Implementation of Good Corporate Governance for Sharia Rural Financing Banks

To:
The Board of Directors of Sharia Rural Financing Banks

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 13 /SEOJK.03/2019

CONCERNING

THE IMPLEMENTATION OF CORPORATE GOVERNANCE FOR SHARIA RURAL FINANCING BANKS

In connection with the establishment of the Financial Services Authority Regulation Number 24/POJK.03/2018 concerning the Implementation of Corporate Governance for Sharia Rural Financing Banks, hereinafter referred to as the POJK on BPRS Corporate Governance, it is necessary to regulate the implementation of the aforementioned Financial Services Authority Regulation in the Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

Good Corporate Governance is a method of managing BPRS that applies the following principles:
a. transparency, namely openness in presenting material and relevant information as well as openness in the decision-making process; b. accountability, namely clarity of function and implementation of accountability of BPRS organs so that management runs effectively;
c. responsibility, namely the suitability of BPRS management with statutory regulations and healthy BPRS management principles;
d. professionalism, namely having competence, being able to act objectively, and being free from influence or pressure from any party (independent) and having a high commitment to develop BPRS; and e. fairness, namely justice and equality in fulfilling the rights of Stakeholders arising from agreements and statutory regulations.
In applying the professional principle as referred to in paragraph 1 letter d, the existence of an Independent Commissioner is required for BPRS having core capital of at least IDR 50,000,000,000.00 (fifty billion rupiah) as referred to in Article 24 paragraph (1) and paragraph (2) of the POJK on BPRS Corporate Governance, and Independent Parties as members of the Audit Committee and Risk Monitoring Committee for BPRS having core capital of at least IDR 80,000,000,000.00 (eighty billion rupiah) as referred to in Article 49 paragraph (1) and Article 50 paragraph (1) of the POJK on BPRS Corporate Governance. The existence of Independent Commissioners and Independent Parties is expected to increase balance, avoid conflicts of interest in the implementation of duties, and protect Stakeholders, particularly fund owners and minority shareholders. To prevent such conflicts of interest, it is necessary to clarify regulations regarding the cooling-off period for parties who will become Independent Commissioners.

Pursuant to Article 24 paragraph (3) of the POJK on BPRS Corporate Governance, the cooling-off period to become an Independent Commissioner for former members of the Board of Directors, Executive Officials, or other parties who have a relationship with BPRS that can influence their ability to act independently, is at least 1 (one) year.

Independent Commissioners or Independent Parties are members of the Board of Commissioners or parties outside BPRS who do not have financial, managerial, share ownership, and/or family relationships with members of the Board of Directors, members of the Board of Commissioners, and/or Controlling Shareholders (PSP), or financial and/or share ownership relationships with BPRS that can influence the relevant party's ability to act independently.

a. What is meant by "having a financial relationship with members of the Board of Directors, members of the Board of Commissioners, and/or PSP" is when a person receives and/or provides income, financial assistance, loans, and/or becomes a guarantor or receives guarantees from and/or to:
1) members of the Board of Directors, members of the Board of Commissioners, and/or PSP; and/or
2) companies whose PSP is a member of the Board of Directors, members of the Board of Commissioners, and/or shareholders of the relevant BPRS.

b. What is meant by having a "managerial relationship with members of the Board of Directors, members of the Board of Commissioners, and/or PSP" is when a person holds a position as:
1) a member of the Board of Directors or member of the Board of Commissioners in a company where other members of the Board of Commissioners become members of the Board of Commissioners of BPRS;
2) a member of the Board of Directors or member of the Board of Commissioners in a company whose PSP is a member of the Board of Directors or member of the Board of Commissioners of BPRS; and/or
3) a member of the Board of Directors or member of the Board of Commissioners in a company that is the PSP of BPRS.

c. What is meant by having a "share ownership relationship with members of the Board of Directors, members of the Board of Commissioners, and/or PSP" is when a person becomes a shareholder in:
1) other companies owned by the PSP of BPRS; and/or
2) other companies owned by members of the Board of Directors and/or members of the Board of Commissioners, so that individually or together they become PSP in that company.

d. What is meant by having a "family relationship with members of the Board of Directors, members of the Board of Commissioners, and/or PSP" is a family or in-law relationship up to the second degree as regulated in the Financial Services Authority Regulation regarding BPRS. In the event that the PSP of BPRS is a legal entity, the family relationship between the Independent Commissioner or Independent Party and the PSP of BPRS is viewed from the family relationship with the individual PSP of the legal entity PSP of BPRS up to the ultimate shareholders of BPRS.

e. What is meant by "having a financial relationship with BPRS" is when a person receives and/or provides income, financial assistance, or loans from and/or to BPRS that causes the party providing income, financial assistance, or loans to have the ability to influence (controlling influence) the party receiving income, financial assistance, and/or loans, such as:
1) affiliated parties providing services to BPRS, including the Sharia Supervisory Board (DPS), public accountants, appraisers, legal consultants, and other consultants; and/or
2) parties conducting financial transactions with BPRS that can influence the sustainability of BPRS and/or the parties conducting such financial transactions, including core debtors, core depositors, or companies whose majority of funding sources are obtained from BPRS.

f. What is meant by "having a share ownership relationship with BPRS" is when a person:
1) owns more than 5% (five percent) of BPRS shares of the paid-up capital of BPRS; and/or
2) owns BPRS shares of at most 5% (five percent) of the paid-up capital of BPRS and exercises control over BPRS.

Pursuant to Article 25 of the POJK on BPRS Corporate Governance, the transition from a non-independent commissioner to an Independent Commissioner must obtain approval from the Financial Services Authority. To obtain such approval from the Financial Services Authority, the prospective Independent Commissioner submits a Statement of Independence Letter referring to Appendix I which is an integral part of this Financial Services Authority Circular Letter. Approval from the Financial Services Authority refers to Financial Services Authority regulations governing the assessment of competence and propriety for key parties of financial service institutions.
Pursuant to Article 89 paragraph (1) of the POJK on BPRS Corporate Governance, in implementing Good Corporate Governance, BPRS is required to prepare a report on the implementation of corporate governance at the end of each fiscal year. The report on the implementation of corporate governance is submitted to shareholders and at least to the Financial Services Authority, BPRS associations in Indonesia, and Stakeholders through internal media owned by BPRS.
BPRS is required to submit a self-assessment report on the adequacy of corporate governance implementation to the Financial Services Authority comprehensively at least 1 (one) time in 1 (one) year as referred to in Article 92 of the POJK on BPRS Corporate Governance, as an effort to improve and increase the quality of corporate governance implementation.
Pursuant to Article 94 of the POJK on BPRS Corporate Governance, BPRS is required to submit reports on the implementation of corporate governance and self-assessment results to the Financial Services Authority online through the Financial Services Authority reporting system. In the event that submission of reports online through the Financial Services Authority reporting system cannot yet be performed, reports are submitted offline.

Submission of reports on the implementation of corporate governance and self-assessment results online through the Financial Services Authority reporting system or offline is carried out in accordance with regulations as regulated in the Financial Services Authority Regulation regarding reporting of rural credit banks and Sharia rural financing banks through the Financial Services Authority reporting system.

II. IMPLEMENTATION OF DUTIES AND RESPONSIBILITIES OF THE SHARIA SUPERVISORY BOARD

The Sharia Supervisory Board (DPS) is a board tasked with providing advice and suggestions to the Board of Directors and supervising BPRS activities to ensure compliance with Sharia Principles.
The duties and responsibilities of the DPS as referred to in Article 44 paragraph (2) of the POJK on BPRS Corporate Governance are carried out primarily on:
a. supervision of the development of new products and activities of BPRS; and b. supervision of BPRS activities.
In carrying out supervision of the development of new products and activities as referred to in paragraph 2 letter a, the DPS does the following:
a. requests explanations from authorized BPRS employees regarding the objectives, characteristics, and contracts used in the development of new products and activities; b. examines the contracts used in new products and activities. If there is a fatwa from the National Sharia Board – Indonesian Ulema Council (DSN-MUI) regarding new products and activities, the DPS analyzes the suitability of the contracts of new products and activities with the DSN-MUI fatwa. If there is no DSN-MUI fatwa regarding new products and activities, the DPS requests a fatwa from DSN-MUI through BPRS;
c. studies the requirements, characteristics, and systems and procedures of new products and activities related to the fulfillment of Sharia Principles; and
d. provides opinions regarding the fulfillment of Sharia Principles for new products and activities.
In carrying out supervision of BPRS activities as referred to in paragraph 2 letter b, the DPS does the following:
a. office inspections of BPRS at least 1 (one) time in 1 (one) month; b. analysis of reports submitted by and/or requested from the Board of Directors, Compliance Work Unit (SKP) or Executive Officials responsible for the implementation of the compliance function (PE Compliance), and/or Internal Audit Work Unit (SKAI) or Executive Officials responsible for the implementation of the internal audit function (PE Internal Audit) to determine the quality of the implementation of the fulfillment of Sharia Principles in BPRS's fund collection, fund disbursement, and service activities;
c. determination of:
1) samples of at least 3 (three) customers per semester for each product, activity, and/or contract for fund collection, fund disbursement, and BPRS services, including the handling of restructured financing; and
2) BPRS activities not included in item 1) that are examined, if necessary;
d. examination of transaction documents from customers determined as samples as referred to in letter c item 1) to determine the fulfillment of Sharia Principles, at least covering the fulfillment of conditions and pillars in contracts for fund collection and fund disbursement between BPRS and customers, including:
1) adequacy and completeness of proof of purchase of goods in murabahah financing;
2) adequacy and completeness of proof of customer business results reports financed as the basis for profit-sharing calculations for mudharabah financing or musyarakah financing; and
3) determination and charging of ujrah (fee) to customers for qardh financing products to ensure that the determination of ujrah is not related to the amount of qardh financing;
e. examination of transaction documents from other BPRS activities as referred to in letter c item 2) to determine the fulfillment of Sharia Principles; f. if necessary, conducting inspections, observations, and requests for information and/or confirmation from BPRS employees and/or customers to strengthen the results of transaction document examinations as referred to in letter d and letter e; g. requesting documentary evidence from the BPRS Board of Directors regarding the calculation and recording of bonus or profit-sharing payments to fund-collecting customers, profit-sharing payments to other banks, recording of income from fines, placements in conventional banks, and other non-halal income, as well as reporting of fund receipts from zakat, infak, sedekah, and wakaf; h. providing opinions regarding the fulfillment of Sharia Principles for:
1) fund collection, fund disbursement, service activities, and other BPRS activities; and
2) calculation and recording of bonus or profit-sharing payments to fund-collecting customers, profit-sharing payments to other banks, recording of income from fines, placements in conventional banks, and other non-halal income, as well as reporting of fund receipts from zakat, infak, sedekah, and wakaf;
i. discussion with the Board of Directors, Board of Commissioners, BPRS employees, and/or other parties requested for confirmation regarding the results of examination findings as referred to in letter a, the results of which are recorded in meeting minutes; and

j. if necessary, explaining in depth and comprehensively the results of DPS supervision to the Financial Services Authority, including in the final meeting with the Financial Services Authority to discuss examination results (exit meeting).

The DPS submits a report on the results of DPS supervision every semester to the Financial Services Authority as referred to in Article 44 paragraph (3) of the POJK on BPRS Corporate Governance, accompanied by a Letter of Submission of DPS Supervision Results Report referring to Appendix II.A which is an integral part of this Financial Services Authority Circular Letter.
The DPS supervision results report as referred to in paragraph 5 is submitted at the latest:
a. end of August for the first semester; and b. end of February for the second semester.
The DPS supervision results report covers:
a. DPS Supervision Working Paper on the Development of New Products and Activities of BPRS referring to Appendix II.B which is an integral part of this Financial Services Authority Circular Letter; b. DPS Supervision Working Paper on BPRS Activities referring to Appendix II.C which is an integral part of this Financial Services Authority Circular Letter; and
c. Minutes of DPS Examination Results Discussion Meeting as referred to in paragraph 4 letter i referring to Appendix II.D which is an integral part of this Financial Services Authority Circular Letter.

In the event that BPRS does not develop new products and/or activities during the reporting period, BPRS still submits the supervision working paper report on the development of new products and/or activities of BPRS with the note "nil".

In increasing the effectiveness of the implementation of duties and responsibilities of the DPS, BPRS provides work facilities.
BPRS assigns at least 1 (one) BPRS employee to support the implementation of duties and responsibilities of the DPS.
Pursuant to Article 100 paragraph (2) of the POJK on BPRS Corporate Governance, in the event that the DPS does not carry out duties and responsibilities well until the business license of BPRS is revoked, the DPS members concerned are subject to sanctions prohibiting them from becoming DPS members in the Sharia banking sector for a maximum of 10 (ten) years from the date of revocation of the business license of BPRS by the Financial Services Authority.

What is meant by "DPS does not carry out duties and responsibilities well until the business license of BPRS is revoked" includes at least:
a. not providing advice and suggestions to the Board of Directors based on supervision results conducted by the DPS; b. not evaluating BPRS policies and standard operating procedures to ensure compliance with Sharia Principles;
c. not supervising the process of developing new BPRS products to ensure compliance with DSN-MUI fatwas;
d. not conducting periodic evaluations of the mechanisms for fund collection, fund disbursement, and BPRS services; and/or e. not submitting DPS supervision results reports on a semi-annual basis, which results in the revocation of the BPRS business license.

BPRS that already has guidelines for the implementation of duties and responsibilities of the DPS must adjust them to the guidelines for the implementation of duties and responsibilities of the DPS as regulated in this Financial Services Authority Circular Letter.

III. SELF-ASSESSMENT ON THE IMPLEMENTATION OF CORPORATE GOVERNANCE

BPRS is required to submit a self-assessment report on the implementation of corporate governance at least 1 (one) time in 1 (one) year as referred to in Article 92 of the POJK on BPRS Corporate Governance. The results of the self-assessment of corporate governance implementation are an integral part of the Corporate Governance Implementation Report.
The self-assessment of corporate governance implementation is conducted against 11 (eleven) assessment factors:
a. implementation of duties and responsibilities of the Board of Directors; b. implementation of duties and responsibilities of the Board of Commissioners;
c. implementation of duties and responsibilities of the DPS;
d. completeness and implementation of committee duties or functions; e. implementation of Sharia Principles in BPRS activities; f. handling of conflicts of interest; g. implementation of compliance, internal audit, and external audit functions; h. implementation of risk management, including the internal control system;
i. maximum limit of fund disbursement;
j. BPRS business plan; and k. transparency of financial and non-financial conditions.

The factor of risk management implementation, including the internal control system, as referred to in letter h is assessed according to the staging as referred to in Article 21 paragraph (5) and paragraph (6) of the Financial Services Authority Regulation regarding the implementation of risk management for Sharia rural financing banks.

In carrying out self-assessment, BPRS uses the Self-Assessment Guidelines for the Implementation of Corporate Governance consisting of:
a. General Explanation of the Self-Assessment Guidelines for the Implementation of Corporate Governance; b. Instructions for Filling Out the Self-Assessment Working Paper for the Implementation of Corporate Governance;
c. Self-Assessment Working Paper for the Implementation of Corporate Governance; and
d. Conclusion, referring to Appendix III.A, which is an integral part of this Financial Services Authority Circular Letter.
Filling out the Self-Assessment Working Paper for the Implementation of Corporate Governance is done using a qualitative method based on data and information that corresponds to the actual conditions.
Data and information as referred to in paragraph 4 include among others management data, ownership data, BPRS annual reports, reports on the main points of the implementation of duties of Board of Directors members overseeing the compliance function, DPS supervision results reports, reports related to the internal audit function at BPRS, risk profile reports, business plans, business plan realization reports, and business plan supervision reports, as well as other reports related to the assessment factors of corporate governance implementation.
The final result of the self-assessment of corporate governance implementation for BPRS is in the form of a Composite Corporate Governance Rating with the following assessment range:

Composite Score
Composite Corporate Governance Rating
1.0 ≤ Composite Score < 1.8 Very Good
1.8 ≤ Composite Score < 2.6 Good
2.6 ≤ Composite Score < 3.4 Fairly Good
3.4 ≤ Composite Score < 4.2 Poorly Good
4.2 ≤ Composite Score < 5.0 Bad

If at least one assessment factor (from the eleven assessment factors) as referred to in paragraph 2 receives a Bad (5) score, the Composite Corporate Governance Rating that BPRS can achieve is at most Fairly Good, even if the final result of the self-assessment Composite Corporate Governance Rating reaches Good or Very Good.
The Self-Assessment Working Paper for the Implementation of Corporate Governance and supporting documents must be documented in accordance with statutory regulations, including regarding archiving, to facilitate tracing by interested parties.
Based on the Self-Assessment Working Paper for the Implementation of Corporate Governance, BPRS creates the Self-Assessment Results of the Implementation of Corporate Governance on a separate sheet referring to Appendix III.B which is an integral part of this Financial Services Authority Circular Letter, which describes the fulfillment of the adequacy of all assessment factors of corporate governance implementation at least covering:
a. Composite Score and Composite Corporate Governance Rating; b. identification of problems in the form of weaknesses and their root causes, action plans which are corrective actions, and implementation time targets; and
c. strengths of corporate governance implementation.
The Self-Assessment Results of the Implementation of Corporate Governance must be signed by the Chief Director and Chief Commissioner of BPRS.
The self-assessment report on the implementation of corporate governance submitted to the Financial Services Authority covers:
a. Self-Assessment Working Paper for the Implementation of Corporate Governance referring to Appendix III.A; and b. Self-Assessment Results of the Implementation of Corporate Governance referring to Appendix III.B, which are an integral part of this Financial Services Authority Circular Letter.
In the event that based on the results of assessment or evaluation by the Financial Services Authority there are factors assessed as significantly affecting the corporate governance of BPRS and potentially having an impact on the condition and/or sustainability of BPRS, the Financial Services Authority is authorized to request BPRS to:
a. submit an action plan containing improvement steps that must be implemented by BPRS with a specific time target; and/or b. if necessary, adjust the action plan submitted as referred to in letter a, as referred to in Article 95 paragraph (2) and paragraph (3) of the POJK on BPRS Corporate Governance.
In the event that there is a request from the Financial Services Authority to BPRS to submit and/or adjust the action plan as referred to in paragraph 12, BPRS must add information regarding the implementation of the action plan and the implementation time target of the action plan, as well as obstacles to resolution in the Self-Assessment Results of the Implementation of Corporate Governance referring to Appendix III.B which is an integral part of this Financial Services Authority Circular Letter.

IV. REPORT ON THE IMPLEMENTATION OF CORPORATE GOVERNANCE

BPRS submits a complete report on the implementation of corporate governance annually to shareholders and at least to:
a. the Financial Services Authority, b. BPRS associations in Indonesia, and
c. Stakeholders through internal media owned by BPRS,
at the latest 3 (three) months after the end of the fiscal year as referred to in Article 90 paragraph (1) of the POJK on BPRS Corporate Governance, namely at the latest March 31 of the following year.
For BPRS that already has a website, the report on the implementation of corporate governance is published on the BPRS website at the latest 3 (three) months after the end of the fiscal year as referred to in Article 90 paragraph (2) of the POJK on BPRS Corporate Governance, namely at the latest March 31 of the following year.
The report on the implementation of corporate governance is approved and signed by the Chief Director and Chief Commissioner of BPRS.
The report on the implementation of corporate governance at least covers:
a. Scope of corporate governance as follows:
1) implementation of duties and responsibilities of the Board of Directors, consisting of the number and composition of the Board of Directors, and follow-up on recommendations from the results of supervision by the Board of Commissioners;
2) implementation of duties and responsibilities of the Board of Commissioners, consisting of the number and composition of the Board of Commissioners, and recommendations of the Board of Commissioners to the Board of Directors;

3) implementation of the duties and responsibilities of the Sharia Supervisory Board (DPS), consisting of the number and composition of DPS members, and DPS recommendations to the Board of Directors regarding the implementation of Sharia Principles; and
4) completeness and implementation of the duties or functions of committees (if any), consisting of:
a) the structure, membership, expertise, and independence of committee members; and b) the work program and realization of the committee's work program. b. The results of the Self-Assessment of Corporate Governance Implementation refer to Appendix III.B, which is an integral part of this Financial Services Authority Circular.
c. Share ownership by Board of Directors members in:
1) the relevant BPRS; and
2) other companies, whether located domestically or abroad.
d. Financial and/or family relationships of Board of Directors members with other Board of Directors members, Board of Commissioners members, and/or shareholders of the relevant BPRS. Financial and/or family relationships are as referred to in items I.3.a and I.3.d. e. Share ownership by Board of Commissioners members in:
1) the relevant BPRS; and
2) other companies, whether located domestically or abroad.
f. Financial and/or family relationships of Board of Commissioners members with Board of Directors members, other Board of Commissioners members, and/or shareholders of the relevant BPRS. Financial and/or family relationships are as referred to in items I.3.a and I.3.d. g. Concurrent positions held by Board of Commissioners members in rural credit banks, other BPRS, and/or other institutions or companies. h. Concurrent positions held by DPS members as DPS members in other Islamic financial institutions.
i. Remuneration packages or other facilities for the Board of Directors, Board of Commissioners, and DPS established based on a General Meeting of Shareholders (GMS) decision within 1 (one) year, consisting of:
1) remuneration, namely income in the form of money, including salaries, allowances, bonuses, and compensation in the form of shares; and
2) other facilities, namely non-monetary benefits received, including housing, transportation, health, and telecommunications facilities, which may or may not be owned.
j. Ratio of highest and lowest salaries, namely:
1) "salary" refers to the rights of the Board of Directors, Board of Commissioners, DPS, and employees received and stated in monetary form as compensation from the BPRS to the Board of Directors, Board of Commissioners, DPS, and employees, established and paid according to employment agreements, consensus, or regulatory provisions, including allowances for the Board of Directors, Board of Commissioners, DPS, and employees and their families for work and/or services performed;
2) the ratio of highest and lowest salaries, in a comparative scale covering:
a) the ratio of the highest and lowest salaries of Board of Directors members; b) the ratio of the highest and lowest salaries of Board of Commissioners members; c) the ratio of the highest and lowest salaries of DPS members; d) the ratio of the highest and lowest salaries of employees; e) the ratio of the highest salary of Board of Directors members to the highest salary of Board of Commissioners members; and f) the ratio of the highest salary of Board of Directors members to the highest salary of employees. k. Frequency of Board of Commissioners meetings, at minimum covering:
1) the number of meetings held within 1 (one) year;
2) the number of meetings attended physically and/or via teleconference technology, video conferencing, or other electronic media facilities;
3) the attendance of each Board of Commissioners member at each meeting; and
4) the meeting agenda.
l. Frequency of DPS meetings, at minimum covering:
1) the number of meetings held within 1 (one) year;
2) the number of meetings attended physically and/or via teleconference technology, video conferencing, or other electronic media facilities; and
3) the attendance of each DPS member at each meeting.
m. Number of internal fraud incidents, consisting of financial fraud or irregularities committed by Board of Directors members, Board of Commissioners members, permanent employees, and/or non-permanent employees (casual and/or outsourcing), presented as a comparison between the reporting year and the previous year, as well as resolution efforts by the BPRS. Disclosure of internal fraud must at minimum cover:
1) the number of internal fraud incidents that have been resolved;
2) the number of internal fraud incidents currently being resolved internally by the BPRS;
3) the number of internal fraud incidents for which resolution has not been attempted; and
4) the number of internal fraud incidents that have been followed up through legal processes,
as shown in the following table:

n. Number of legal issues, both civil and criminal, faced by the BPRS during the reporting period and submitted through legal processes, as well as resolution efforts, at minimum covering:
1) the number of civil and criminal legal issues faced and which have obtained permanent legal force; and
2) the number of civil and criminal legal issues faced and still in the resolution process, as shown in the following table:

(Unit)
Legal Issues
Number
Civil | Criminal
Obtained Permanent Legal Force | In Resolution Process Total

o. Transactions containing conflicts of interest, at minimum covering the name and position of the party with the conflict of interest, the name and position of the decision-maker for the transaction containing the conflict of interest, the type of transaction, and the transaction value and description, as shown in the following table:

No. | Name and Position of Party with Conflict of Interest | Name and Position of Decision-Maker | Type of Transaction | Transaction Value (Million Rupiah) | Description*) *) if the transaction does not comply with systems and procedures, the description column is filled with "does not comply with systems and procedures" and explains the relationship between the name and position of the party with the conflict of interest and the name and position of the decision-maker.

p. Disbursement of funds for social activities and political activities during the reporting period, at minimum covering the nominal amount and the recipient of the funds.

BPRS must correct the corporate governance implementation report if the Otoritas Jasa Keuangan assessment declares it significantly untrue and/or incomplete as referred to in Article 112 paragraph (4) of the POJK on BPRS Corporate Governance, and resubmit it meeting the provisions referred to in Article 89 paragraph (2) of the POJK on BPRS Corporate Governance.
Included in the correction of the BPRS corporate governance implementation report is the adjustment of the Composite Governance Rating in case there is a difference between the BPRS's self-assessment results and the Otoritas Jasa Keuangan's assessment results.
In the event that the BPRS does not correct the report after 2 (two) written warnings, the BPRS will be subject to administrative sanctions in the form of a fine of Rp10,000,000.00 (ten million rupiah) and/or:
a. a downgrade in the BPRS's health rating; and/or b. the listing of Board of Directors and/or Board of Commissioners members on the list of failing through the competency and propriety test mechanism, as referred to in Article 112 paragraph (4) and paragraph (5) of the POJK on BPRS Corporate Governance.

V. ACTION PLAN FOR CORPORATE GOVERNANCE IMPLEMENTATION

In accordance with Article 81 paragraph (1) and paragraph (2) of the POJK on BPRS Corporate Governance, BPRS is required to prepare and submit an Action Plan for Corporate Governance Implementation offline no later than June 30, 2019, to the Financial Services Authority.
The Action Plan for Corporate Governance Implementation contains steps to be taken by the BPRS to fulfill obligations as regulated in the POJK on BPRS Corporate Governance with completion targets within a specific period.
The Action Plan for Corporate Governance Implementation consists of the type of action plan, fulfillment plan, and fulfillment period, referring to Appendix IV.A, Appendix IV.B, or Appendix IV.C, which are integral parts of this Financial Services Authority Circular.
The types of Action Plans must at minimum consist of:
a. fulfillment of the completeness of the BPRS organizational structure based on core capital as referred to in Article 4 paragraph (1), Article 12 paragraph (1), paragraph (2), Article 23 paragraph (1), Article 24 paragraph (1), paragraph (2), Article 32 paragraph (1), Article 60 paragraph (1), paragraph (2), paragraph (3), Article 67 paragraph (1), and paragraph (2) of the POJK on BPRS Corporate Governance; b. availability of guidelines and work rules for the Board of Directors, Board of Commissioners, and committees as referred to in Article 18, Article 33, and Article 56 of the POJK on BPRS Corporate Governance;
c. availability and adequacy of internal reporting supported by adequate management information systems as referred to in Article 78 of the POJK on BPRS Corporate Governance; and/or
d. availability of written remuneration policies for the Board of Directors, Board of Commissioners, DPS, and BPRS employees as referred to in Article 80 of the POJK on BPRS Corporate Governance.
In accordance with Article 82 paragraph (1) of the POJK on BPRS Corporate Governance, BPRS is required to submit a Report on the Realization of the Action Plan for Corporate Governance Implementation offline every semester to the Financial Services Authority.
The Report on the Realization of the Action Plan for Corporate Governance Implementation consists of the type of action plan, planned fulfillment period, realization period, and fulfillment obstacles, referring to Appendix IV.D, Appendix IV.E, or Appendix IV.F, which are integral parts of this Financial Services Authority Circular.
In the event that there are no targets and/or realization of the action plan during the realization period, the BPRS must still submit the Report on the Realization of the Action Plan for Corporate Governance Implementation as referred to in Article 82 paragraph (2) of the POJK on BPRS Corporate Governance.
Action plans and reports on the realization of action plans related to the establishment of a Risk Management Management Unit (SKMR), a risk management committee, and the appointment of an Executive Official responsible for the implementation of risk management functions (PEMR) as referred to in Appendix IV, which are integral parts of this Financial Services Authority Circular, are prepared in accordance with the action plan and report on the realization of the action plan for BPRS risk management implementation as regulated in the Financial Services Authority Circular regarding the implementation of risk management for Sharia Rural Financing Banks.

VI. CLOSING

At the time this Financial Services Authority Circular takes effect, the Bank Indonesia Circular Number 15/22/DPbS dated June 27, 2013, regarding Guidelines for the Implementation of Duties and Responsibilities of the Sharia Supervisory Board of Sharia Rural Financing Banks, is declared invalid. The provisions in this Financial Services Authority Circular take effect on the date of establishment.

Established in Jakarta on June 28, 2019
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HERU KRISTIYANA

Copy is in accordance with the original
Legal Director 1
Legal Department signed
Yuliana

APPENDIX I
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 13 /SEOJK.03/2019
REGARDING
IMPLEMENTATION OF CORPORATE GOVERNANCE FOR SHARIA RURAL FINANCING BANKS

Copy is in accordance with the original
Legal Director 1
Legal Department signed
Yuliana

INDEPENDENCE DECLARATION LETTER
PT BPRS …..
I, the undersigned:
Name :
Place, date of birth :
Domicile address (copy of ID card/Driver's License attached) :
Electronic address (e-mail) :
Home phone/Mobile phone number :
Position :
Company/institution/organization name :
Company/institution/organization phone number :
Hereby declare that I :

Do not have financial, managerial, shareholding, and/or family relationships with Board of Directors members, Board of Commissioners members, and/or controlling shareholders, or financial and/or shareholding relationships with the BPRS that could influence my ability to act independently.
If it is later found that I have a relationship as referred to in item 1 above, I am willing to resign as an Independent Commissioner and be replaced.
Thus, this is my independence declaration, which I have made truthfully.
(City), (date, month, year)
Stamp Duty
Acknowledged by :
(Nama Lengkap) (Nama Lengkap)
Managing Director of PT BPRS …..

Established in Jakarta on June 28, 2019
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HERU KRISTIYANA

APPENDIX II
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 13 /SEOJK.03/2019
REGARDING
IMPLEMENTATION OF CORPORATE GOVERNANCE FOR SHARIA RURAL FINANCING BANKS

LIST OF APPENDICES
Page
Appendix II.A : Submission Letter of Sharia Supervisory Board Supervision Results Report - 1 -
Appendix II.B : Sharia Supervisory Board Supervision Working Paper on BPRS New Product and Activity Development - 2 -
Appendix II.C : Sharia Supervisory Board Supervision Working Paper on BPRS Activities - 3 -
Appendix II.D : Minutes of the Meeting Discussing Sharia Supervisory Board Examination Results - 5 -

Appendix II.A
Number : …... (City), (date, month, year)
Attachment : ……
To
Financial Services Authority
Attn:
1)
Subject :
Submission of Sharia Supervisory Board Supervision Results Report Semester I/II 2) Year ..…. PT BPRS …… Assalamu’alaikum wr. wb.
Referring to Article 44 paragraph (3) of Financial Services Authority Regulation Number 24/POJK.03/2018 regarding the Implementation of Corporate Governance for Sharia Rural Financing Banks, we hereby submit the Sharia Supervisory Board Supervision Results Report of PT BPRS ...... for Semester I/II 2) Year …... Thus, please be informed. Wassalamu’alaikum wr. wb. SHARIA SUPERVISORY BOARD PT BPRS …… (Full Name) Notes:
1) Regional Office or Financial Services Authority Office covering the BPRS head office.
2) Choose one.

Appendix II.B
Sharia Supervisory Board Supervision Working Paper On BPRS New Product and Activity Development Semester I/II 1) Year …… PT BPRS …… No. Activities Conducted by DPS Supervision Results 2)
1. Requesting explanations from authorized BPRS employees regarding the purpose, characteristics, and akad (contract) used in the development of new products and activities.
Purpose of new product and activity:
(state the purpose of the new product and activity) Characteristics of new product and activity:
Akad used:
(state the akad used for the new product and activity)
2. Examining the akad used in new products and activities.
If there is a fatwa from the National Sharia Council – Indonesian Ulema Council (DSN-MUI) regarding the new product and activity, the Sharia Supervisory Board (DPS) analyzes the compliance of the new product and activity akad with the DSN-MUI fatwa. If there is no DSN-MUI fatwa, the DPS requests a fatwa from DSN-MUI through the BPRS. If there is a DSN-MUI fatwa, explain the DPS's analysis results regarding the compliance of the akad with the DSN-MUI fatwa. If there is no DSN-MUI fatwa, state the documentary evidence of the DPS's proposal to the BPRS regarding the request for a fatwa from DSN-MUI.
3. Studying the requirements, characteristics, and systems and procedures of new products and activities related to the fulfillment of Sharia Principles.
Explain the results of the study on requirements, characteristics, and systems and procedures of new products and activities related to the fulfillment of Sharia Principles.
4. Providing an opinion regarding the fulfillment of Sharia Principles for new products and activities.
Explain the DPS's opinion regarding the fulfillment of Sharia Principles for new products and activities.
Sharia Supervisory Board
No. Name and Position Date Signature
1. (Name)
Chairman
2. (Name)
Member
3. (Name)
Member
Notes:
1) Choose one.
2) In the event that the BPRS does not have new products or activities in the reporting period, the column is filled with "NIHIL" (Nil).

Appendix II.C
Sharia Supervisory Board Supervision Working Paper On BPRS Activities Semester I/II 1) Year …… PT BPRS …… No. Activities Conducted by DPS Supervision Results

Analysis of reports submitted by and/or requested from the Board of Directors, SKP (Compliance Unit) or PE Compliance, and/or SKAI (Internal Audit Unit) or PE Internal Audit to determine the quality of the implementation of the fulfillment of Sharia Principles in BPRS's fund gathering, fund disbursement, and service activities.
State the source of the report or information and its parts that show weaknesses in the implementation of BPRS activities regarding the fulfillment of Sharia Principles.
a. Determination of samples of at least 3 (three) customers per semester for each product, activity, and/or akad for fund gathering, fund disbursement, and BPRS services, including the handling of restructured financing.
1) Fund gathering:
a) Wadiah Savings; b) Mudharabah Savings; and/or c) Mudharabah Deposits.
2) Fund disbursement:
a) Murabahah Financing; b) Istishna’ Financing; c) Musyarakah Financing; d) Mudharabah Financing; e) Ijarah Financing; f) Ijarah Muntahiya Bit Tamlik (IMBT) Financing; g) Mutanaqisah Musyarakah (MMQ) Financing; h) Multijasa Financing; i) Qardh Financing; and/or j) Others.
3) Services.
4) Financing restructuring.
b. Determination of BPRS activities not included in letter a that will be examined, if necessary.
State the samples for each product, activity, and/or akad, as well as BPRS activities to be examined, along with the reasons for sample selection.
a. Examination of transaction documents from customers determined as samples to determine the fulfillment of Sharia Principles, at minimum covering the fulfillment of conditions and pillars in the fund gathering and disbursement akad between the BPRS and customers, including:
1) adequacy and completeness of purchase evidence in murabahah financing;
2) adequacy and completeness of customer business result report evidence financed as the basis for profit calculation for mudharabah financing or musyarakah financing; and
3) determination and imposition of ujrah (fee) on customers for qardh financing products to ensure that the determination of ujrah (fee) is not related to the amount of qardh financing.
State the transaction documents examined and notes on compliance or non-compliance with Sharia Principles for each transaction document examined.
No. Activities Conducted by DPS Supervision Results b. Examination of transaction documents from other BPRS activities to determine the fulfillment of Sharia Principles, if necessary.
4. If necessary, conducting inspections, observations, and requests for information and/or confirmation from BPRS employees and/or customers to strengthen the results of transaction document examinations as referred to in item 3.
If inspections, observations, and requests for information and/or confirmation are conducted from BPRS employees and/or customers, state the activities conducted, the parties from whom information and/or confirmation were requested, and the results obtained.
5. Requesting documentary evidence from the BPRS Board of Directors regarding:
a. calculation and recording of bonus or profit-sharing payments to fund-gathering customers; b. profit-sharing payments to other banks;
c. recording of income from fines, placements in conventional banks, and other non-halal income; and
d. reporting of fund receipts from zakat, infak, sedekah, and wakaf.
State the documents examined and notes on compliance or non-compliance with Sharia Principles for each documentary evidence examined.
6. Providing an opinion regarding the aspect of fulfillment of Sharia Principles for:
a. fund gathering, fund disbursement, services, and other BPRS activities; and b. calculation and recording of bonus or profit-sharing payments to fund-gathering customers, profit-sharing payments to other banks, recording of income from fines, placements in conventional banks, and other non-halal income, as well as reporting of fund receipts from zakat, infak, sedekah, and wakaf. Explain the DPS's opinion regarding the aspect of fulfillment of Sharia Principles for each examination object. Sharia Supervisory Board No. Name and Position Date Signature
1. (Name)
Chairman
2. (Name)
Member
3. (Name)
Member
Notes:
1) Choose one.

Copy is in accordance with the original
Legal Director 1
Legal Department signed
Yuliana

Appendix II.D
Minutes of the Meeting Discussing Sharia Supervisory Board Examination Results PT BPRS …… Number : …...
Day, date : ……
Time : From …… to ……
Place : ……
Meeting Leader : Name …… (Position)
Meeting Participants : 1. Name …… (Position)
2. Name …… (Position)
3. Name …… (Position)
4. Name …… (Position)
5. Name …… (Position)
I. MAIN DISCUSSION POINTS
1. ……
2. ……
3. etc.
II. DISCUSSION RESULTS
1. ……
2. ……
3. etc.
III. CONCLUSIONS AND FOLLOW-UP ACTION PLAN
1. ……
2. ……
3. etc.
Meeting closed at ……
Acknowledged, (City), (date, month, year)
Meeting Leader Notary
(Full Name) (Full Name)
(Position) (Position)

Established in Jakarta on June 28, 2019
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HERU KRISTIYANA

APPENDIX III
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 13 /SEOJK.03/2019
REGARDING
IMPLEMENTATION OF CORPORATE GOVERNANCE FOR SHARIA RURAL FINANCING BANKS

LIST OF APPENDICES
Page
Appendix III.A : Self-Assessment Guidelines for Corporate Governance Implementation - 1 -
Appendix III.B : Self-Assessment Results for Corporate Governance Implementation - 28 -

APPENDIX III.A
Self-Assessment Guidelines for Corporate Governance Implementation A. General Explanation of Self-Assessment Guidelines for Corporate Governance Implementation

The assessment guidelines are divided into assessments of the structure, process, and results of BPRS corporate governance implementation, covering 11 (eleven) assessment factors as referred to in Roman numeral III item 2 of this Financial Services Authority Circular.
The assessment of corporate governance implementation for BPRS is conducted to measure:
a. the adequacy of the BPRS corporate governance structure (governance structure) so that corporate governance implementation yields results in line with the expectations of BPRS Stakeholders. The BPRS Corporate Governance Structure consists of the Board of Directors, Board of Commissioners, DPS, committees, and work units, operational units, and/or relevant employees at the BPRS. The BPRS corporate governance infrastructure at minimum includes policies and procedures, management information systems, and the main duties and functions of each organizational structure; b. the effectiveness of the BPRS corporate governance implementation process (governance process) in accordance with the adequacy of the corporate governance structure and infrastructure for each BPRS; and
c. the results of BPRS corporate governance implementation (governance outcome) at minimum covering:
1) the adequacy of report transparency;
2) compliance with regulatory provisions and Sharia Principles; and
3) the increase or decrease in compliance with regulatory provisions, Sharia Principles, and the resolution of issues faced by the BPRS such as irregularities, misuse, fraud, BMPD violations, or violations of relevant provisions regarding BPRS reports to the Financial Services Authority.

B. Procedure for Filling Out the Self-Assessment Work Sheet for Governance Implementation

Each Sharia Rural Bank (BPRS) fills out the Self-Assessment Work Sheet for Governance Implementation, which consists of 11 (eleven) governance implementation assessment factors. Each assessment factor is divided into governance structure and infrastructure, governance implementation process, and governance implementation results. The work sheet is filled out by placing a checkmark (√) in the Implementation Scale column corresponding to each criterion or indicator.
Next, the governance implementation assessment is conducted using the Implementation Scale, where the value scale used for each criterion or indicator ranges from 1 to 5, with the following provisions:
a. Value 5 for a checkmark (√) in the NB (Not Good) column when the criterion or indicator is not fully implemented or fulfilled; b. Value 4 for a checkmark (√) in the IB (Insufficiently Good) column when the criterion or indicator is not mostly implemented or fulfilled;
c. Value 3 for a checkmark (√) in the FG (Fairly Good) column when the criterion or indicator is partially implemented or fulfilled;
d. Value 2 for a checkmark (√) in the G (Good) column when the criterion or indicator is mostly implemented or fulfilled; or e. Value 1 for a checkmark (√) in the VG (Very Good) column when the criterion or indicator is fully implemented or fulfilled.
After filling out using the values as referred to in item 2, the values for each criterion or indicator are summed and averaged based on governance structure and infrastructure, governance implementation process, and governance implementation results for each assessment factor.
The average value as referred to in item 3 is multiplied by 50% for the governance structure and infrastructure weight, 40% for the governance implementation process weight, and 10% for the governance implementation results weight.
The multiplication results as referred to in item 4 are summed to obtain the value for each assessment factor.
The value for each assessment factor as referred to in item 5 is multiplied by the assessment factor weight as shown in Table 1.

Table 1. Weight of Governance Implementation Assessment Factors for BPRS

No. Factor	Weight (%) BPRS A	Weight (%) BPRS B	Weight (%) BPRS C	Weight (%) BPRS D
1. Implementation of Duties and Responsibilities of the Board of Directors	20
2. Implementation of Duties and Responsibilities of the Board of Commissioners		15	15	12.5
3. Implementation of Duties and Responsibilities of the Sharia Supervisory Board (SSB)		10	10	10
4. Completeness and Implementation of Duties or Functions of Committees			2.5	2.5
5. Implementation of Sharia Principles in BPRS Activities		7.5	7.5	7.5
6. Handling of Conflicts of Interest		7.5	7.5	7.5
7. a. Implementation of Compliance Function; b. Implementation of Internal Audit Function; c. Implementation of External Audit Function		7.5; 7.5; 0	7.5; 7.5; 0	7.5; 7.5; 2.5
8. Implementation of Risk Management, Including Internal Control System 5)		7.5	7.5	7.5
9. Maximum Limit on Fund Disbursement		5	5	5
10. BPRS Business Plan		5	5	5
11. Transparency of Financial and Non-Financial Conditions		7.5	7.5	7.5
Total	100	100	100	100

Notes:
1) BPRS A: BPRS with total assets less than Rp10,000,000,000.00 (ten billion rupiah).
2) BPRS B: BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah) and total assets of at least Rp10,000,000,000.00 (ten billion rupiah).
3) BPRS C: BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah) and less than Rp80,000,000,000.00 (eighty billion rupiah).
4) BPRS D: BPRS with core capital of at least Rp80,000,000,000.00 (eighty billion rupiah).
5) Implementation of risk management, including internal control system, is not assessed until the obligation to implement risk management for BPRS becomes effective according to the phasing based on the Financial Services Authority Regulation regarding risk management implementation for Sharia Rural Banks. If the implementation of risk management, including internal control system, is not assessed, the total weight is 92.5%.

The values for each factor that have been multiplied by the weights as referred to in item 5 are summed up to obtain the Composite Value.
After obtaining the Composite Value as referred to in item 7, the BPRS determines the Composite Governance Rating as shown in Table 2.

Table 2. Composite Governance Rating

Composite Value	Composite Governance Rating
1.0 ≤ Composite Value < 1.8	Very Good
1.8 ≤ Composite Value < 2.6	Good
2.6 ≤ Composite Value < 3.4	Fairly Good
3.4 ≤ Composite Value < 4.2	Insufficiently Good
4.2 ≤ Composite Value < 5.0	Not Good

If at least one assessment factor (out of eleven assessment factors) receives a Not Good (5) value, the Composite Governance Rating that the BPRS can achieve is at most Fairly Good, even if the final self-assessment result for the Composite Governance Rating reaches Good or Very Good.
The notes column is filled with reasons, basis of implementation, or other explanations.
For BPRS with total assets less than Rp10,000,000,000.00 (ten billion rupiah) so that they are not required to audit financial reports by a public accounting firm, but the BPRS financial reports have been audited by a public accounting firm, they still conduct assessment for the factor as referred to in Table 1 No. 7.c and are subject to a weight of 2.5% (two point five percent), so the weight for the factor as referred to in Table 1 No. 11 drops to 5% (five percent).
For BPRS with core capital less than Rp80,000,000,000.00 (eighty billion rupiah) so that they are not required to form an Audit Committee and/or Risk Monitoring Committee but form an Audit Committee and/or Risk Monitoring Committee, they still do not conduct assessment against the factor as referred to in Table 1 No. 4.
For BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah) so that they are not required to have an Independent Commissioner, they still fill out the questions for factor No. 2.A.4) on the Self-Assessment Work Sheet for Governance Implementation and are given an Implementation Scale of Good (value 2).
For BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah) so that they are not required to conduct a review of the internal audit function and are not required to submit the review report to the Financial Services Authority, they still fill out the questions for assessment factors No. 7.b.B.2) and No. 7.b.C.3) on the Self-Assessment Work Sheet for Governance Implementation and are given an Implementation Scale of Good (value 2).

C. Self-Assessment Work Sheet for Governance Implementation

No. Criteria or Indicator	Implementation Scale	Notes
	VG (1)	G (2)	FG (3)	IB (4)	NB (5)
1. Implementation of Duties and Responsibilities of the Board of Directors
A. Governance Structure and Infrastructure (S)
1) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):; Number of Board of Directors members is at least 3 (three) people and one of them acts as a Board of Directors member overseeing the compliance function.; ; BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):; Number of Board of Directors members is at least 2 (two) people and one of them acts as a Board of Directors member overseeing the compliance function.
2) All Board of Directors members reside near the location of the BPRS head office.
3) The majority of Board of Directors members do not have family or in-law relationships up to the second degree with other Board of Directors members and/or Board of Commissioners members of the respective BPRS.
4) Each Board of Directors member obtains approval from the Financial Services Authority and is appointed through the General Meeting of Shareholders (GMS). In the event that the BPRS extends the term of office of Board of Directors members, the GMS determining the extension of the term of office of Board of Directors members is held before the term of office expires.
5) Board of Directors members do not hold concurrent positions as Board of Directors members, Board of Commissioners members, SSB members, or Executive Officials at financial institutions, business entities, or other institutions.
6) The Board of Directors does not use individual advisors and/or professional service providers as consultants unless they meet the requirements, namely:; a. for projects that are special in nature and based on their characteristics require the presence of consultants, such as information technology projects with specific time targets;; b. based on a clear agreement that at least covers the scope of work, responsibilities, products generated, as well as the duration and cost of the work; and; c. the consultant is an Independent Party that has the qualifications to work on special projects.
7) The Board of Directors has binding work guidelines and regulations for each Board of Directors member that include at least regulations on work ethics, working hours, and meeting arrangements.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 7
Multiplied by Governance Structure and Infrastructure Weight (S): 50%
B. Governance Implementation Process (P)
1) The Board of Directors carries out duties and responsibilities professionally and does not grant general power of attorney that could result in the transfer of duties, authority, and responsibilities to other parties.
2) The Board of Directors follows up on audit findings and/or recommendations from Internal Audit (SKAI) or External Audit (PEAI), external auditors, and supervision results from the Board of Commissioners, SSB, Financial Services Authority, and/or other competent authorities in accordance with applicable regulations.
3) The Board of Directors provides accurate, relevant, and timely data and information to the Board of Commissioners and SSB.
4) Decision-making at Board of Directors meetings for each policy and strategic decision is conducted based on deliberation for consensus or based on the BPRS Articles of Association in the event that consensus is not reached.
5) The Board of Directors does not utilize the BPRS for personal, family, and/or other parties' interests that can harm or reduce BPRS profits, and does not take and/or receive personal profits from the BPRS other than remuneration and other facilities determined based on GMS decisions, considering fairness and/or compliance with applicable regulations.
6) The Board of Directors provides funds and prepares education and training plans that support the implementation of duties and responsibilities at all levels or organizational tiers sustainably, including by increasing BPRS employees' participation in education and/or training to develop individual quality.
7) Board of Directors members are able to apply their competencies in carrying out duties and responsibilities, including through understanding of regulations regarding prudential principles and Sharia Principles.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 7
Multiplied by Governance Implementation Process Weight (P): 40%
C. Governance Implementation Results (H)
1) The Board of Directors' performance of duties is accounted for to shareholders through the GMS.
2) BPRS policies that are strategic in the field of human resources are disclosed by the Board of Directors to employees.
3) Board of Directors meeting minutes for each policy and strategic decision are made by the Board of Directors and documented in accordance with applicable regulations, and dissenting opinions that occur in Board of Directors meetings are disclosed.
4) There is an increase in the knowledge, expertise, and abilities of Board of Directors members and all employees in managing the BPRS, demonstrated by, among others, improved BPRS performance, resolution of problems faced by the BPRS, and achievement of results according to Stakeholder expectations.
5) Governance implementation reports are submitted by the Board of Directors to shareholders and at least to the Financial Services Authority, BPRS associations in Indonesia, and Stakeholders through internal media owned by the BPRS.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 5
Multiplied by Governance Implementation Results Weight (H): 10%
Summation S + P + H
Total Assessment Factor No. 1
Multiplied by Factor No. 1 Weight: 20%

No. Criteria or Indicator	Implementation Scale	Notes
	VG (1)	G (2)	FG (3)	IB (4)	NB (5)
2. Implementation of Duties and Responsibilities of the Board of Commissioners
A. Governance Structure and Infrastructure (S)
1) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):; Number of Board of Commissioners members is at least 3 (three) people.; ; BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):; Number of Board of Commissioners members is at least 2 (two) people.
2) The number of Board of Commissioners members does not exceed the number of Board of Directors members.
3) At least 1 (one) Board of Commissioners member resides near the location of the BPRS head office.
4) BPRS with core capital of at least Rp80,000,000,000.00 (eighty billion rupiah):; Number of Independent Commissioners is at least 50% (fifty percent) of the number of Board of Commissioners members.; ; BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah) and less than Rp80,000,000,000.00 (eighty billion rupiah):; Number of Independent Commissioners is at least 1 (one) person.; ; BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):; Not required to have Independent Commissioners, so a value of 2 is given.
5) Independent Commissioners do not have financial, managerial, shareholding, and/or family relationships with Board of Directors members, Board of Commissioners members, and/or controlling shareholders, or financial and/or shareholding relationships with the respective BPRS that can influence their ability to act independently.
6) Each Board of Commissioners member obtains approval from the Financial Services Authority and is appointed through the GMS. In the event that the BPRS extends the term of office of Board of Commissioners members, the GMS determining the extension of the term of office of Board of Commissioners members is held before the term of office expires.
7) The Board of Commissioners does not hold concurrent positions as Board of Commissioners members of rural credit banks or other BPRS and/or as Board of Commissioners members, Board of Directors members, and/or Executive Officials at non-bank institutions or companies in more than 2 (two) other companies.
8) The majority of Board of Commissioners members do not have family or in-law relationships up to the second degree with other Board of Commissioners members or Board of Directors members.
9) The Board of Commissioners has binding work guidelines and regulations for each Board of Commissioners member that include at least regulations on work ethics, working hours, and meeting arrangements.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 9
Multiplied by Governance Structure and Infrastructure Weight (S): 50%
B. Governance Implementation Process (P)
1) The Board of Commissioners supervises the implementation of duties and responsibilities of the Board of Directors and provides advice to the Board of Directors, including by providing written recommendations or advice related to the fulfillment of BPRS regulations, including prudential principles.
2) In supervising the implementation of duties and responsibilities of the Board of Directors, the Board of Commissioners directs, monitors, and evaluates the implementation of BPRS strategic policies.
3) The Board of Commissioners does not participate in decision-making regarding BPRS activities, except related to the provision of funds to related parties as regulated in applicable regulations regarding the maximum limit on fund disbursement for Sharia Rural Banks and other matters established in applicable regulations as part of the Board of Commissioners' supervisory duties.
4) The Board of Commissioners ensures that the Board of Directors follows up on findings and/or recommendations from Internal Audit (SKAI) or External Audit (PEAI), external auditors, and supervision results from the Board of Commissioners, SSB, Financial Services Authority, and/or other competent authorities in accordance with applicable regulations, including by requesting the Board of Directors to submit documents on the follow-up of findings and/or recommendations.
5) The Board of Commissioners provides sufficient time to carry out duties and responsibilities optimally and holds Board of Commissioners meetings at least 1 (one) time every 3 (three) months attended by all Board of Commissioners members.
6) Decision-making at Board of Commissioners meetings is conducted based on deliberation for consensus or based on the BPRS Articles of Association in the event that consensus is not reached.
7) Board of Commissioners members do not utilize the BPRS for personal, family, and/or other parties' interests that can harm or reduce BPRS profits, and do not take and/or receive personal profits from the BPRS other than remuneration and other facilities determined based on GMS decisions, considering fairness and/or compliance with applicable regulations.
8) Board of Commissioners members monitor reports on the main points of the implementation of duties and responsibilities of Board of Directors members overseeing the compliance function that require Board of Directors follow-up.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of questions: 8
Multiplied by Governance Implementation Process Weight (P): 40%
C. Governance Implementation Results (H)
1) Board of Commissioners meeting minutes are made by the Board of Commissioners and documented in accordance with applicable regulations, and dissenting opinions that occur in Board of Commissioners meetings are disclosed.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 1
Multiplied by Governance Implementation Results Weight (H): 10%
Summation S + P + H
Total Assessment Factor No. 2
Multiplied by Factor No. 2 Weight; BPRS A, B, & C: 15%; BPRS D: 12.5%

No. Criteria or Indicator	Implementation Scale	Notes
	VG (1)	G (2)	FG (3)	IB (4)	NB (5)
3. Implementation of Duties and Responsibilities of the Sharia Supervisory Board (SSB)
A. Governance Structure and Infrastructure (S)
1) The number of Sharia Supervisory Board (SSB) members is at least 2 (two) people and at most 3 (three) people.
2) SSB members do not hold concurrent positions as SSB members at more than 4 (four) other Sharia financial institutions.
3) SSB members receive work facilities.
4) SSB has at least 1 (one) BPRS employee assigned to support the implementation of SSB duties and responsibilities.
5) Each SSB member obtains approval from the Financial Services Authority and is appointed through the GMS.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 5
Multiplied by Governance Structure and Infrastructure Weight (S): 50%
B. Governance Implementation Process (P)
1) The appointment and/or replacement of SSB members considers the recommendation of the Remuneration and Nomination Committee (if any) and obtains approval from the GMS.
2) SSB carries out duties and responsibilities in accordance with Good Governance.
3) In carrying out duties and responsibilities, the SSB provides advice and suggestions to the Board of Directors and supervises BPRS activities to ensure compliance with Sharia Principles.
4) SSB members provide sufficient time to carry out duties and responsibilities optimally.
5) SSB holds SSB meetings at least 1 (one) time every 3 (three) months.
6) Decision-making at SSB meetings is conducted based on deliberation for consensus or can be based on the consideration of the DSN-MUI in the event that consensus is not reached.
7) SSB members do not utilize the BPRS for personal, family, and/or other parties' interests that harm or reduce BPRS profits, and do not take and/or receive personal profits from the BPRS other than remuneration and other facilities determined based on GMS decisions, considering fairness and/or compliance with applicable regulations.
Calculation:
Sum of checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5
Multiplication result for each Implementation Scale
Total value for all Implementation Scales
Average calculation divided by number of criteria or indicators: 7
Multiplied by Governance Implementation Process Weight (P): 40%
C. Governance Implementation Results (H)
1) SSB supervision result reports are submitted to the Financial Services Authority every semester.
2) SSB supervision result reports are submitted to the Financial Services Authority at the latest 2 (two) months after the end of the relevant semester.
3) SSB meeting minutes are made by the SSB and documented in accordance with applicable regulations, and dissenting opinions that occur in SSB meetings are disclosed.
4) Concurrent positions as SSB members at other Sharia financial institutions and

No. Criteria or Indicator
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) remuneration and other facilities established based on the decision of the General Meeting of Shareholders (GMS) are disclosed in the corporate governance implementation report.
5) There is an increase in the knowledge, expertise, and capabilities of the Sharia Supervisory Board (DPS) members in supervising the conformity of BPRS activities with Sharia Principles, demonstrated among other things by improved BPRS performance through a decrease in violations of Sharia Principles and the resolution of issues related to violations of Sharia Principles.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 5 Multiplied by the weight of Corporate Governance Implementation Results (H) : 10% Sum of S + P + H Total Assessment Factor No. 3 Multiplied by the weight of Factor No. 3: 10% No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5)
4. Completeness and Execution of Committee Duties or Functions (for BPRS with core capital of at least Rp80,000,000,000.00 (eighty billion rupiah))
A. Corporate Governance Structure and Infrastructure (S)
1) BPRS has an Audit Committee and a Risk Monitoring Committee with committee membership as regulated in the Financial Services Authority Regulation regarding the implementation of corporate governance for Sharia Rural Financing Banks.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 1 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) The Audit Committee monitors and evaluates the implementation of the internal audit function.
2) The Risk Monitoring Committee monitors and evaluates the implementation of the risk management function.
3) The Board of Commissioners ensures that the formed committees execute their duties effectively, among other things, in accordance with guidelines and rules of procedure.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5) Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 3 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) Recommendations regarding the implementation of the internal audit and risk management functions are provided by the Audit Committee and Risk Monitoring Committee to the Board of Commissioners for follow-up by the BPRS Board of Directors.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 1 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 4 Multiplied by the weight of Factor No. 4 BPRS A, B, & C: 0% BPRS D: 2.5% No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5)
5. Implementation of Sharia Principles in BPRS Activities
A. Corporate Governance Structure and Infrastructure (S)
1) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
SKP is supported by employees who have knowledge and/or understanding in the field of Sharia banking operations.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
PE Kepatuhan has knowledge and/or understanding in the field of Sharia banking operations.
2) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
SKAI is supported by employees who have knowledge and/or understanding in the field of Sharia banking operations.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
PEAI has knowledge and/or understanding in the field of Sharia banking operations.
3) Human resources conducting fund collection, fund disbursement, and BPRS service provision activities have knowledge and/or understanding regarding Sharia banking products and/or activities.
No. Criteria or Indicator
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5)
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 3 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) The process of developing new products and/or activities considers fatwas from the National Sharia Council-Indonesian Ulema Council (DSN-MUI) and obtains DPS opinions.
2) The implementation of BPRS fund collection, fund disbursement, and service provision activities is in accordance with DSN-MUI fatwas and DPS opinions.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 2 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) Standard operating procedures in BPRS fund collection, fund disbursement, and service provision activities are in accordance with Sharia Principles.
2) Internal audit results reports show no violations of Sharia Principles.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 2 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 5 Multiplied by the weight of Factor No. 5: 7.5% No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5)
6. Handling Conflicts of Interest
A. Corporate Governance Structure and Infrastructure (S)
1) BPRS has internal policies and systems and procedures for resolving conflicts of interest that bind every member of the Board of Directors, Board of Commissioners, DPS members, and BPRS employees, as well as administration for recording, documenting, and disclosing conflicts of interest in meeting minutes.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5) Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 1 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) In the event of a conflict of interest, members of the Board of Directors, members of the Board of Commissioners, and Executive Officials do not participate in decision-making in situations and conditions involving such conflicts of interest, or do not take actions that could harm or reduce BPRS profits.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 1 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) Conflicts of interest that could harm or reduce BPRS profits are disclosed in every decision and well-documented.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 1 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 6 Multiplied by the weight of Factor No. 6: 7.5% No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5)
7. a. Implementation of Compliance Function
A. Corporate Governance Structure and Infrastructure (S)
1) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
Board of Directors members overseeing the compliance function must meet the following minimum requirements:
a. do not hold concurrent positions as the Chief Director; and b. do not oversee the fund collection and disbursement operational fields.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
Board of Directors members overseeing the compliance function do not handle fund disbursement.
2) Board of Directors members overseeing the compliance function understand Financial Services Authority regulatory provisions and regulatory provisions related to Sharia banking.
3) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
Compliance function implementation is carried out by forming a Compliance Unit (SKP) that is independent of operational work units.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
Compliance function implementation is carried out by appointing an Executive Official independent of BPRS operations to be responsible for the implementation of the compliance function.
4) BPRS has compliance work guidelines, systems, and procedures drafted and/or updated by the SKP or PE Kepatuhan, and approved by the Board of Directors member overseeing the compliance function.
5) BPRS has internal regulations regarding the duties, authorities, and responsibilities of the SKP or PE Kepatuhan.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 5 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) Board of Directors members overseeing the compliance function establish necessary steps to ensure BPRS meets all internal regulations, regulatory provisions, and Sharia Principles, including submitting reports to the Financial Services Authority and other competent authorities in accordance with regulatory provisions.
2) Board of Directors members overseeing the compliance function make efforts to foster a BPRS compliance culture, among other things, through socialization and/or training regarding BPRS internal regulations, regulatory provisions, and Sharia Principles.
3) Board of Directors members overseeing the compliance function monitor and maintain BPRS compliance with all commitments made by BPRS to the Financial Services Authority and/or other competent authorities in accordance with regulatory provisions, including preventing the BPRS Board of Directors from establishing policies and/or decisions that deviate from
No. Criteria or Indicator
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) regulatory provisions.
4) SKP or PE Kepatuhan ensures that all policies, regulations, systems, procedures, and business activities conducted by BPRS are in accordance with regulatory provisions and Sharia Principles.
5) SKP or PE Kepatuhan evaluates and/or recommends the updating and refinement of policies, regulations, systems, and procedures owned by BPRS to be in accordance with regulatory provisions and Sharia Principles.
6) Board of Directors members overseeing the compliance function, and SKP or PE Kepatuhan coordinate with the DPS regarding the implementation of the compliance function concerning Sharia Principles.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of criteria or indicators: 6 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) There is a decrease in the level of BPRS violations of internal regulations, regulatory provisions, and Sharia Principles.
2) Reports on the execution of duties and responsibilities of Board of Directors members overseeing the compliance function are submitted periodically to the Chief Director with a copy to the Board of Commissioners. In the event that the Board of Directors member overseeing the compliance function is the Chief Director, the report on the execution of duties and responsibilities is submitted to the Board of Commissioners.
3) Special reports from Board of Directors members overseeing the compliance function are submitted to the Financial Services Authority in the event of Board of Directors policies and/or decisions that deviate from regulatory provisions.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 3 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 7.a Multiplied by the weight of Factor No. 7.a: 7.5% No. Criteria or Indicator Implementation Scale SB Description (1) B (2) CB (3) KB (4) TB (5)
7. b. Implementation of Internal Audit Function
A. Corporate Governance Structure and Infrastructure (S)
1) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
BPRS forms an Internal Audit Unit (SKAI).
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
BPRS appoints an Internal Audit Executive (PEAI).
2) BPRS has guidelines for the implementation of the internal audit function.
3) SKAI or PEAI is independent of other work units or functions.
4) SKAI or PEAI reports directly to the Chief Director.
5) BPRS has a human resource recruitment and development program for those executing the internal audit function.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 5 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) BPRS implements the internal audit function in accordance with the internal audit function implementation guidelines drafted by BPRS across all aspects and elements of activities that are estimated to directly affect the interests of BPRS and the public.
2) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
BPRS appoints an external party to conduct a review 1 (one) time in 3 (three) years on the work results of SKAI and its compliance with internal audit function implementation standards, as well as improvements to be made, in accordance with regulations as regulated in the POJK Corporate Governance BPRS. BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
Not required to appoint an external party to conduct a review of the internal audit function, thus given a value of 2.
3) The internal audit function is executed effectively and adequately, covering audit preparation, audit program drafting, audit assignment execution, audit result reporting, and follow-up on audit results.
4) BPRS implements periodic and continuous improvement of human resource skills related to the
No. Criteria or Indicator
Implementation Scale
SB Description
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) implementation of the internal audit function.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 4 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) Reports on the execution of the internal audit function are submitted by SKAI or PEAI to the Chief Director and Board of Commissioners with a copy to the Board of Directors member overseeing the compliance function.
2) Reports on the execution of internal audits and key audit results, as well as special reports (in the event of internal audit findings that could disrupt the continuity of BPRS business), are submitted to the Financial Services Authority in accordance with regulations as regulated in the POJK Corporate Governance BPRS.
3) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
Reports on the results of the internal audit function review by external parties are submitted to the Financial Services Authority.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
Reports on the results of the internal audit function review are not required to be conducted and submitted, thus given a value of 2.
4) BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah):
Reports on the appointment or dismissal of the head of SKAI are submitted to the Financial Services Authority.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
Reports on the appointment or dismissal of PEAI are submitted to the Financial Services Authority.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 4 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 7.b Multiplied by the weight of Factor No. 7.b: 7.5% No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5)
7. c. Implementation of External Audit Function
A. Corporate Governance Structure and Infrastructure (S)
1) For BPRS with core capital of at least Rp80,000,000,000.00 (eighty billion rupiah):
BPRS appoints a public accountant and Public Accounting Firm (KAP) registered with the Financial Services Authority and obtains GMS approval, based on the proposal of the Board of Commissioners in accordance with the recommendation of the Audit Committee. For BPRS with core capital less than Rp80,000,000,000.00 (eighty billion rupiah):
BPRS appoints a public accountant and Public Accounting Firm (KAP) registered with the Financial Services Authority and obtains GMS approval, based on the proposal of the Board of Commissioners. Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 1 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) The implementation of annual financial statement audits by BPRS is carried out in accordance with regulations as regulated in the Financial Services Authority Regulation regarding the use of public accountant and public accounting firm services in financial service activities, and regulatory provisions regarding transparency of the financial condition of Sharia Rural Financing Banks.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 1 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) Audit results and management letters describe BPRS issues and are submitted promptly to BPRS by the appointed KAP.
2) The scope of audit results is at least in accordance with the audit scope as regulated in the Financial Services Authority Regulation regarding the use of public accountant and public accounting firm services in financial service activities.
3) KAP audit result reports and management letters are submitted to the Financial Services Authority.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5) Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 3 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 7.c Multiplied by the weight of Factor No. 7.c BPRS A: 0% BPRS B, C, & D: 2.5% No. Criteria or Indicator Implementation Scale Description SB (1) B (2) CB (3) KB (4) TB (5)
8. Implementation of Risk Management, including Internal Control System
A. Corporate Governance Structure and Infrastructure (S)
1) BPRS with core capital of at least Rp80,000,000,000.00 (eighty billion rupiah):
BPRS forms a Risk Management Committee and SKMR.
BPRS with core capital of at least Rp50,000,000,000.00 (fifty billion rupiah) and less than Rp80,000,000,000.00 (eighty billion rupiah):
BPRS forms SKMR.
BPRS with core capital less than Rp50,000,000,000.00 (fifty billion rupiah):
BPRS appoints PEMR.
2) BPRS has risk management policies, risk management procedures, and risk limit determinations.
3) BPRS has an adequate management information system, namely a management information system capable of providing complete, accurate, current, and whole data and information for decision-making related to risk management.
Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing the number of scales or indicators: 3 Multiplied by the weight of Corporate Governance Structure and Infrastructure (S): 50% B. Corporate Governance Implementation Process (P)
1) The Board of Directors at least includes:
a. drafting written policies and guidelines for risk management implementation; b. evaluating and deciding on transactions requiring Board of Directors approval;
c. developing a risk management culture across all organizational levels;
d. ensuring the improvement of human resource competence related to risk management;

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) e. ensuring that the risk management function operates independently; and f. responsible for:
1) implementation of risk management policies; and
2) the overall risk exposure taken by the BPRS.
2) The Board of Commissioners must at least include:
a. approving and evaluating risk management policies; b. ensuring the implementation of risk management by the Board of Directors;
c. evaluating the Board of Directors' accountability for the implementation of risk management policies; and
d. evaluating and deciding on the Board of Directors' requests related to transactions requiring Board of Commissioners' approval.
3) The Sharia Supervisory Board (DPS) must at least include:
a. evaluating risk management policies related to the fulfillment of Sharia Principles; and b. evaluating the Board of Directors' accountability for the implementation of risk management policies related to the fulfillment of Sharia Principles.
4) The BPRS conducts a process of identifying, measuring, monitoring, and controlling risks against all material risk factors.
5) The BPRS implements a comprehensive internal control system.
6) The BPRS applies risk management for all risks mandated as regulated in the Financial Services Authority Regulation regarding the implementation of risk management for Sharia rural financing banks.
7) The Board of Directors develops a risk management culture at all organizational levels and ensures the improvement of human resource competence related to risk management, among others through socialization and/or training regarding risk management.

Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5)
Average calculation by dividing by the number of scales or indicators: 1 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 8 Multiplied by the weight of Factor No. 8: 7.5%

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5)
9. Maximum Limit on Fund Disbursement
A. Corporate Governance Structure and Infrastructure (S)
1) The BPRS has adequate written policies, systems, and procedures related to the maximum limit on fund disbursement (BMPD), including fund disbursement to related parties, groups of facility recipients, and/or large facility recipients, as well as monitoring and problem resolution as an inseparable or separate part of the BPRS financing policy guidelines.

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) in accordance with regulations as regulated in statutory regulations regarding the maximum limit on fund disbursement for Sharia rural financing banks.
2) The BPRS does not violate and/or exceed BMPD as regulated in statutory regulations regarding the maximum limit on fund disbursement for Sharia rural financing banks.

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5)
10. BPRS Business Plan
A. Corporate Governance Structure and Infrastructure (S)
1) The BPRS business plan is prepared by the Board of Directors and approved by the Board of Commissioners in accordance with the BPRS's vision and mission.
2) The BPRS business plan includes short-term, medium-term, and/or long-term strategic plans as regulated in the Financial Services Authority Regulation regarding the BPRS business plan.
3) The BPRS business plan is fully supported by shareholders to strengthen capitalization so that it can support the creation of adequate infrastructure, including human resources, information technology, office networks, policies, systems, and procedures.

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) d. Sharia Principles.
2) The Board of Commissioners conducts supervision over the implementation of the BPRS business plan.

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5)
11. Transparency of Financial and Non-Financial Conditions
A. Corporate Governance Structure and Infrastructure (S)
1) The availability of financial and non-financial reporting systems supported by adequate management information systems and competent human resources to produce complete, accurate, current, and holistic reports.

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5) financial reports, productive asset quality, and other information including the composition of the Board of Directors members, Board of Commissioners members, and DPS members, as well as shareholder composition in accordance with regulations as regulated in statutory regulations regarding the transparency of financial conditions for Sharia rural financing banks.
2) The BPRS prepares an annual report that at least includes general information, annual financial reports, opinions from public accountants on the BPRS annual financial reports (if any), all aspects of transparency and information, and disclosure aspects in accordance with regulations as regulated in statutory regulations regarding the transparency of financial conditions for Sharia rural financing banks.
3) The BPRS implements transparency of information regarding products and/or services and the use of BPRS customer data in accordance with regulations as regulated in statutory regulations regarding the transparency of bank product information and the use of customer personal data, as well as the Financial Services Authority Regulation regarding consumer protection in the financial services sector.
4) The BPRS prepares and presents reports with methods, types, and scope in accordance with regulations as regulated in statutory regulations regarding the transparency of financial conditions for Sharia rural financing banks.

Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale Total value for all Implementation Scales Average calculation by dividing by the number of scales and indicators: 4 Multiplied by the weight of Corporate Governance Implementation Process (P): 40%
C. Corporate Governance Implementation Results (H)
1) Public financial reports are signed by the BPRS Board of Directors by clearly stating names and submitted completely and on time to the Financial Services Authority and/or published in accordance with regulations as regulated in statutory regulations regarding the transparency of financial conditions for BPRS.
2) Reports on the handling and resolution of consumer complaints, complaint reports, and follow-up on services and resolution of consumer complaints are submitted on time in accordance with regulations as regulated in statutory regulations regarding the transparency of bank product information and the use of customer personal data, as well as the Financial Services Authority Regulation regarding consumer protection in the financial services sector.

Total checkmarks (√) on Implementation Scale a x 1 b x 2 c x 3 d x 4 e x 5 Product result for each Implementation Scale

No. Criteria or Indicators
Implementation Scale
Description
SB
(1)
B
(2)
CB
(3)
KB
(4)
TB
(5)
Total value for all Implementation Scales
Average calculation by dividing by the number of scales and indicators: 2 Multiplied by the weight of Corporate Governance Implementation Results (H): 10% Sum of S + P + H Total Assessment Factor No. 11 Multiplied by the weight of Factor No. 11:
BPRS A: 7.5%
BPRS B, C, & D: 5%
Factor 1 2 3 4 5 6 7 8* 9 10 11 Composite Value Total Assessment Factor Composite Predicate *) Note:
Risk management implementation including internal control systems is not assessed until the obligation to implement risk management for BPRS becomes effective according to the phasing based on the Financial Services Authority Regulation regarding the implementation of risk management for BPRS. If the implementation of risk management including internal control systems is not assessed, the total weight is 92.5%. Conclusion Contains the final conclusion for each assessment factor of corporate governance implementation, covering the weaknesses and strengths of each factor.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Yuliana
Appendix III.B
Self-Assessment Results of Corporate Governance Implementation BPRS Name: PT BPRS …… Year: …… Self-Assessment Results of Corporate Governance Implementation Composite Value Composite Rank Analysis Description regarding the conclusion of the BPRS corporate governance implementation assessment considering all assessment factors comprehensively and structurally, covering corporate governance structure and infrastructure, corporate governance implementation process, and corporate governance implementation results. In this description, it must at least explain the identification of problems in the form of weaknesses and causes (root cause), action plans which are corrective actions and implementation time targets, as well as the strengths of corporate governance implementation. (City), (date, month, year) PT BPRS …… President Director Chief Commissioner (Full Name) (Full Name) Determined in Jakarta on June 28, 2019 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed HERU KRISTIYANA

APPENDIX IV
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 13 /SEOJK.03/2019 REGARDING IMPLEMENTATION OF CORPORATE GOVERNANCE FOR SHARIA RURAL FINANCING BANKS

LIST OF APPENDICES
Page.
Appendix IV.A: Action Plan for Corporate Governance Implementation for BPRS with Core Capital of at Least
Rp80,000,000,000.00 (Eighty Billion Rupiah) - 1 -
Appendix IV.B: Action Plan for Corporate Governance Implementation for BPRS
with Core Capital of at Least
Rp50,000,000,000.00 (Fifty Billion Rupiah) and Less Than Rp80,000,000,000.00 (Eighty Billion Rupiah) - 3 -
Appendix IV.C: Action Plan for Corporate Governance Implementation for BPRS
with Core Capital Less Than Rp50,000,000,000.00 (Fifty Billion Rupiah) - 4 -
Appendix IV.D: Report on the Realization of the Action Plan for Corporate
Governance Implementation for BPRS with Core Capital of at Least Rp80,000,000,000.00 (Eighty Billion Rupiah) - 5 -
Appendix IV.E: Report on the Realization of the Action Plan for Corporate
Governance Implementation for BPRS with Core Capital of at Least Rp50,000,000,000.00 (Fifty Billion Rupiah) and Less Than Rp80,000,000,000.00 (Eighty Billion Rupiah) - 7 -
Appendix IV.F: Report on the Realization of the Action Plan for Corporate
Governance Implementation for BPRS with Core Capital Less Than Rp50,000,000,000.00 (Fifty Billion Rupiah) - 9 -

Appendix IV.A
Action Plan for Corporate Governance Implementation for BPRS with Core Capital of at Least Rp80,000,000,000.00 (Eighty Billion Rupiah) A. BPRS Profile BPRS Name: …… Address: …… Telephone Number: …… Core Capital 1): …… B. Action Plan for Corporate Governance Implementation No. Type of Action Plan Fulfillment Plan 2) Fulfillment Period 3)

Completeness of organizational structure based on
core capital:
a. has at least 3 (three) Board of Directors members; b. has a Board of Directors member who oversees the compliance function, who meets the requirements:
1) does not hold a dual role as President Director;
2) does not oversee the operational fields of fund
mobilization and fund disbursement; and
3) understands the Financial Services Authority
Regulations and statutory regulations related to Sharia banking;
c. has at least 3 (three) Board of Commissioners members and at most equal to the number of Board of Directors members;
d. has Independent Commissioners of at least 50% of the number of Board of Commissioners members; e. forms SKAI; f. forms SKMR; 4) g. forms SKP; h. forms a risk management committee; 5)
i. forms an Audit Committee; and
j. forms a Risk Monitoring Committee.
Availability of guidelines and work regulations that include at least regulations on work ethics, working hours, and meeting arrangements:
a. Board of Directors guidelines and work regulations; b. Board of Commissioners guidelines and work regulations;
c. Audit Committee guidelines and work regulations; and
d. Risk Monitoring Committee guidelines and work regulations.
Availability and adequacy of internal reporting supported by an adequate management information system.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, DPS, and BPRS employees.

Note:
1) Based on the position of the report from the last month before submitting the action plan.
2) Fulfillment Plan is filled with what the BPRS will do to fulfill the Type of Action Plan for Corporate Governance Implementation.
3) Fulfillment Period is filled with the target completion time for the Type of Action Plan for Corporate Governance Implementation.
4) Fulfillment Plan and Fulfillment Period related to forming SKMR are filled in accordance with the BPRS Risk Management Implementation Action Plan as regulated in the Financial Services Authority Circular Letter regarding the implementation of risk management for Sharia rural financing banks.
5) Fulfillment Plan and Fulfillment Period related to forming the risk management committee are filled in accordance with the BPRS Risk Management Implementation Action Plan as regulated in the Financial Services Authority Circular Letter regarding the implementation of risk management for Sharia rural financing banks.

Appendix IV.B
Action Plan for Corporate Governance Implementation for BPRS with Core Capital of at Least Rp50,000,000,000.00 (Fifty Billion Rupiah) and Less Than Rp80,000,000,000.00 (Eighty Billion Rupiah) A. BPRS Profile BPRS Name: …… Address: …… Telephone Number: …… Core Capital 1) : …… B. Action Plan for Corporate Governance Implementation No. Type of Action Plan Fulfillment Plan 2) Fulfillment Period 3)

Completeness of organizational structure based on core
capital:
a. has at least 3 (three) Board of Directors members; b. has a Board of Directors member who oversees the compliance function, who meets the requirements:
1) does not hold a dual role as President Director;
2) does not oversee the operational fields of fund
mobilization and fund disbursement; and
3) understands the Financial Services Authority
Regulations and statutory regulations related to Sharia banking;
c. has at least 3 (three) Board of Commissioners members and at most equal to the number of Board of Directors members;
d. has at least 1 (one) Independent Commissioner; e. forms SKAI; f. forms SKMR; 4) g. forms SKP;
Availability of guidelines and work regulations that include at least regulations on work ethics,
working hours, and meeting arrangements:
a. Board of Directors guidelines and work regulations; and b. Board of Commissioners guidelines and work regulations.
Availability and adequacy of internal reporting supported by an adequate management information system.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, DPS, and BPRS employees.

Appendix IV.C
Action Plan for Corporate Governance Implementation for BPRS with Core Capital Less Than Rp50,000,000,000.00 (Fifty Billion Rupiah) A. BPRS Profile BPRS Name: …… Address: …… Telephone Number: …… Core Capital 1): …… B. Action Plan for Corporate Governance Implementation No. Type of Action Plan Fulfillment Plan 2) Fulfillment Period 3)

Completeness of organizational structure based on
core capital:
a. has at least 2 (two) Board of Directors members; b. has a Board of Directors member who oversees the compliance function, who meets the requirements:
1) does not handle fund disbursement; and
2) understands the Financial Services Authority
Regulations and statutory regulations related to Sharia banking;
c. has at least 2 (two) Board of Commissioners members and at most equal to the number of Board of Directors members;
d. appoints PEAI; e. appoints PEMR;
4) and
f. appoints Compliance PE.
Availability of guidelines and work regulations that include at least regulations on work ethics,
working hours, and meeting arrangements:
a. Board of Directors guidelines and work regulations; and b. Board of Commissioners guidelines and work regulations.
Availability and adequacy of internal reporting supported by an adequate management information system.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, DPS, and BPRS employees.

Appendix IV.D
Report on the Realization of the Action Plan for Corporate Governance Implementation for BPRS with Core Capital of at Least Rp80,000,000,000.00 (Eighty Billion Rupiah) Semester I/II 1) Year …… A. BPRS Profile BPRS Name: …… Address: …… Telephone Number: …… Core Capital 2) : …… B. Realization of Action Plan for Corporate Governance Implementation No. Type of Action Plan Fulfillment Period Planned 3) Realization Period 4) Fulfillment Obstacles (if any) 5)

Completeness of organizational structure
based on core capital:
a. has at least 3 (three)
Board of Directors members; b. has a Board of Directors member who oversees the compliance function, who meets the requirements:
1) does not hold a dual role as
President Director;
2) does not oversee the operational
fields of fund mobilization and fund disbursement; and
3) understands the Financial
Services Authority Regulations and statutory regulations related to Sharia banking;
c. has at least 3 (three)
Board of Commissioners members and at most equal to the number of Board of Directors members; d. has Independent Commissioners of at least 50% of the number of Board of Commissioners members; e. forms SKAI; f. forms SKMR; 6) g. forms SKP; h. forms a risk management committee; 7)
i. forms an Audit Committee; and
j. forms a Risk Monitoring
Committee.

No. Action Plan Type
Planned Fulfillment Period 3)
Realization Period 4)
Fulfillment Obstacles (if any) 5)

Availability of guidelines and working procedures that include at least regulations on work ethics, working hours, and meeting arrangements:
a. guidelines and working procedures for the Board of Directors; b. guidelines and working procedures for the Board of Commissioners;
c. guidelines and working procedures for the Audit Committee; and
d. guidelines and working procedures for the Risk Monitoring Committee.
Availability and adequacy of internal reporting supported by adequate management information systems.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, Sharia Supervisory Board (DPS), and BPRS employees.

Notes:
1) Select one.
2) Based on BPRS data as of June 30 for the first semester report and as of December 31 of the previous year for the second semester report.
3) Planned Fulfillment Period is filled with the fulfillment period submitted in the Action Plan for the Implementation of Corporate Governance.
4) Realization Period is filled with the realization period for the type of Action Plan for the Implementation of Corporate Governance that can be fulfilled by the BPRS.
5) Fulfillment Obstacles is filled with obstacles, whether from internal or external factors, faced by the BPRS in fulfilling the Action Plan for the Implementation of Corporate Governance, if any.
6) Planned Fulfillment Period, Realization Period, and Fulfillment Obstacles (if any) related to forming the Risk Management Committee (SKMR) are filled in accordance with the Realization Report of the Action Plan for Risk Management Implementation of BPRS as regulated in the Financial Services Authority Circular Letter regarding the implementation of risk management for Sharia People's Financing Banks.
7) Planned Fulfillment Period, Realization Period, and Fulfillment Obstacles (if any) related to forming the Risk Management Committee are filled in accordance with the Realization Report of the Action Plan for Risk Management Implementation of BPRS as regulated in the Financial Services Authority Circular Letter regarding the implementation of risk management for Sharia People's Financing Banks.

Appendix IV.E
Realization Report of the Action Plan for the Implementation of Corporate Governance For BPRS with Core Capital of at Least IDR 50,000,000,000.00 (Fifty Billion Rupiah) and Less Than IDR 80,000,000,000.00 (Eighty Billion Rupiah) Semester I/II 1) Year ……

A. BPRS Profile
BPRS Name : ……
Address : ……
Telephone Number : ……
Core Capital 2) : ……

B. Realization of the Action Plan for the Implementation of Corporate Governance No. Action Plan Type Planned Fulfillment Period 3) Realization Period 4) Fulfillment Obstacles (if any) 5)

Completeness of organizational structure based on core capital:
a. has at least 3 (three) members of the Board of Directors; b. has a Board of Directors member who oversees the compliance function, meeting the requirements:
1) does not concurrently serve as the President Director;
2) does not oversee the fund collection and fund disbursement operational fields; and
3) understands the regulations of the Financial Services Authority and relevant statutory regulations concerning Sharia banking;
c. has at least 3 (three) members of the Board of Commissioners and at most equal to the number of Board of Directors members;
d. has at least 1 (one) Independent Commissioner; e. establishes the Audit Committee (SKAI); f. establishes the Risk Management Committee (SKMR); 6) g. establishes the Remuneration Committee (SKP);
Availability of guidelines and working procedures that include at least regulations on work ethics, working hours, and meeting arrangements:
a. guidelines and working procedures for the Board of Directors; and b. guidelines and working procedures for the Board of Commissioners.

No. Action Plan Type
Planned Fulfillment Period 3)
Realization Period 4)
Fulfillment Obstacles (if any) 5)

Availability and adequacy of internal reporting supported by adequate management information systems.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, Sharia Supervisory Board (DPS), and BPRS employees.

Appendix IV.F
Realization Report of the Action Plan for the Implementation of Corporate Governance For BPRS with Core Capital Less Than IDR 50,000,000,000.00 (Fifty Billion Rupiah) Semester I/II 1) Year ……

A. BPRS Profile
BPRS Name : ……
Address : ……
Telephone Number : ……
Core Capital 2)
: ……

B. Realization of the Action Plan for the Implementation of Corporate Governance No. Action Plan Type Planned Fulfillment Period 3) Realization Period 4) Fulfillment Obstacles (if any) 5)

Completeness of organizational structure based on core capital:
a. has at least 2 (two) members of the Board of Directors; b. has a Board of Directors member who oversees the compliance function, meeting the requirements:
1) does not handle fund disbursement; and
2) understands the regulations of the Financial Services Authority as well as relevant statutory regulations concerning Sharia banking;
c. has at least 2 (two) members of the Board of Commissioners and at most equal to the number of Board of Directors members;
d. appoints the Head of the Audit Committee (PEAI); e. appoints the Head of the Risk Management Committee (PEMR); 6) and f. appoints the Head of Compliance (PE Kepatuhan).
Availability of guidelines and working procedures that include at least regulations on work ethics, working hours, and meeting arrangements:
a. guidelines and working procedures for the Board of Directors; and b. guidelines and working procedures for the Board of Commissioners.

No. Action Plan Type
Planned Fulfillment Period 3)
Realization Period 4)
Fulfillment Obstacles (if any) 5)

Availability and adequacy of internal reporting supported by adequate management information systems.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, Sharia Supervisory Board (DPS), and BPRS employees.

Notes:
1) Select one.
2) Based on BPRS data as of June 30 for the first semester report and as of December 31 of the previous year for the second semester report.
3) Planned Fulfillment Period is filled with the fulfillment period submitted in the Action Plan for the Implementation of Corporate Governance.
4) Realization Period is filled with the realization period for the type of Action Plan for the Implementation of Corporate Governance that can be fulfilled by the BPRS.
5) Fulfillment Obstacles is filled with obstacles, whether from internal or external factors, faced by the BPRS in fulfilling the Action Plan for the Implementation of Corporate Governance, if any.
6) Planned Fulfillment Period, Realization Period, and Fulfillment Obstacles (if any) related to appointing the Head of the Risk Management Committee (PEMR) are filled in accordance with the Realization Report of the Action Plan for Risk Management Implementation of BPRS as regulated in the Financial Services Authority Circular Letter regarding the implementation of risk management for Sharia People's Financing Banks.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Yuliana

No. Action Plan Type
Planned Fulfillment Period 3)
Realization Period 4)
Fulfillment Obstacles (if any) 5)

Availability and adequacy of internal reporting supported by adequate management information systems.
Availability of written remuneration policies for the Board of Directors, Board of Commissioners, Sharia Supervisory Board (DPS), and BPRS employees.

Notes:
1) Select one.
2) Based on BPRS data as of June 30 for the first semester report and as of December 31 of the previous year for the second semester report.
3) Planned Fulfillment Period is filled with the fulfillment period submitted in the Action Plan for the Implementation of Corporate Governance.
4) Realization Period is filled with the realization period for the type of Action Plan for the Implementation of Corporate Governance that can be fulfilled by the BPRS.
5) Fulfillment Obstacles is filled with obstacles, whether from internal or external factors, faced by the BPRS in fulfilling the Action Plan for the Implementation of Corporate Governance, if any.
6) Planned Fulfillment Period, Realization Period, and Fulfillment Obstacles (if any) related to appointing the Head of the Risk Management Committee (PEMR) are filled in accordance with the Realization Report of the Action Plan for Risk Management Implementation of BPRS as regulated in the Financial Services Authority Circular Letter regarding the implementation of risk management for Sharia People's Financing Banks.

Determined in Jakarta on June 28, 2019
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HERU KRISTIYANA

Lineage: No known changes

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