board of Directors on KCBLN is prohibited from holding concurrent positions as members of the Board of Directors, members of the Board of Commissioners, or Executive Officials on:
a. Banks; b. banks and/or other KCBLN outside Indonesia;
c. companies and/or other institutions inside and/or outside the country;
d. in functional task fields on banking financial institutions and/or non-banking financial institutions located inside and/or outside the country; and/or e. in other positions that may cause conflicts of interest in the implementation of duties as members of the Board of Directors. (2) Concurrent positions as referred to in paragraph (1) do not apply in the event that members of the Board of Directors on KCBLN:
a. carry out duties as alternate directors as referred to in Article 14 paragraph (1) letter b; and/or b. hold positions in non-profit organizations or institutions, provided that this does not cause the respective person to neglect the implementation of duties and responsibilities as members of the Board of Directors on KCBLN.

Article 138
(1) KCBLN that violates the provisions as referred to in Article 136 and/or Article 137 paragraph (1) shall be subject to administrative sanctions in the form of a written reprimand.
(2) In the event that KCBLN has been subject to administrative sanctions as referred to in paragraph (1), and continues to violate the provisions as referred to in Article 136 and/or Article 137 paragraph (1), KCBLN shall be subject to administrative sanctions in the form of:
a. prohibition on issuing new Bank products; b. suspension of certain Bank business activities;
c. prohibition on carrying out business expansion;
d. prohibition on carrying out new business activities; and/or e. reduction of the governance factor assessment in the Bank's health level assessment (3) In the event that KCBLN has been subject to administrative sanctions as referred to in paragraph (1) and/or paragraph (2), the Board of Directors and/or Executive Officials on KCBLN may be subject to administrative sanctions in the form of prohibition from serving as key parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for key parties of financial service institutions. (4) In addition to administrative sanctions as referred to in paragraph (1), paragraph (2), and/or paragraph (3), KCBLN may be subject to administrative sanctions in the form of a fine of at least Rp2,000,000,000.00 (two billion rupiah) and at most Rp50,000,000,000.00 (fifty billion rupiah) for each violation committed.

CHAPTER XXI
OTHER PROVISIONS

Article 139
(1) The appointment of members of the Board of Directors and/or members of the Board of Commissioners who come from employees or officials at institutions that perform regulatory and/or supervisory functions for Banks and/or other financial service institutions is carried out after the respective person has effectively ceased to be an employee or official and has served a waiting period of at least 6 (six) months. (2) In the event that there is a conflict of interest or potential conflict of interest from employees or officials who are candidates for members of the Board of Directors and/or candidates for members of the Board of Commissioners as referred to in paragraph (1) in connection with the respective person's nomination at the Bank, the respective candidate discloses the conflict of interest in the process of assessing competence and propriety. (3) In the event that based on the assessment of the Financial Services Authority there is a conflict of interest or potential conflict of interest from employees or officials who are candidates for members of the Board of Directors and/or candidates for members of the Board of Commissioners as referred to in paragraph (1) in connection with the respective person's nomination at the Bank, the Financial Services Authority has the authority to determine the necessary supervisory actions.

CHAPTER XXII
TRANSITIONAL PROVISIONS

Article 140
The process of assessing the competence and propriety of Independent Commissioners who have been submitted to the Financial Services Authority before the implementation of this Financial Services Authority Regulation shall be carried out in accordance with the Financial Services Authority Regulation regarding the assessment of competence and propriety for financial service institutions.

CHAPTER XXIII
CLOSING PROVISIONS

Article 141
At the time this Financial Services Authority Regulation comes into force:
a. Bank Indonesia Regulation Number 11/33/PBI/2009 concerning the Implementation of Good Corporate Governance for Islamic Commercial Banks and Sharia Business Units (State Gazette of the Republic of Indonesia Year 2009 Number 175, Supplement to the State Gazette of the Republic of Indonesia Number 5085); b. Financial Services Authority Regulation Number 45/POJK.03/2015 concerning the Implementation of Governance in the Provision of Remuneration for Commercial Banks (State Gazette of the Republic of Indonesia Year 2015 Number 371, Supplement to the State Gazette of the Republic of Indonesia Number 5811);
c. Financial Services Authority Regulation Number 5/POJK.03/2016 concerning Bank Business Plans (State Gazette of the Republic of Indonesia Year 2016 Number 17, Supplement to the State Gazette of the Republic of Indonesia Number 5841);
d. Financial Services Authority Regulation Number 18/POJK.03/2016 concerning the Implementation of Risk Management for Commercial Banks (State Gazette of the Republic of Indonesia Year 2016 Number 53, Supplement to the State Gazette of the Republic of Indonesia Number 5861); e. Financial Services Authority Regulation Number 65/POJK.03/2016 concerning the Implementation of Risk Management for Islamic Commercial Banks and Sharia Business Units (State Gazette of the Republic of Indonesia Year 2016 Number 298, Supplement to the State Gazette of the Republic of Indonesia Number 5988); f. Financial Services Authority Regulation Number 42/POJK.03/2017 concerning the Obligation to Prepare and Implement Credit or Financing Policies for Banks for Commercial Banks (State Gazette of the Republic of Indonesia Year 2017 Number 148, Supplement to the State Gazette of the Republic of Indonesia Number 6091); g. Financial Services Authority Regulation Number 46/POJK.03/2017 concerning the Implementation of Compliance Functions for Commercial Banks (State Gazette of the Republic of Indonesia Year 2017 Number 152, Supplement to the State Gazette of the Republic of Indonesia Number 6095); h. Financial Services Authority Regulation Number 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Service Institutions, Issuers, and Public Companies (State Gazette of the Republic of Indonesia Year 2017 Number 169, Supplement to the State Gazette of the Republic of Indonesia Number 6103);
i. Financial Services Authority Regulation Number 59/POJK.03/2017 concerning the Implementation of Governance in the Provision of Remuneration for Islamic Commercial Banks and Sharia Business Units (State Gazette of the Republic of Indonesia Year 2017 Number 278, Supplement to the State Gazette of the Republic of Indonesia Number 6148);
j. Financial Services Authority Regulation Number 32/POJK.03/2018 concerning Maximum Limits for Credit Provision and Large Fund Provision for Commercial Banks (State Gazette of the Republic of Indonesia Year 2018 Number 253, Supplement to the State Gazette of the Republic of Indonesia Number 6283) as amended by Financial Services Authority Regulation Number 38/POJK.03/2019 concerning Amendments to Financial Services Authority Regulation Number 32/POJK.03/2018 concerning Maximum Limits for Credit Provision and Large Fund Provision for Commercial Banks (State Gazette of the Republic of Indonesia Year 2019 Number 245, Supplement to the State Gazette of the Republic of Indonesia Number 6438); k. Financial Services Authority Regulation Number 1/POJK.03/2019 concerning the Implementation of Internal Audit Functions on Commercial Banks (State Gazette of the Republic of Indonesia Year 2019 Number 20, Supplement to the State Gazette of the Republic of Indonesia Number 6308);
l. Financial Services Authority Regulation Number 37/POJK.03/2019 concerning Transparency and Publication of Bank Reports (State Gazette of the Republic of Indonesia Year 2019 Number 248, Supplement to the State Gazette of the Republic of Indonesia Number 6441);
m. Financial Services Authority Regulation Number 39/POJK.03/2019 concerning the Implementation of Anti-Fraud Strategies for Commercial Banks (State Gazette of the Republic of Indonesia Year 2019 Number 246, Supplement to the State Gazette of the Republic of Indonesia Number 6439); n. Financial Services Authority Regulation Number 12/POJK.03/2021 concerning Commercial Banks (State Gazette of the Republic of Indonesia Year 2021 Number 163, Supplement to the State Gazette of the Republic of Indonesia Number 6700); o. Financial Services Authority Regulation Number 26/POJK.03/2021 concerning Maximum Limits for Fund Disbursement and Large Fund Disbursement for Islamic Commercial Banks (State Gazette of the Republic of Indonesia Year 2021 Number 277, Supplement to the State Gazette of the Republic of Indonesia Number 6746); p. Financial Services Authority Regulation Number 11/POJK.03/2022 concerning the Provision of Information Technology by Commercial Banks (State Gazette of the Republic of Indonesia Year 2022 Number 5/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 5/OJK); q. Financial Services Authority Regulation Number 16/POJK.03/2022 concerning Islamic Commercial Banks (State Gazette of the Republic of Indonesia Year 2022 Number 19/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 11/OJK); r. Financial Services Authority Regulation Number 12 of 2023 concerning Sharia Business Units (State Gazette of the Republic of Indonesia Year 2023 Number 20/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 45/OJK); and s. implementation provisions of Financial Services Authority Regulation Number 55/POJK.03/2016 concerning the Implementation of Governance for Commercial Banks (State Gazette of the Republic of Indonesia Year 2016 Number 286, Supplement to the State Gazette of the Republic of Indonesia Number 5980) and Bank Indonesia Regulation Number 11/33/PBI/2009 concerning the Implementation of Good Corporate Governance for Islamic Commercial Banks and Sharia Business Units (State Gazette of the Republic of Indonesia Year 2009 Number 175, Supplement to the State Gazette of the Republic of Indonesia Number 5085), are declared to remain in force insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 142
At the time this Financial Services Authority Regulation comes into force, Financial Services Authority Regulation Number 55/POJK.03/2016 concerning the Implementation of Governance for Commercial Banks (State Gazette of the Republic of Indonesia Year 2016 Number 286, Supplement to the State Gazette of the Republic of Indonesia Number 5980) is repealed and declared invalid.

Article 143
This Financial Services Authority Regulation comes into force on the date of its promulgation.

This copy is in accordance with the original
Director of Law 1
Legal Department signed
Mufli Asmawidjaja

In order that everyone may know it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Determined in Jakarta on 14 September 2023
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,
MAHENDRA SIREGAR

Promulgated in Jakarta on 14 September 2023
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2023 NUMBER 30/OJK signed signed

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 17 OF 2023
CONCERNING
THE IMPLEMENTATION OF GOVERNANCE FOR COMMERCIAL BANKS

I. GENERAL
The role of banking, which is one of the important aspects of the financial services sector, needs to be continuously supported and strengthened. Banking is also required to remain competitive and responsive to changes in the increasingly complex and competitive external and internal environments, accompanied by increasingly broad challenges. The strengthening of the implementation of Good Governance on Banks is one of the main elements to enhance the competitiveness of banking. Good Governance on Banks will have a positive impact on Bank performance. Along with the development of financial activities and products as well as the adoption of information technology developments, the framework of Good Governance regulations on Banks and the support of effective risk management implementation also need to be continuously refined, to ensure that emerging risks can be anticipated effectively and to ensure that Banks are supported by reliable governance implementation and the execution of healthy business practices. Experience shows that failures in the implementation of Good Governance on Banks are often one of the main causes of Bank failures to survive in business competition, and massive-scale Bank failures can cause crises in the banking sector and the economy. In this regard, Banks are continuously required to operate with the implementation of reliable and integrated governance, risk, and compliance (GRC), supported by digitalization and technological innovation, and with environmental and social awareness (ESG), so that Banks are able to meet legal regulations, standards, ethical values, principles, and common practices, maintain and build the foundation for value creation, and optimize sustainable performance achievements, manage rights and responsibilities, and maintain the balance of interests of shareholders and all other stakeholders in efforts to contribute more broadly to driving the national economy.

In the OJK regulatory framework, there is a need for harmony and synergy in regulations regarding the implementation of Good Governance on Banks, including the implementation of governance regulated in a separate OJK regulation, and referring to applicable legal regulations, including provisions on banking (conventional commercial banks and Islamic commercial banks) and provisions on the development and strengthening of the financial sector. Therefore, this Financial Services Authority Regulation also serves as the regulatory umbrella regarding the implementation of governance for Banks. Thus, the implementation of Good Governance on Banks in every business activity and lines of defense of Banks is expected to provide a positive contribution in supporting the strengthening and competitiveness of Banks, as well as supporting inclusive and sustainable national economic growth, thereby realizing a prosperous, advanced, and dignified society. In this regard, to support the strengthening of regulations regarding Good Governance on Banks, it is necessary to update the regulations regarding the Implementation of Governance for Commercial Banks.

II. ARTICLE BY ARTICLE

Article 1
Sufficiently clear.

Article 2
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Letter a
Sufficiently clear.
Letter b
Other activities carried out by Banks include the procurement of goods and/or services, employee recruitment processes, and/or the disbursement of social and environmental responsibility funds. Paragraph (3) Letter a Transparency includes openness in the decision-making process and openness in the disclosure and provision of relevant and easily accessible information by Stakeholders. Letter b Accountability includes clarity of functions and the execution of accountability. Letter c Responsibility includes the suitability of management with legal regulations and ethical values as well as standards, principles, and practices. Letter d Independency includes a state managed independently and professionally and free from conflicts of interest and influence or pressure from any party that does not comply with legal regulations and ethical values as well as standards, principles, and practices. Letter e Fairness includes equality, balance, and justice in fulfilling the rights of Stakeholders arising from agreements, legal regulations, and ethical values as well as standards, principles, and practices. Paragraph (4) Letter a Sufficiently clear. Letter b Sufficiently clear. Letter c Sufficiently clear. Letter d The term "conflict of interest" refers to the difference between the economic interests of the Bank and the personal economic interests of shareholders, members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officials, Bank employees, and/or related parties to the Bank. Letter e Sufficiently clear. Letter f Sufficiently clear. Letter g Sufficiently clear. Letter h Sufficiently clear. Letter i Sufficiently clear. Letter j Sufficiently clear. Letter k Sufficiently clear. Letter l Sufficiently clear. Letter m Sufficiently clear. Letter n Sufficiently clear. Letter o Sufficiently clear. Letter p Sufficiently clear. Paragraph (5) Sufficiently clear.

Article 3
Bank internal procedures include articles of association, decrees, manuals, policies or guidelines (standard operating procedure), corporate charters, and other Bank operational documents, which are prepared in accordance with applicable legal regulations and in accordance with business processes and approval mechanisms at the Bank.

Article 4
Sufficiently clear.

Article 5
Sufficiently clear.

Article 6
Paragraph (1)
The fulfillment of Board of Directors members exceeding 3 (three) people considers the complexity and/or scale of the Bank's business.
Paragraph (2)
The domicile of Board of Directors members considers the efficiency and effectiveness of the implementation of duties and responsibilities of the respective Board of Directors members, including location factors. Paragraph (3) The term "majority" refers to more than 50% (fifty percent). Bank executive officials are not included as executive officials in people's economy banks and Islamic people's economy banks. Paragraph (4) Other conditions include when Board of Directors members whose term has expired have not had their replacements determined by the General Meeting of Shareholders (GMS), the respective person may still exercise the same authorities until their replacement is determined by the GMS.

Article 7
Paragraph (1)
Banks may use other job titles for the chief director, such as president director.
Paragraph (2)
Banks may use other job titles for the deputy chief director, such as deputy president director.
Paragraph (3)
The term "controlling shareholder" refers to controlling shareholders including ultimate controlling shareholders in accordance with the Financial Services Authority Regulation regarding the assessment of competence and propriety for key parties of financial service institutions. Independence assessment is based on the respective person's connections in management, ownership, and/or financial relationships, as well as family relationships with controlling shareholders.

Article 8
Sufficiently clear.

Article 9
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Considering diversity including career backgrounds, experience, educational history, and gender.
Paragraph (3)
The determination aims to ensure that the Bank's management is carried out well.

Article 10
Paragraph (1)
The dismissal of Board of Directors members includes the temporary dismissal of Board of Directors members.
The restriction of authorities of temporarily dismissed Board of Directors members is carried out in accordance with legal regulations.
Paragraph (2)
Letter a
Sufficiently clear.
Letter b
Objective assessments related to Bank management include aspects of performance, integrity, financial reputation, and/or competence.
Letter c
Sufficiently clear.
Letter d
Sufficiently clear.
Letter e
Sufficiently clear.
Letter f
Sufficiently clear.
Paragraph (3)
Sufficiently clear.

Article 11
Sufficiently clear.

Article 12
Paragraph (1)
The procedure for the resignation of Board of Directors members is in accordance with legal regulations and is stated in the Bank's articles of association.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
The term "other conditions" refers to the resignation of Board of Directors members intended to release responsibility as Board of Directors members in handling Bank problems.

Article 13
Sufficiently clear.

Article 14
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
Alternate directors (acting members of the Board of Directors or plt) are Board of Directors members designated to concurrently carry out the task fields of other Board of Directors members who cannot perform their duties (including permanent absence (resignation, dismissal, or death) or temporary absence (leave, official duty, illness, or other causes)), to maintain the smoothness of duties and functions of the Board of Directors. Letter c Alternate directors cannot perform their duties in connection with leave, official duty, illness, or other causes that cause temporary absence, including permanent absence. Paragraph (2) Examples of the transfer of task fields among Board of Directors members include transferring the assignment of a director overseeing consumer business to a director overseeing finance. The transfer of task fields among Board of Directors members considers the respective person's competence in the new task field. Paragraph (3) Sufficiently clear. Paragraph (4) Compliance with legal regulations includes, among others, the authority of the Board of Commissioners to take management actions as the Board of Directors for a certain period. Paragraph (5) Sufficiently clear. Paragraph (6) Certain considerations include the Bank's decision to streamline or optimize the composition of Board of Directors positions.

Article 15
Paragraph (1)
Letter a
The term "bank" refers to Banks, people's economy banks, Islamic people's economy banks, and other banks outside the country.
Letter b
Examples of functional task fields include advisors, expert staff, and/or expert personnel.
Letter c
Sufficiently clear.
Letter d
Sufficiently clear.
Paragraph (2)
Letter a
The term "non-bank subsidiary company controlled by the Bank" refers to Bank subsidiary companies that do not carry out banking business activities.
Letter b
Sufficiently clear.
Letter c
Sufficiently clear.

Letter d
Non-profit organizations, including membership in committees (task forces) in specific fields outside the Bank.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Article 16
Paragraph (1)
What is meant by "other companies" includes, among others, companies other than the relevant Bank, such as banking financial institutions, non-banking financial institutions, or other companies.

Paragraph (2)
The accumulation of share ownership by members of the Board of Directors resulting from the granting of bonuses and/or profit shares is proven by a General Meeting of Shareholders (GMS) decision and/or other documents establishing such matters.

Paragraph (3)
Share ownership originating from the granting of bonuses, profit shares, management share ownership programs, and/or employee share ownership programs is proven by a GMS decision and/or other documents establishing such matters.

Article 17
What is meant by "majority" see the explanation of Article 6 paragraph (3).
What is meant by "family relationship up to the second degree" includes both vertical and horizontal relationships covering:
a. biological/step/adoptive parents; b. biological/step/adoptive siblings together with their husbands or wives;
c. biological/step/adoptive children;
d. biological/step/adoptive grandparents; e. biological/step/adoptive grandchildren; f. biological/step/adoptive siblings of parents together with their husbands or wives; g. husbands or wives; h. parents-in-law;
i. siblings-in-law;
j. husbands or wives of biological/step/adoptive children; k. grandparents of husbands or wives;
l. husbands or wives of biological/step/adoptive grandchildren; and/or
m. biological/step/adoptive siblings of husbands or wives together with their husbands or wives.

Article 18
What is meant by "other parties" is Bank employees or other persons.

Article 19
Paragraph (1)
Approval of the Financial Services Authority (OJK) in accordance with OJK Regulations regarding the assessment of fitness and propriety for principal parties of financial service institutions.

Paragraph (2)
Letter a
Possess integrity, including:

having good character and morality;
having a commitment to comply with laws and regulations, including Bank regulations and supporting OJK policies;
having a commitment to the development of healthy Bank business activities;
not undergoing the consequences of the final result of a re-assessment of principal parties with a "fail" rating and/or not being included in the list of failed parties; and
being competent to perform legal acts.

Letter b
Possess competence, including:

having adequate knowledge and/or competence (expertise) in the field needed for Bank management and relevant to their position;
conducting strategic management in the development of a healthy Bank, including:
a) exercising leadership roles in achieving sustainable value creation through the following efforts:

being competitive and visionary, demonstrated by having a commitment to long-term performance;
having an ethical and responsible attitude in conducting Bank business, operations, and services;
contributing to society and the environment; and
having the ability to adapt, survive, and grow;
b) managing and executing the Bank's strategic plan (long-term, medium-term, and short-term) with innovation and the use of the latest information technology effectively, competitively, and prioritizing the principle of prudence; c) executing and leading the application of risk management and internal control systems effectively and efficiently, aligned with the Bank's vision, mission, and strategy, and complying with applicable laws and regulations and standards; d) supporting and implementing the development of the Bank's human resource quality; e) ensuring accountability and integrity of the financial system and reporting, including sustainable financial reporting, accurately and timely in accordance with applicable regulations and standards; and f) ensuring support for the authority and supporting devices of the Sharia Supervisory Board so that it can carry out its duties effectively; and

having knowledge about Indonesia, particularly regarding the economy, culture, and Indonesian language, for Board of Directors members who are foreign workers in accordance with OJK Regulations regarding the utilization of foreign workers and knowledge transfer programs in the banking sector.

Letter c
Possess a good reputation, including:

not having non-performing loans and/or financing;
never having been declared bankrupt;
never having been a member of the Board of Directors and/or Board of Commissioners who were declared guilty for causing a company to be declared bankrupt;
never having been punished for committing criminal acts that harm state finances and/or are related to the financial sector;
holding annual General Meetings of Shareholders (GMS);
their accountability as members of the Board of Directors and/or Board of Commissioners is always accepted by the GMS or always provides accountability as members of the Board of Directors and/or Board of Commissioners to the GMS;
never having caused a company that has obtained a license, approval, or registration from the Financial Services Authority to fail to fulfill the obligation to submit annual reports and/or financial reports to the Financial Services Authority, and/or annual reports and/or financial reports not approved and/or certified by the GMS;
supporting the implementation of healthy Bank management; and
maintaining the Bank's reputation.

Article 20
Clear enough.

Article 21
Governance, risk management, and compliance are known by the term GRC or governance, risk, and compliance.

Article 22
Paragraph (1)
Letter a
What is meant by "internal audit unit" is the internal audit unit in accordance with OJK Regulations regarding the implementation of the internal audit function in commercial banks.

Letter b
What is meant by "risk management unit" is the risk management unit in accordance with OJK Regulations regarding the implementation of risk management for commercial banks and OJK Regulations regarding the implementation of risk management for Sharia commercial banks and Sharia business units.

Letter c
What is meant by "compliance unit" is the compliance unit in accordance with OJK Regulations regarding the implementation of the compliance function in commercial banks.

Paragraph (2)
Clear enough.

Article 23
Authorities and other institutions, including payment system supervisory authorities, deposit insurance and resolution authorities, supervisory authorities over the Parent Bank, as well as authorities and other institutions authorized to conduct audits of the Bank.

Article 24
Clear enough.

Article 25
Clear enough.

Article 26
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
Included in the category of special projects include, among others, information technology projects or public relations development projects that have criteria such as specific time targets.

Letter b
Clear work contracts must at least cover the scope of work, rights and responsibilities, duration of work, and costs.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Clear enough.

Article 27
Data and information management related to the Bank, including Bank secrecy, information exchange between banks, and information openness, while still paying attention to consumer protection aspects.

Letter a
Accurate, relevant, and timely data and information are required in relation to the duties and responsibilities of the Board of Commissioners to supervise the implementation of the duties and responsibilities of the Board of Directors and to control the implementation of Bank policies.

Letter b
Clear enough.

Article 28
Paragraph (1)
Guidelines and rules of work for the Board of Directors are also known as the Board of Directors Charter.

Paragraph (2)
Letter a
Division of tasks for the Board of Directors includes the mechanism for substitute directors.

Letter b
Clear enough.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Meeting arrangements include, among others, regulations regarding meeting agendas, quorum requirements, decision-making, members' rights in the event of differing opinions in decision-making, and meeting minutes.

Letter f
Clear enough.

Letter g
Clear enough.

Letter h
The working relationship pattern between the Board of Directors and the Board of Commissioners includes, among others, meetings between the Board of Directors and the Board of Commissioners.

Article 29
Clear enough.

Article 30
Paragraph (1)
Clear enough.

Paragraph (2)
What is meant by "joint meeting of the Board of Directors and Board of Commissioners" is a meeting of the Board of Directors together with the Board of Commissioners, among others, for the Board of Directors to request guidance or instructions, or to report the course of Bank management to the Board of Commissioners.

Paragraph (3)
What is meant by "majority" see the explanation of Article 6 paragraph (3).

Article 31
Paragraph (1)
What is meant by "strategic policies and decisions" are Board of Directors decisions that can significantly affect the Bank's finances and/or have a continuous impact on the budget, human resources, organizational structure, and/or third parties.

What is meant by "paying attention to supervision according to the duties and responsibilities of the Board of Commissioners" is the participation of the Board of Commissioners in decision-making limited to:
a. providing funds to related parties as regulated in OJK Regulations regarding maximum limits for credit provision and fund provision for commercial banks and OJK Regulations regarding maximum limits for fund distribution and large fund distribution for Sharia commercial banks; and b. other matters established in the Bank's Articles of Association or laws and regulations.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.

Article 32
Letter a
Other companies include controlling shareholders and/or ultimate controlling shareholders of the Bank.

Letter b
What is meant by "financial relationship" is a person who receives income, financial assistance, or loans from:

members of the Board of Directors and/or Board of Commissioners of the Bank;
companies whose controlling shareholders are members of the Board of Directors and/or Board of Commissioners of the Bank; and/or
controlling shareholders and/or ultimate controlling shareholders of the Bank.

Letter c
What is meant by "family relationship up to the second degree" see the explanation of Article 17.

Article 33
Paragraph (1)
Clear enough.

Paragraph (2)
Not included in the definition of personal profit includes, among others, members of the Board of Directors as Bank customers receiving reasonable interest income or remuneration.

Paragraph (3)
Clear enough.

Article 34
Clear enough.

Article 35
Paragraph (1)
Fulfillment of Board of Commissioners members exceeding 3 (three) people considers the complexity and/or scale of the Bank's business.

Paragraph (2)
Clear enough.

Paragraph (3)
Other conditions include when members of the Board of Commissioners whose term has expired have not had their replacements established by the GMS, the relevant person may still carry out their same authorities until their replacement is established by the GMS.

Article 36
Paragraph (1)
Banks may use other job titles from the Lead Commissioner, for example, President Commissioner.

Paragraph (2)
Banks may use other job titles from the Deputy Lead Commissioner, for example, Vice President Commissioner.

Article 37
Clear enough.

Article 38
Paragraph (1)
The existence of Independent Commissioners is intended to encourage the creation of a more objective working climate and environment and place fairness and equality among various interests, including the interests of minority shareholders and Stakeholders.

Paragraph (2)
Example: if the number of Board of Commissioners members is 3 (three), the number of Independent Commissioners is at least 2 (two). This regulation does not prohibit all members of the Board of Commissioners from consisting of Independent Commissioners.

Paragraph (3)
Knowledge in the banking field and experience in the banking and/or financial fields in accordance with OJK Regulations regarding the assessment of fitness and propriety for financial service institutions.

Paragraph (4)
Parties that have a relationship with the Bank that can influence the relevant person's ability to act independently are parties that have a contractual relationship with the Bank, so the waiting period starts from the end of the contractual relationship. What is meant by "waiting period" or cooling off is the interval between the time the relevant person's position as a member of the Board of Directors or Executive Officer or other relationship with the Bank effectively ends, and the time the relevant person is effectively appointed as an Independent Commissioner at the relevant Bank. Thus, the waiting period is implemented outside the relevant Bank.

Paragraph (5)
Examples of Board of Directors members who oversee functions include directors who oversee the compliance function or directors who oversee the risk management function.
Examples of Executive Officers who perform oversight functions are Executive Officers or heads of units that oversee internal audit, compliance, and risk management.

Paragraph (6)
Clear enough.

Paragraph (7)
Oversight actions established by the Financial Services Authority, including:
a. establishing a waiting period longer than 6 (six) months for prospective Independent Commissioners; b. establishing a waiting period for prospective Non-Independent Commissioners; and/or
c. not approving or canceling the appointment of Independent Commissioners and/or Non-Independent Commissioners who do not disclose conflicts of interest or potential conflicts of interest in the fitness and propriety assessment process.

Article 39
Paragraph (1)
What is meant by "bank business group" is the bank business group in accordance with OJK Regulations regarding the consolidation of commercial banks.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Article 40
Clear enough.

Article 41
Clear enough.

Article 42
Clear enough.

Article 43
Clear enough.

Article 44
Clear enough.

Article 45
Clear enough.

Article 46
Paragraph (1)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Examples of functional task fields include, among others, advisors, expert staff, and/or expert personnel.

Letter d
Tasks in other positions that do not cause conflicts of interest can be carried out as long as they do not ignore the implementation of the relevant person's duties and responsibilities as a member of the Board of Commissioners.

Letter e
Not holding concurrent positions as members of the Board of Commissioners in the event that there are laws and regulations that prohibit a person from holding concurrent positions in their position.

Paragraph (2)
Letter a
What is meant by "non-bank subsidiary companies controlled by the Bank" are Bank subsidiaries that do not conduct banking business activities.

Letter b
What is meant by "Bank shareholders in the form of legal entities" are controlling shareholders in the form of legal entities as referred to in regulations governing the assessment of fitness and propriety, including the central government and local governments or other institutions that are controlling shareholders of the Bank. Included in the definition of carrying out functional tasks is when the relevant function at the Bank and/or the legal entity shareholder's business group, including Bank subsidiaries, is to carry out its function as a representative of the Bank shareholder, such as members of the Board of Directors, members of the Board of Commissioners, or Executive Officers.

Letter c
Non-profit organizations, including membership in committees (task forces) in specific fields outside the Bank.

Paragraph (3)
Certain considerations include expertise, experience, and other added values possessed by members of the Board of Commissioners that are needed to support Bank strategy and development.

Paragraph (4)
Clear enough.

Paragraph (5)
What is meant by "public officials" is a person appointed and given the task to hold a specific position or job at a public body.
Public Bodies are executive, legislative, and judicial institutions, and other bodies whose main functions and tasks are related to the organization of the state, whose funds are partially or wholly sourced from the State Budget and/or Regional Budgets.

Article 47
See the explanation of Article 17.

Article 48
Approval of the Financial Services Authority (OJK) in accordance with OJK Regulations regarding the assessment of fitness and propriety for principal parties of financial service institutions.

Letter a
Possess integrity, including:

having good character and morality;
having a commitment to comply with laws and regulations, including Bank regulations and supporting OJK policies;
having a commitment to the development of healthy Bank business activities;
not undergoing the consequences of the final result of a re-assessment of principal parties with a "fail" rating and/or not being included in the list of failed parties; and
being competent to perform legal acts.

Letter b
Possess competence, including:

having knowledge and/or competence (expertise) that can be used in Bank supervision, including regarding management policies and the course of management, and providing advice to the Board of Directors;
supervising the Bank and directing, monitoring, and evaluating the implementation of the Bank's strategic policies in accordance with regulations, in the development of a healthy Bank, the application of risk management and internal control systems that are effective and efficient, and complying with applicable laws and regulations and standards;
supervising the formulation of business strategies and the implementation of business activities by the Board of Directors to ensure alignment of environmental, social, and governance aspects; and
having knowledge about Indonesia, particularly regarding the economy, culture, and Indonesian language, for Board of Commissioners members who are foreign workers in accordance with OJK Regulations regarding the utilization of foreign workers and knowledge transfer programs in the banking sector.

Letter c
Possess a good reputation, including:

not having non-performing loans and/or financing;
never having been declared bankrupt;
never having been a member of the Board of Directors and/or Board of Commissioners who were declared guilty for causing a company to be declared bankrupt;
never having been punished for committing criminal acts that harm state finances and/or are related to the financial sector;
holding annual General Meetings of Shareholders (GMS);
their accountability as members of the Board of Directors and/or Board of Commissioners is always accepted by the GMS or always provides accountability as members of the Board of Directors and/or Board of Commissioners to the GMS;
never having caused a company that has obtained a license, approval, or registration from the Financial Services Authority to fail to fulfill the obligation to submit annual reports and/or financial reports to the Financial Services Authority, and/or annual reports and/or financial reports not approved and/or certified by the GMS;
supervising and supporting the implementation of healthy Bank management; and
maintaining the Bank's reputation.

Article 49
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
The implementation of other supervisory duties and authorities is carried out as long as it does not contradict laws and regulations, the Articles of Association, and/or GMS decisions.

Paragraph (6)
What is meant by "operational activities" are fund provision, treasury, fund mobilization, and other operational activities.

Letter a
Clear enough.

Letter b
Establishments in the Bank's Articles of Association regarding other matters whose decision-making requires the involvement of the Board of Commissioners are directed towards matters that are strategic and affect the continuity of the Bank's business.

Paragraph (7)
Clear enough.

Article 50
See the explanation of Article 23.

Article 51
Reporting submissions to the Financial Services Authority are submitted by the Board of Commissioners to the supervision unit of the relevant Bank.

Article 52
Paragraph (1)
Guidelines and rules of work for the Board of Commissioners are also known as the Board of Commissioners Charter.

Paragraph (2)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Letter d
Meeting arrangements include, among others, regulations regarding meeting agendas, quorum requirements, decision-making, members' rights in the event of differing opinions in decision-making, and meeting minutes.

Letter e
Clear enough.

Letter f
Clear enough.

Letter g
The working relationship pattern between the Board of Commissioners and the Board of Directors includes, among others, meetings between the Board of Commissioners and the Board of Directors.

Article 53
Clear enough.

Article 54
This obligation is intended to maintain the confidentiality of information and avoid potential insider information.

Article 55
Paragraph (1)
Clear enough.

Paragraph (2)
What is meant by "joint meeting with the Board of Directors" is a meeting of the Board of Commissioners together with the Board of Directors, among others, for the Board of Commissioners to conduct supervision or provide instructions and/or guidance to the Board of Directors.

Paragraph (3)
What is meant by "majority" see the explanation of Article 6 paragraph (3).

Paragraph (4)
Clear enough.

Paragraph (5)
Utilizing information technology includes, among others, through video conferencing media or other electronic face-to-face media facilities.

Article 56
Clear enough.

Article 57
See the explanation of Article 32.

Article 58
Paragraph (1)
Clear enough.

Paragraph (2)
Not included in the definition of personal profit includes, among others, members of the Board of Commissioners as Bank customers receiving reasonable interest income or remuneration.

Paragraph (3)
Clear enough.

Article 59
Clear enough.

Article 60
Clear enough.

Article 61
Clear enough.

Article 62
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
Risk management committees in accordance with OJK Regulations regarding the implementation of risk management for commercial banks and OJK Regulations regarding the implementation of risk management for Sharia commercial banks and Sharia business units. Banks form an assets and liabilities management committee (ALCO) to complement the risk management committee.

Letter b
Credit or financing policy committees in accordance with OJK Regulations regarding the obligation to formulate and implement credit or financing policies for commercial banks.

Letter c
Credit or financing committees in accordance with OJK Regulations regarding the obligation to formulate and implement credit or financing policies for commercial banks.
The application of credit or financing committees can be adjusted to the Bank's business model. For example, a Bank implements the use of technology or a credit scoring system/model application in conducting credit or financing risk assessments.

Letter d
Information technology steering committees in accordance with OJK Regulations regarding the provision of information technology by commercial banks.

Paragraph (3)
Other committees include:
a. product committees, in the management of policies and monitoring of Bank products or activities;

b. performance management committee, in managing policies for budget monitoring and performance management implementation of the Bank so that there is alignment of strategic planning, target setting processes and performance assessment; and/or
c. human resources committee, in managing policies or regulations in the field of human resources.

Paragraph (4)
Clearly stated.

Article 63
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Other committees are adjusted according to the needs and/or complexity of the Bank, including the continuous financial monitoring committee.
The expansion of the scope of implementation of duties, responsibilities, and authority of committees includes adding risks related to the implementation of duties and responsibilities of the risk monitoring committee, such as climate-related risks, cyber risks, information technology risks, outsourcing risks, and other risk developments in the banking sector. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated.

Article 64
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Competency certificates include, among others, certificates in risk management, public accountant, accountant, and auditor.
Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.

Article 65
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Letter a
Risk management certificates as applicable to the Board of Directors are in accordance with the Financial Services Authority Regulation regarding the development of human resource quality of commercial banks. Letter b Competency certificates include, among others, certificates in accounting, treasury, and corporate finance. Paragraph (4) Clearly stated. Paragraph (5) Clearly stated. Paragraph (6) For the meaning of "majority", see the explanation of Article 6 paragraph (3).

Article 66
Clearly stated.

Article 67
Clearly stated.

Article 68
The meaning of "other party" includes, among others, Independent Parties with specific expertise, Executive Officials, and the Sharia Supervisory Board.

Article 69
Paragraph (1)
Parties who have a relationship with the Bank that can affect the ability of the concerned party to act independently, see the explanation of Article 38 paragraph (4).
The meaning of "cooling off period" is the interval between the time the position of the concerned party as a member of the Board of Directors or Executive Official or other relationship with the Bank ends effectively, and the time the concerned party is effectively appointed as an Independent Party member of the committee. Paragraph (2) Examples of Board of Directors members who oversee functions include directors who oversee the compliance function or directors who oversee the risk management function. Examples of Executive Officials who perform oversight functions are Executive Officials or heads of work units that oversee internal audit, compliance, or risk management.

Article 70
The Chairman of the Board of Commissioners committee can only serve as the chairman of the committee for a maximum of 2 (two) committees.

Article 71
Paragraph (1)
Letter a
Clearly stated.
Letter b
Monitoring of follow-up on audit results is conducted by the internal audit work unit.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.

Article 72
Clearly stated.

Article 73
Clearly stated.

Article 74
Paragraph (1)
Examples of activities:
a. accessing data, documents, and information of the Bank; b. communicating and coordinating with parties related to the committee's duties; and
c. exercising other authorities given by the Board of Commissioners,
according to applicable regulations.
Paragraph (2)
The meaning of "integrity" includes, among others, not being a party prohibited from being a principal, not being listed on the fail list, and not having non-performing loans or financing, supported by a personal statement. The meaning of "maintaining reputation" is to jointly maintain the reputation of the Bank and maintain personal reputation.

Article 75
Paragraph (1)
Guidelines and rules of work for committees are also known as committee charters.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.

Article 76
Clearly stated.

Article 77
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
For the meaning of "majority", see the explanation of Article 6 paragraph (3).
Paragraph (4)
For the meaning of "majority", see the explanation of Article 6 paragraph (3).
Paragraph (5)
Clearly stated.

Article 78
Clearly stated.

Article 79
Clearly stated.

Article 80
Paragraph (1)
These conflict of interest provisions are essentially intended so that members of the Board of Directors, members of the Board of Commissioners, members of Bank committees, members of the Sharia Supervisory Board, Executive Officials, and Bank employees do not participate in making decisions in situations and conditions where there is a conflict of interest. However, when a decision must still be made, the concerned party must prioritize the economic interests of the Bank and prevent the Bank from potential losses or a decrease in Bank profits, and disclose the conflict of interest condition in every decision. Paragraph (2) Clearly stated. Paragraph (3) Examples of conflicts of interest that have the potential to harm the Bank or reduce Bank profits include, among others, giving special treatment to certain parties outside of procedures and regulations, and providing interest rates that do not comply with procedures and regulations. Paragraph (4) Clearly stated.

Article 81
Clearly stated.

Article 82
Clearly stated.

Article 83
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Paragraph (5)
Letter a
Clearly stated.
Letter b
Examples of internal audit findings estimated to endanger the continuity of the Bank's business include, among others, capital conditions, asset quality, liquidity, and profitability, which do not meet applicable regulations, and Bank management that is not conducted based on prudential principles and sound banking principles. Letter c Clearly stated. Letter d Clearly stated. Letter e Other reports requested by the Financial Services Authority are required to support the implementation of the Financial Services Authority's supervisory function, including the implementation plan of internal audit in the current year, reports on follow-up of external audit and/or special/investigative audit results. Paragraph (6) Clearly stated. Paragraph (7) Clearly stated.

Article 84
Clearly stated.

Article 85
Paragraph (1)
The implementation of risk management includes, among others, active supervision by the Board of Directors and Board of Commissioners, availability of policies and procedures, and fulfillment of the adequacy of organizational structure, risk management processes and risk management functions, human resources, and internal controls. In the implementation of risk management, the Bank identifies, measures, monitors, and controls risks, including recent risk developments, such as country risk, information technology, outsourcing, cyber, climate change, and other risk developments in the banking sector. In the implementation of risk management, the Bank applies, among others, applicable standards. Examples of applicable standards include standards recommended by the Basel Committee on Banking Supervision at the Bank for International Settlements. Paragraph (2) The implementation of governance, risk management, and compliance is known as the implementation of governance, risk, and compliance or GRC. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated. Paragraph (5) Clearly stated.

Article 86
Paragraph (1)
Clearly stated.
Paragraph (2)
Examples of Bank business activities utilized in activities related to criminal offenses include, among others, the use of bank accounts for gambling activities including online gambling, online fraud including fictitious online investment activities, online prostitution, and other economic crimes. Economic crime is a crime committed for economic motives. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated.

Article 87
Paragraph (1)
The meaning of "country risk" is the risk arising from uncertainty due to the worsening of a country's economic conditions, a country's failure to pay debts, social and political turmoil in a country, and a country's policies including nationalization or asset takeover, exchange rate controls and/or devaluation of exchange rates. The meaning of "transfer risk" is the potential loss arising because foreign parties abroad cannot provide or cannot obtain foreign currency to fulfill their obligations due to certain restrictions, such as restrictions on cash and/or capital flows by a country's government. Besides transfer risk, types of risk included in country risk are sovereign risk and macroeconomic risk. Paragraph (2) Examples of risk management implementation related to country risk and transfer risk include, among others:
a. credit risk policies and procedures contain methods or percentages of reserves formed for each funding portfolio or for each country; b. country risk policies and procedures must be adjusted to the Bank's risk profile, systemic importance, market conditions, and macroeconomic conditions both in the country where the Bank is located and in the counterparty's country. The aforementioned policies and procedures must be able to describe the Bank's view of country risk exposure comprehensively; and
c. identification of country risk exposure includes exposure for each country including intra-group, exposure based on specific regions including exposure based on individuals, and exposure based on transaction counterparties (counterparty).
Paragraph (3)
Clearly stated.

Article 88
Paragraph (1)
The meaning of "risk profile report" is the risk profile report in accordance with the Financial Services Authority Regulation regarding the implementation of risk management for commercial banks and the Financial Services Authority Regulation regarding the implementation of risk management for Islamic commercial banks and Sharia business units. Paragraph (2) Clearly stated.

Article 89
Paragraph (1)
Standards used include, among others, financial accounting standards and valuation standards.
Paragraph (2)
Clearly stated.

Article 90
Partnerships in business activities include, among others, collaboration between the Bank and:
a. other banks; b. non-bank financial institutions;
c. non-financial institutions, such as financial technology companies or fintech; and
d. digital business actors, such as e-commerce, bigtech, start-up companies, ride-hailing, and online media.
Partnerships in business activities include other forms in the Bank's efforts to increase product innovation and/or business activities.

Article 91
Clearly stated.

Article 92
Paragraph (1)
Clearly stated.
Paragraph (2)
Remuneration policies include the determination of remuneration for members of the Board of Directors and members of the Board of Commissioners who have been appointed by the General Meeting of Shareholders until the concerned party is approved in the suitability and propriety assessment by the Financial Services Authority. Paragraph (3) The meaning of specific conditions established by the Bank includes, among others, the Bank incurs losses, risks occur that have a negative impact on the Bank's finances, and fraud occurs committed by parties who are material risk takers that harm the Bank. Paragraph (4) The meaning of specific conditions includes, among others:
a. the Bank's supervisory status is not in normal supervisory status; and/or b. there are irregularities in the provision of variable remuneration, for example, disproportionate, unfair, potential fraud, and including when there are remuneration payments that do not match performance and risk. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated. Paragraph (7) Clearly stated.

Article 93
Paragraph (1)
The implementation of prudential principles in the provision of funds, including the determination of funding limits and large exposures to certain parties and/or business groups, aims to avoid Bank business failure due to funding concentration and to increase the independence of the Bank's Board of Directors and Board of Commissioners from potential intervention from related parties. Paragraph (2) Clearly stated. Paragraph (3) Clearly stated.

Article 94
Paragraph (1)
Letter a
Clearly stated.
Letter b
Information dissemination channels include, among others, the Bank's website, newspapers, and/or other electronic media.
The meaning of "reliable" includes, among others, timely, relevant, high quality, and meeting security standards that can protect information.
Paragraph (2)
Clearly stated.

Article 95
Clearly stated.

Article 96
Clearly stated.

Article 97
Clearly stated.

Article 98
The Bank ensures the reliability of the preparation of financial reports and unaudited financial performance information, among others, by having adequate resources in the preparation of financial reports and implementing effective internal controls.

Article 99
Paragraph (1)
The Bank's provision of information technology includes, among others, the application of good information technology governance in the provision of information technology, the application of risk management for information technology provision, and maintaining cyber resilience and security. Paragraph (2) Clearly stated.

Article 100
Clearly stated.

Article 101
Financial engineering is an action that includes, among others, the utilization of financial instrument innovations and the development of financial theory using mathematical modeling to solve financial problems, create financial products, make decisions about Bank business activities (fund collection, fund disbursement, service activities) and risk management, and in efforts to obtain specific profits for the Bank or financial conglomerates related to the Bank. Examples of prohibited financial engineering include those that do not comply with sound Bank management principles, such as violations of accounting standards applied in the Bank's financial reports, speculative and manipulative financial actions, fictitious loans or window dressing, the Bank conducting transaction splitting on groups in credit disbursement, increasing transactions near a certain period or year-end, increasing bank revenue unreasonably to help increase profits so that an illusion of better performance is created than before, and so on. Legal engineering is an action that includes, among others, the utilization of loopholes in the legal system exploited to provide benefits, including legal benefits for the Bank. Examples of prohibited legal engineering include those that do not comply with sound Bank management principles, namely the utilization of regulatory loopholes that provide certain benefits to the Bank in an unhealthy manner, including regarding the issuance of Bank products not yet regulated in regulations, avoidance or reduction of tax burdens through various practices (including intragroup transactions involving transfer pricing, income shifting), mismatch of licenses with Bank business activities, manipulation of regulations, utilization of grey areas in existing or unregulated regulations which can imply an increase in the Bank's overall risk. Internal parties of the Bank include, among others, shareholders including controlling shareholders and ultimate controlling shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, and Bank employees. External parties of the Bank include, among others, vendors working with the Bank, consultants, and other parties outside the Bank.

Article 102
Clearly stated.

Article 103
Clearly stated.

Article 104
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
The responsibility of controlling shareholders includes, among others, making capital contributions, providing collateral or asset guarantees from controlling shareholders in efforts to handle the Bank's capital issues (personal guarantee or corporate guarantee). Paragraph (4) Clearly stated. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated.

Article 105
Clearly stated.

Article 106
Clearly stated.

Article 107
Paragraph (1)
The meaning of "controlling shareholder" and "ultimate controlling shareholder" is the controlling shareholder and ultimate controlling shareholder in accordance with the Financial Services Authority Regulation regarding the suitability and propriety assessment for principals of financial service institutions. Shareholders support the implementation of business activities and healthy, competitive Bank management in accordance with prudential principles and risk management, including by not participating in making operational Bank decisions for shareholders who are not also managers or Bank employees (including influencing operational Bank decisions) in accordance with the Financial Services Authority Regulation regarding commercial banks. Paragraph (2) Clearly stated.

Article 108
Paragraph (1)
Dividend policies aim to ensure the management of shareholder rights in the implementation of dividend distribution is in accordance with Good Governance at the Bank and in accordance with regulations, while still considering the interests of the Bank. One form of communication to shareholders is by including dividend policies on the Bank's website. Paragraph (2) Letter a Clearly stated. Letter b The amount of dividends given includes the dividend payout ratio. Letter c Clearly stated. Letter d Clearly stated. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated. Paragraph (5) External considerations, among others:
a. economic conditions and prospects (market wide); b. potential risks from outside the Bank; and
c. fulfillment of regulatory requirements, including taxation.
Internal considerations, namely related to the Bank, include, among others:
a. financial performance realization; b. business growth plans;
c. future profitability prospects;
d. health level; e. fulfillment of capital adequacy levels; f. potential risks from within the Bank; and g. future capital strengthening needs.
Paragraph (6)
The meaning of "profitability generated by the Bank fairly" is profitability generated from the Bank's normal business activities, including not considering income or profit from non-recurring income and/or more present net profit reports. Paragraph (7) Clearly stated. Paragraph (8) Letter a Clearly stated. Letter b The meaning of "Bank conditions in efforts to strengthen Bank capital and/or handle Bank problems" includes, among others:

fulfillment of minimum capital provision;
the Bank is still in efforts to fulfill minimum core capital in accordance with the Financial Services Authority Regulation regarding commercial bank consolidation; and/or
the Bank's supervisory status is not in normal supervisory status.
Fulfillment of minimum capital provision is a minimum capital provision obligation ratio equal to or less than the minimum capital provision obligation ratio that considers minimum capital provision according to risk profile and additional capital buffers.

Article 109
Paragraph (1)
The aforementioned policies and/or procedures include, among others:
a. policies to prevent insider trading, including in transactions involving individual employees as well as members of the Board of Commissioners, Board of Directors, and Sharia Supervisory Board; b. transactions conducted, including related party transactions that are approved and implemented, do not contain conflicts of interest and protect the interests of the Bank and shareholders; and
c. information dissemination channels by providing equal, timely, and easily accessible access (including through electronic media such as the Bank's website) for information relevant to shareholders, including regarding the submission of meeting invitations, all information and results of the General Meeting of Shareholders, and voting results.
Letter a
Shareholder rights include, among others, obtaining material information about the Bank regularly and on time, voting in the General Meeting of Shareholders, obtaining resolution in case shareholders disagree with Bank activities and corporate actions, and receiving dividends in accordance with dividend policies and General Meeting of Shareholders decisions. Letter b Clearly stated. Paragraph (2) Clearly stated.

Article 110
The meaning of considering Bank conditions includes, among others, not releasing shares that will create or add risks to the Bank and/or intended to release share ownership to avoid losses due to potential or actual problems in the Bank.

Article 111
Paragraph (1)
The Investee or recipient of capital participation is the company where the Bank makes capital participation.
Paragraph (2)
Clearly stated.

Article 112
Clearly stated.

Article 113
Clearly stated.

Article 114
The meaning of "controlling shareholder" is the controlling shareholder including the ultimate controlling shareholder in accordance with the Financial Services Authority Regulation regarding the suitability and propriety assessment for principals of financial service institutions. Examples of not taking actions that can cause the Bank to be exposed to risk include, among others, not taking unplanned withdrawal actions that cause liquidity risk, not taking actions that impact the Bank's reputation risk, and so on.

Article 115
Paragraph (1)
The meaning of "guidelines for the preparation of Bank credit or financing policies" is the guidelines for the preparation of Bank credit or financing policies in accordance with the Financial Services Authority Regulation regarding the obligation to prepare and implement credit or financing policies for banks for commercial banks. Bank credit or financing policies that include the settlement of uncollectible credit or financing in accordance with the Financial Services Authority Regulation regarding the obligation to prepare and implement credit or financing policies for banks for commercial banks related to policies on problematic credit or financing that cannot be settled or collected again after settlement efforts by the Bank, also includes in the event the Bank writes off part or all of the debtor's debt or obligations, including post-write-off policies, including the Bank's policies and procedures in the event of repayment of written-off credit or financing by the written-off debtor. Paragraph (2) Pressure from any party includes, among others, pressure from internal and external parties of the Bank that causes credit or financing disbursement to not meet prudential aspects, not meet credit or financing procedures and policies, or result in violations of regulations or fraud, such as fictitious credit or financing, window dressing, nominee credit or financing. Internal parties include, among others, controlling shareholders, Board of Directors, Board of Commissioners and/or Bank employees. Examples of actions "ensuring the implementation of Bank credit or financing policies and the implementation of risk management are carried out consistently, and in accordance with applicable regulations" include the assessment for granting credit or financing to each debtor, including debtors that are state-owned and/or regional-owned enterprises, being conducted comprehensively and not providing different requirements and assessments than other debtors. Credit or financing policies are in accordance with the Financial Services Authority Regulation regarding the obligation to prepare and implement credit or financing policies for banks for commercial banks. Paragraph (3) Clearly stated. Paragraph (4) The settlement of credit or financing conducted by the Bank includes, among others, the sale or auction of collateral, cessie credit. Examples of actions "avoiding pressure from any party and carried out in accordance with Bank credit or financing policies, risk management implementation, and applicable regulations" include writing off credit or

financing, including other actions related to the settlement of credit or financing conducted by the Bank to each debtor, including debtors that are state-owned and/or regional-owned enterprises, is conducted comprehensively and does not provide different requirements and assessments from other debtors.

Paragraph (5)

Clearly stated.

Article 116

The process of procuring goods and/or services includes, among others, the processes of planning, verification, documentation, selection, providing explanations (aanwijzing), evaluation of offers, negotiation, determination of the winner, contract implementation, handover of goods and/or services, and payment.

Article 117

Clearly stated.

Article 118

Paragraph (1)

Social and environmental responsibility funds are in accordance with the Financial Services Authority Regulation regarding the implementation of sustainable finance for financial service institutions, issuers, and public companies.

Parties internal to the Bank include controlling shareholders, the Board of Directors, the Board of Commissioners, and Bank employees.

External parties to the Bank include vendors and other parties outside the Bank.

Paragraph (2)

Clearly stated.

Article 119

Prohibitions against the Bank's shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the Bank's committees, members of the Sharia supervisory board, Executive Officials, and/or Bank employees, in order to obtain or attempt to obtain for others the opportunity to obtain, among others, advances, bank guarantees, or credit facilities or fund disbursement or financing from the Bank, or in order to purchase or discount by the Bank of bills of exchange, promissory notes, checks, and commercial papers or other evidence of obligations, or in order to provide approval for others to carry out withdrawals of funds exceeding the credit limit or fund disbursement or financing at the Bank, as well as other activities involving the Bank.

The term "Bank employees" refers to all officials and employees of the Bank (permanent or non-permanent).

Article 120

The term "affiliated parties" refers to affiliated parties in accordance with the provisions of legislation regarding banking and Sharia banking.

The term "Bank employees" see the explanation of Article 119.

Article 121

See the explanation of Article 120.

Article 122

Clearly stated.

Article 123

Clearly stated.

Article 124

Environmental, social, and governance values are known by the term environmental, social, and governance/ESG.

Article 125

Paragraph (1)

Clearly stated.

Paragraph (2)

Letter a

Clearly stated.

Letter b

Clearly stated.

Letter c

Clearly stated.

Letter d

3 (three) lines of defence (three lines of defence) include the business management line, the risk and compliance management line, and the internal audit line.

Article 126

Clearly stated.

Article 127

Paragraph (1)

Parent company or implementing parent company in accordance with the Financial Services Authority Regulation regarding the consolidation of commercial banks.

The term "banking business group" see the explanation of Article 39 paragraph (1).

Coordination and evaluation are conducted to:

a. ensure the implementation of Good Corporate Governance at the Bank for members of the banking business group is carried out well; and

b. take necessary actions, both preventive and corrective, regarding the implementation of Good Corporate Governance at the Bank by member banks of the banking business group.

Paragraph (2)

Clearly stated.

Article 128

Paragraph (1)

Banking synergy is conducted in accordance with the Financial Services Authority Regulation regarding commercial banks or the Financial Services Authority Regulation regarding Sharia commercial banks.

Paragraph (2)

Banking synergy in the form of committee support can be conducted by the Bank, among others:

a. Committees at the parent company or implementing parent company also act as committees at member banks of the banking business group, if there is no separate committee at the member bank of the banking business group; or

b. Bank employees at least at the level of Executive Officials at the parent company or implementing parent company are assigned to become members of committees at member banks of the banking business group, if there is a separate committee at the member bank of the banking business group.

Paragraph (3)

The participation of Executive Officials in decisions related to member banks of the banking business group aims to ensure that the interests of member banks of the banking business group can be accommodated and implemented well, as well as supporting the implementation of transfer of knowledge.

Paragraph (4)

Clearly stated.

Article 129

Clearly stated.

Article 130

Clearly stated.

Article 131

Paragraph (1)

Clearly stated.

Paragraph (2)

Publication of the GCG implementation report on the Bank's website also aims to convey the GCG implementation report to other shareholders.

Paragraph (3)

Clearly stated.

Paragraph (4)

Clearly stated.

Article 132

Paragraph (1)

The self-assessment period is 2 (two) times a year referring to the assessment period of the health level of Commercial Banks in accordance with the Financial Services Authority Regulation regarding the assessment of the health level of commercial banks.

Paragraph (2)

Clearly stated.

Paragraph (3)

Clearly stated.

Article 133

Clearly stated.

Article 134

Paragraph (1)

Clearly stated.

Paragraph (2)

The term "OJK correspondence system" refers to the Financial Services Authority Reporting System with the address https://sipenaojk.ojk.go.id or another address designated by the Financial Services Authority.

Force majeure includes, among others, the failure of the OJK reporting system.

Paragraph (3)

Force majeure includes, among others, the failure of the OJK correspondence system.

Article 135

Clearly stated.

Article 136

The application of the same provisions for KCBLN and Banks other than KCBLN is because the principles and scope of implementing Good Corporate Governance at Banks are universal for every type of Bank.

Article 137

Clearly stated.

Article 138

Clearly stated.

Article 139

Paragraph (1)

Clearly stated.

Paragraph (2)

Clearly stated.

Paragraph (3)

Supervisory actions established by the Financial Services Authority, among others:

a. establish a waiting period longer than 6 (six) months; and/or

b. do not approve or cancel the appointment as members of the Board of Directors and/or members of the Board of Commissioners who do not disclose conflicts of interest or potential conflicts of interest in the assessment of competence and propriety process.

Article 140

Clearly stated.

Article 141

Clearly stated.

Article 142

Clearly stated.

Article 143

Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 53/OJK

Implementation of Good Corporate Governance for Commercial Banks

Lineage: In force

Timeline