Implementation of Sharia Governance for Sharia Commercial Banks and Sharia Business Units

To:
The Board of Directors of Sharia Commercial Banks and Conventional Commercial Banks, At your location.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 15/SEOJK.03/2024

CONCERNING

IMPLEMENTATION OF SHARIA GOVERNANCE FOR SHARIA COMMERCIAL BANKS AND SHARIA BUSINESS UNITS

In light of the effectiveness of Financial Services Authority Regulation Number 2 of 2024 concerning the Implementation of Sharia Governance for Sharia Commercial Banks and Sharia Business Units (State Gazette of the Republic of Indonesia Year 2024 Number 4/OJK, Additional State Gazette of the Republic of Indonesia Number 72/OJK), hereinafter referred to as the Sharia Governance POJK, in order to provide guidelines for the implementation of Sharia governance, it is necessary to regulate provisions regarding the implementation of Sharia governance for Sharia Commercial Banks and Sharia Business Units and the fitness and propriety assessment for the Sharia Supervisory Board in this Financial Services Authority Circular as follows:

I. GENERAL PROVISIONS

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

Bank means Sharia Commercial Banks and Sharia Business Units.
Sharia Commercial Bank, hereinafter abbreviated as BUS, is a Sharia bank that conducts business activities based on Sharia principles, which in its activities provides services in payment transactions.
Conventional Commercial Bank, hereinafter abbreviated as BUK, is a bank that conducts business activities conventionally, which in its activities provides services in payment transactions.
Sharia Business Unit, hereinafter abbreviated as UUS, is a working unit of the BUK headquarters that functions as the parent office of offices or units conducting business activities based on Sharia principles, or a working unit at the branch office of a bank located abroad that conducts conventional business activities and functions as the parent office of Sharia sub-branches and/or Sharia units.
Sharia Principles are Islamic legal principles based on fatwas and/or Sharia conformity statements issued by institutions having authority in determining fatwas in the Sharia field.
Board of Directors is the organ of BUS and BUK having UUS that has the authority and full responsibility for the management of the Bank for the interests of the Bank, in accordance with the purpose and objectives of the Bank, and represents the Bank, both inside and outside the court, in accordance with the articles of association.
Board of Commissioners is the organ of BUS and BUK having UUS that is tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.
Sharia Supervisory Board, hereinafter abbreviated as DPS, is a party having the task and function of supervising the implementation of BUS and BUK activities having UUS to ensure compliance with Sharia Principles.
Sharia Governance at the Bank is the structure, process, and mechanism of Bank management to ensure that the Bank's business activities are conducted in accordance with Sharia Principles.
Executive Officials are officials of BUS and BUK having UUS who are directly responsible to Board of Directors members or have significant influence on Bank policy and/or operations.
Principal Parties are parties that own, manage, supervise, and/or have significant influence on financial service institutions.
List of Disqualified Parties, hereinafter abbreviated as DTL, is a list maintained by the Financial Services Authority containing parties prohibited from becoming shareholders, controlling shareholders, Board of Directors members, Board of Commissioners members, DPS members, and Executive Officials in banking based on legislation governing fitness and propriety tests/assessments.

II. SHARIA SUPERVISORY BOARD

A. Implementation of Fitness and Propriety Assessment for DPS

DPS members are Principal Parties of the Bank in accordance with Article 8 paragraph (1) of the Sharia Governance POJK.

Prospective DPS members must obtain approval from the Financial Services Authority through a fitness and propriety assessment before carrying out actions, tasks, and functions as a Principal Party as referred to in Article 8 paragraph (2) of the Sharia Governance POJK.

The implementation of the fitness and propriety assessment for prospective DPS members refers to the fitness and propriety assessment provisions for prospective Board of Commissioners members in accordance with Financial Services Authority Regulation Number 27/POJK.03/2016 concerning Fitness and Propriety Assessment for Principal Parties of Financial Service Institutions (POJK PKK) and Financial Services Authority Circular Letter Number 39/SEOJK.03/2016 concerning Fitness and Propriety Assessment for Prospective Controlling Shareholders, Prospective Board of Directors Members, and Prospective Board of Commissioners Members of Banks (SEOJK PKK).

Further provisions regarding the implementation of the fitness and propriety assessment for prospective DPS members are as follows:

The fitness and propriety assessment is conducted by the Financial Services Authority against prospective DPS members.

a. Prospective DPS members include:

persons who have never been DPS members, nominated to become DPS members;
persons currently serving as DPS members, nominated to become DPS members at another Bank;
persons who have previously served as DPS members, nominated to become DPS members at the same Bank or at another Bank;
Bank Board of Commissioners members nominated to become DPS members at the same Bank;
Bank Board of Directors members nominated to become DPS members at the same Bank;
persons nominated to become DPS members at a Bank resulting from a merger originating from the merging Bank;
persons nominated to become DPS members at a Bank resulting from a merger originating from the surviving Bank, including extension of the term of office;
persons nominated to become DPS members at a Bank resulting from a consolidation originating from the consolidating Bank; and/or
persons who will become DPS members of a BUS resulting from a change of business activity originating from a BUK that changed its business activity to a BUS (conversion).

b. The fitness and propriety assessment is not conducted for the extension of the term of office for DPS members, except for the extension of the term of office as referred to in letter a number 7).

c. The extension of the term of office for DPS members as referred to in letter b is reported to the Financial Services Authority accompanied by a decision of the General Meeting of Shareholders (GMS) that establishes the extension of the term of office in question.

The fitness and propriety assessment is conducted to assess whether prospective DPS members meet the requirements:

a. Integrity
Prospective DPS members must meet integrity requirements including:

legal capacity to perform legal acts referring to the Civil Code;
having good character and morality, at least demonstrated by an attitude of complying with applicable regulations, including never being sentenced for proven criminal offenses within a certain period before nomination.

The term "criminal offense" refers to:
a) criminal offenses in the financial services sector whose sentence has been completed within the last 20 (twenty) years before nomination; b) felony offenses, i.e., criminal offenses listed in the Criminal Code (KUHP) and/or similar foreign KUHP with a prison sentence threat of 1 (one) year or more whose sentence has been completed within the last 10 (ten) years before nomination; and/or c) other criminal offenses with a prison sentence threat of 1 (one) year or more, including corruption, money laundering, narcotics/psychotropics, smuggling, customs, excise, human trafficking, illegal arms trafficking, terrorism, counterfeiting money, in the tax field, in the forestry field, in the environmental field, in the maritime field, and fisheries, whose sentence has been completed within the last 20 (twenty) years before nomination.

In assessing "attitude of complying with applicable regulations," negative records of the concerned party found in law enforcement agencies and/or other authorities are considered;

having a commitment to comply with legislation and support the policies of the Financial Services Authority.
For nominees who have previously been prohibited from becoming Principal Parties, there must be a commitment not to commit and/or repeat acts and/or actions that caused the concerned party, including as a party prohibited from becoming a Principal Party;
having a commitment to the development of healthy Sharia banking; and
not being included as a party prohibited from becoming a Principal Party, among others, the nominee is not listed in the DTL.

b. Competence
Prospective DPS members must meet competence requirements including:

knowledge and experience in the field of Sharia muamalah; and
knowledge in the field of banking or general financial knowledge.

The fulfillment of competence requirements as referred to in numbers 1) and 2) can be proven by:
a) a certificate or letter of completion from educational and training institutions and/or the National Sharia Council - Indonesian Ulema Council regarding education and/or training in the field of Sharia muamalah and in the field of banking and/or general finance; or b) a general banking certificate for the DPS level organized by a professional certification institution in the banking sector registered with the Financial Services Authority.

In addition to the competence requirements as referred to in numbers 1) and 2) above, if the minimum number of DPS members is 3 (three) persons, at least 1 (one) DPS member must have:
i. work experience as an official in a Bank in the compliance function, risk management function, or internal audit function for at least 3 (three) years; and/or
ii. a risk management competence certificate for the Board of Commissioners level organized by a professional certification institution in the banking sector registered with the Financial Services Authority.

The fulfillment of the risk management competence certification requirement as referred to in number ii is carried out in stages, as follows:
a. since January 1, 2025, in the form of a risk management training certificate; and b. since January 1, 2027, in the form of risk management competence certification.

c. Financial Reputation
Prospective DPS members must meet financial reputation requirements including:

not having non-performing loans and/or financing; and
never having been declared bankrupt and/or being a shareholder, Board of Directors member, or Board of Commissioners member declared guilty of causing a company to be declared bankrupt, within the last 5 (five) years before nomination.

The term "non-performing loans and/or financing" includes:

non-performing loans and/or financing listed in the financial information service system or equivalent to the financial information service system;
non-performing loans and/or financing not yet reported by financial service institutions in the financial information service system or equivalent to the financial information service system, but based on research conducted by the Financial Services Authority, such loans and/or financing have met the criteria classified as non-performing according to legislation; and/or
failure to fulfill obligations to settle Securities transactions at Securities Companies.

The term "having non-performing loans and/or financing" means if the prospective DPS:

has non-performing loans and/or financing; and/or
is a controller, Board of Directors member, or Board of Commissioners member of a legal entity that has non-performing loans and/or financing.

In addition to meeting the integrity, competence, and financial reputation requirements above, prospective DPS members must also meet requirements regarding ownership and management/operation of the Bank as regulated in applicable legislation.

Administrative requirements for prospective DPS members include:

a. The Bank's application for approval of prospective DPS members is submitted by the controlling shareholder (PSP)/Board of Directors of the legal entity (in the case of a bank establishment license application) or by Bank Board of Directors members (for Banks that have obtained business licenses) to the Financial Services Authority, accompanied by administrative requirement documents as regulated in these provisions and other regulations governing DPS member requirements, namely:

regulations governing the change of business activity from BUK to BUS;
regulations governing the implementation of integrated governance for Banks; and
regulations governing certification for human resources in banking.

b. The details of the administrative requirement documents are at least as listed in Appendix Letter A, which is an integral part of this SEOJK.

In the event that, in the opinion of the Financial Services Authority, it is deemed necessary, shareholders for the establishment of a new Bank or Bank Board of Directors members for Banks that have obtained business licenses must submit supporting documents for the administrative requirement documents as referred to in number 3.
The submission of administrative requirement documents is regulated as follows:

a. Before the Bank submits administrative requirement documents to the Financial Services Authority in the nomination application, the Bank must first compile a compliance checklist of administrative requirement documents as listed in Appendix Letter E, which is an integral part of this SEOJK, which is conducted by:

the compliance working unit; or
PSP/Board of Directors of the legal entity in the case of a bank establishment license application.

b. The compliance checklist mentioned above is accompanied by an explanation stating that the submitted administrative requirement documents:

are complete and correct, both in quantity and format, and the substance of the submitted administrative requirement documents has complied with the requirements in this SEOJK.
state that the administrative requirements in the form of "statements" and "fill-in lists" have been correctly filled out and signed by the nominated candidate.

c. In the event that the director overseeing the compliance function cannot perform their duties, the compliance checklist is signed by the replacement official as regulated in the provisions regarding the compliance function of commercial banks.

d. In the event that the director overseeing the compliance function has a conflict of interest with the Bank, the compliance checklist is signed by other Board of Directors members.

e. In the event that the fitness and propriety assessment process is conducted during the bank establishment license application, the compliance checklist is signed by the party submitting the application.

f. The compliance checklist is submitted together with the submission of the administrative requirement documents of the nominated candidate.

The procedure for the fitness and propriety assessment is as follows:

a. The procedure for the fitness and propriety assessment is conducted through an administrative assessment.

b. The Bank must first conduct a self-assessment of the fulfillment of integrity, competence, and financial reputation requirements for prospective DPS members to be submitted. The assessment must at least cover:

assessment of track record including sanctions previously given by the Bank;
ownership of non-performing loans/financing or bankruptcy;
educational background, both formal and informal;
achievements achieved in the implementation of duties;
the candidate's ability to hold the position to be held; and
concurrent positions.

The assessment is conducted by the committee performing the nomination function as referred to in Article 15 paragraph (1) of the Sharia Governance POJK. The results of the assessment are submitted to the Financial Services Authority at the time of submitting the prospective DPS member application.

In the event that the nomination of DPS members is conducted during the bank establishment license application, the assessment is conducted by the party submitting the application.

c. In the context of the administrative assessment of prospective DPS members, the Financial Services Authority conducts clarification with the concerned candidate if:

the submitted candidate has negative data or information obtained by the Financial Services Authority;
the submitted candidate does not yet have experience as a DPS member in Indonesian banking;
the submitted candidate has previously served as a DPS member at a Bank with a lower or equal size and complexity (Bank Group based on Core Capital/KBMI) than the nominating Bank; and/or
there are certain considerations by the Financial Services Authority, including health level, risk profile, or significant problems faced by the Bank.

d. The number of prospective DPS members that can be submitted in an application is at most 2 (two) persons for each vacancy, and the determination of the submitted candidates must comply with applicable legislation.

e. The cessation of the fitness and propriety assessment is regulated as follows:

The Financial Services Authority ceases the fitness and propriety assessment of prospective DPS members if, during the assessment, the candidate:
a) is undergoing legal processes; b) is undergoing a fitness and propriety assessment at a financial service institution; and/or c) is undergoing a re-assessment process due to indications of integrity, competence, and/or financial reputation problems at a financial service institution.
The term "undergoing legal processes" means if the prospective DPS member has the status of a suspect or defendant in a criminal case or is undergoing a judicial process related to bankruptcy.
The term "undergoing a fitness and propriety assessment at a financial service institution" means if the prospective DPS member is being submitted as a prospective controlling shareholder, prospective Board of Directors member, prospective Board of Commissioners member, or prospective DPS member at another financial service institution.

The Financial Services Authority ceases the fitness and propriety assessment against nominations other than the first nomination submitted by the financial service institution to the Financial Services Authority, in the event that the nomination could result in a violation of concurrent position regulations.

The term "undergoing a re-assessment process due to indications of integrity, competence, and/or financial reputation problems at a financial service institution" means if the prospective DPS member is undergoing a re-assessment process due to indications of integrity, competence, and/or financial reputation problems in their capacity as a Principal Party.

The Financial Services Authority ceases the fitness and propriety assessment against the concerned nomination submitted by the financial service institution to the Financial Services Authority.

The Financial Services Authority notifies the cessation of the fitness and propriety assessment to the Bank submitting the nomination.
Prospective DPS members whose fitness and propriety assessment is ceased can be submitted again to the Financial Services Authority to become prospective DPS members if the concerned party has completed:
a) legal processes, proven by the existence of:

Order for Termination of Investigation (SP3);
Court Decision that has obtained permanent legal force stating that the concerned party is not guilty; or
Court Decision that has obtained permanent legal force stating that the concerned party is not declared bankrupt; or
b) re-assessment process related to integrity, competence, and/or financial reputation problems at a financial service institution, but it is not proven to have integrity, competence, and/or financial reputation problems.
The results of the fitness and propriety assessment are conducted with:

a. The Financial Services Authority determines the result of the fitness and propriety assessment as Approved or Not Approved.

b. The timeframe for determining the result of the fitness and propriety assessment is at most 30 (thirty) working days after all application documents are received completely.

c. In the event that the fitness and propriety assessment process for prospective DPS members is conducted during the bank establishment license application, change of business activity from BUK to BUS, Bank merger and/or consolidation, the Financial Services Authority provides the determination of the result of the fitness and propriety assessment within a timeframe in accordance with regulations governing the granting of establishment licenses, change of business activity from BUK to BUS, Bank merger and/or consolidation.

d. Prospective DPS members Approved by the Financial Services Authority are declared to meet the requirements to become DPS at the Bank submitting the nomination.

e. The GMS appoints prospective DPS members Approved by the Financial Services Authority within a timeframe of at most 6 (six) months after obtaining approval from the Financial Services Authority.

f. In the event that prospective DPS members Approved by the Financial Services Authority are not appointed within the timeframe as referred to in letter e, the approval issued by the Financial Services Authority becomes invalid.

g. The Bank informs the appointment of DPS members to the Financial Services Authority at most 7 (seven) working days after the effective appointment date, accompanied by the GMS minutes.

h. Prospective DPS members Not Approved by the Financial Services Authority are declared not to meet the requirements to become DPS members at the Bank submitting the nomination, with the provisions:

Prospective DPS members Not Approved by the Financial Services Authority originating from DPS members at other Banks as referred to in item 1.a.2) and originating from the transition of Board of Commissioners members or Board of Directors members as referred to in item 1.a.4) and item 1.a.5), the concerned party can still perform their tasks and functions as DPS members, Board of...

Board of Commissioners, or members of the Board of Directors of the aforementioned Bank, as long as they have not been dismissed from their previous positions in accordance with the Bank's Articles of Association.

Candidates for DPS members who are Not Approved by the Financial Services Authority (OJK) who are currently serving as Executive Officials at the Bank may continue to perform their duties and functions as Executive Officials at the aforementioned Bank as long as they have not been dismissed from their previous positions in accordance with the Bank's Articles of Association.

i. Candidates for DPS members who are Not Approved by the Financial Services Authority but have received approval and been appointed as DPS members by the Bank in accordance with a General Meeting of Shareholders (GMS) decision, the Bank is required to convene a GMS to cancel the appointment of the concerned individual as referred to in Article 26 paragraph (1) of the POJK on Sharia Capital Markets.

The convening of the GMS is carried out within a maximum period of 3 (three) months from the date of the Not Approved determination.

j. The Bank is required to report the cancellation of the appointment of the DPS candidate to the Financial Services Authority as referred to in Article 26 paragraph (2) of the POJK on Sharia Capital Markets.

The reporting of the cancellation of the appointment of the DPS candidate is submitted no later than 7 (seven) working days after the GMS for the cancellation of the concerned appointment.

Re-submission of DPS candidates who have been determined Not Approved is subject to the following provisions:

a. DPS candidates determined Not Approved may be nominated again to the Financial Services Authority no earlier than 6 (six) months from the date of the Not Approved determination by the Financial Services Authority.

b. DPS candidates Not Approved due to competency requirements may be nominated again before 6 (six) months if nominated again for:

the position of DPS member at another Bank with a lower size and complexity.

The size and complexity of Banks are reflected, among others, in the KBMI classification.

Example:
A DPS candidate at a KBMI 3 Bank who is Not Approved by the Financial Services Authority may be nominated again before 6 (six) months if the concerned individual is nominated again as a DPS candidate at a KBMI 1 Bank.

a position at a financial services institution other than a Bank.

Example:
A DPS candidate who is Not Approved by the Financial Services Authority may be nominated again before 6 (six) months if the concerned individual is nominated again as a DPS candidate at an Insurance Company.

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c. Re-submission of candidates as referred to in letter b number 1) may be carried out no earlier than 1 (one) month from the date of the Not Approved determination.

d. Re-submission of DPS candidates determined Not Approved due to competency requirements as referred to in number 1 must be accompanied by supporting documents proving that the candidate being re-submitted has improved their competency.

The procedure for assessing the competence and propriety of DPS candidates for Intermediary Banks and Banks in resolution by the Deposit Insurance Corporation (LPS) is regulated as follows:

a. Intermediary Bank is a commercial bank established by the LPS to be used as a resolution vehicle by accepting the transfer of part or all of the assets and/or liabilities of Banks handled by the LPS, subsequently carrying out banking business activities, and whose ownership will be transferred to other parties.

b. The assessment of competence and propriety for DPS candidates for Intermediary Banks is carried out:

after the Intermediary Bank has carried out business activities; and
before the Intermediary Bank is assessed for its health level by the Financial Services Authority.

c. The request to obtain approval from the Financial Services Authority for DPS candidates for Intermediary Banks and Banks in resolution by the LPS is submitted by the LPS to the Financial Services Authority.

d. The assessment of competence and propriety for DPS candidates for Intermediary Banks and Banks in resolution by the LPS is conducted to assess whether the DPS candidates meet the requirements as referred to in number 2.

e. The administrative document requirements for DPS candidates for Intermediary Banks and Banks in resolution by the LPS that must be submitted refer to the provisions as referred to in number 3 and number 4.

f. The procedure for assessing the competence and propriety of DPS candidates for Intermediary Banks and Banks in resolution by the LPS is carried out through the following steps:

Initial Administrative Assessment
The initial administrative assessment is conducted to determine whether the concerned individual:

a) has non-performing loans and/or financing; and

b) is included as a party prohibited from becoming a Principal Party.

Continued Administrative Assessment.

g. DPS candidates for Intermediary Banks and Banks in resolution by the LPS who meet the requirements based on the results of the initial administrative assessment as referred to in letter f number 1) above will receive temporary approval from the Financial Services Authority, thereby empowering them to carry out actions, duties, and functions as DPS members.

h. DPS candidates for Intermediary Banks and Banks in resolution by the LPS who do not meet the requirements in the initial administrative assessment as referred to in letter f number 1) above will not receive temporary approval from the Financial Services Authority, with the consequence that DPS candidates for Intermediary Banks and Banks in resolution by the LPS are prohibited from carrying out actions, duties, and functions as DPS members.

i. The LPS may submit new DPS candidates for Intermediary Banks and Banks in resolution by the LPS again.

j. The Financial Services Authority notifies the results of the initial administrative assessment as referred to in letter f number 1) above in writing to the LPS.

k. Intermediary Banks or Banks in resolution by the LPS complete all administrative document requirements regarding DPS members who have received temporary approval no later than 1 (one) month from the date of temporary approval from the Financial Services Authority for the purpose of the continued administrative assessment.

l. In carrying out the "continued administrative assessment" as referred to in letter f number 2):

for Intermediary Banks, the provisions as referred to in number 6 letter a, letter c, and letter d apply.
for Banks in resolution by the LPS, the provisions as referred to in number 5, number 6 letter a, letter b, letter c, and letter d apply.

m. The Financial Services Authority determines the final result of the competence and propriety assessment based on the continued administrative assessment as referred to in letter f number 2), as:

Approved; or
Not Approved.

n. The determination of the final result of the competence and propriety assessment is carried out by the Financial Services Authority no later than 6 (six) months from the date of temporary approval and is notified to the LPS and the Intermediary Bank or Bank in resolution by the LPS.

o. DPS members of Intermediary Banks or Banks in resolution by the LPS who are Approved as referred to in letter m number 1) may continue to carry out actions, duties, and functions as DPS members of Intermediary Banks or Banks in resolution by the LPS.

p. DPS members of Intermediary Banks or Banks in resolution by the LPS who are Not Approved as referred to in letter m number 2) then:

the temporary approval that has been issued becomes invalid;
DPS members of Intermediary Banks or Banks in resolution by the LPS are prohibited from carrying out actions as DPS members in accordance with Article 113 paragraph (3) of the Financial Services Authority Regulation Number 5 of 2024 concerning the Determination of Supervisory Status and Handling of Commercial Bank Issues; and

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the LPS cancels the appointment of the concerned individual within a maximum period of 3 (three) months; calculated from the date of the Not Approved determination.

The application letter along with documents as referred to in number 3 and 4 are submitted to:

The Department of Banking Licensing and Banking Crisis Management of the Financial Services Authority with a copy to:

a. The Sharia Banking Department or the Financial Services Authority Office in Jakarta, for Banks with their headquarters in Jakarta or Banten Province; or

b. The local Financial Services Authority Office, for Banks with their headquarters outside Jakarta and Banten Province.

The implementation of re-assessment for DPS members as per Article 8 paragraph (1) of the POJK on Sharia Governance is in accordance with the Financial Services Authority's regulations regarding re-assessment for principal parties of banks applicable to principal parties of managers.

B. Duties, Responsibilities, and Obligations of the DPS

Duties and Responsibilities of the DPS

The DPS is tasked with conducting supervision for the interest of the Bank over the policies and management conducted by the Board of Directors to ensure compliance with Sharia Principles and is responsible for such supervision, as well as providing advice to the Board of Directors, including providing Sharia opinions related to Bank activities as referred to in Article 20 paragraph (1) of the POJK on Sharia Governance, including:

a. Supervision over the policies and management conducted by the Board of Directors to ensure compliance with Sharia Principles, at least:

conducting evaluations of Bank policies and procedures to ensure compliance with Sharia Principles;
reviewing Bank operations to ensure compliance with Sharia Principles; and
directing, monitoring, and evaluating the implementation of Sharia Governance, including the application of Sharia compliance, Sharia risk management, and internal Sharia audit in an integrated manner;

b. Providing advice, including Sharia opinions, to the Board of Directors, at least:

providing recommendations regarding the fulfillment of Sharia Principles based on the results of DPS supervision;
providing opinions on strategic matters and/or matters required by regulations so that they do not conflict with Sharia Principles, including the implementation of banking synergy as referred to in the Financial Services Authority Regulation on Sharia Commercial Banks and recovery plans and action plans as referred to in the Financial Services Authority Regulation on the determination of supervisory status and handling of commercial bank issues;
providing opinions on the development of new products as regulated in the Financial Services Authority Regulation on the implementation of commercial bank products, including:

a) compliance with DSN MUI fatwas;

b) standard operating procedures for new Bank products; and/or

c) results of the review of the concept of agreements/contracts/application forms for new Bank products; and

providing consultation services and opinions to the Sharia compliance function, Sharia risk management function, and internal Sharia audit function;

c. Providing opinions on the fulfillment of Sharia Principles to the supporting committee for the implementation of the Board of Commissioners' duties as referred to in Article 26 of the POJK on Sharia Governance; and

d. Coordinating with fatwa authorities and/or relevant regulators, if necessary.

The DPS may carry out other duties in accordance with its competence. For example, DPS members participate in providing training on Sharia financing agreements together with the function carrying out employee training at the Bank, provided that this does not cause them to neglect the implementation of their main duties and responsibilities as DPS members.

Obligations of DPS Members During Tenure

DPS members during their tenure are required to have integrity, competence, and a good reputation as regulated in Article 8 paragraph (4) of the POJK on Sharia Governance.

a. Having integrity, including:

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

b. Having competence, including:

knowledge and experience in Sharia muamalah; and
knowledge in banking or general financial knowledge.

c. Having a good reputation, including:

not having non-performing loans and/or financing;
never having been declared bankrupt;
never having been a member of the Board of Directors, Board of Commissioners, and/or DPS who was declared guilty of causing a company to be declared bankrupt;
never having been sentenced for committing criminal acts that harm state finances and/or are related to the financial sector;

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their accountability as members of the Board of Directors and/or Board of Commissioners is always accepted by the GMS or always provides accountability as members of the Board of Directors and/or Board of Commissioners to the GMS;
never having caused a company that has obtained a license, approval, or registration from the Financial Services Authority to fail to submit annual reports and/or financial reports to the Financial Services Authority, and/or annual reports and/or financial reports not being approved and/or ratified by the GMS;
supervising and supporting the implementation of healthy Bank management regarding the fulfillment of Sharia Principles; and
maintaining the Bank's reputation.

C. Working Relationship between the DPS, Board of Directors, and Board of Commissioners

The Board of Directors is required to follow up on recommendations from the results of DPS supervision as regulated in Article 29 paragraph (2) of the POJK on Sharia Governance.
The Board of Commissioners is required to ensure that the Board of Directors has followed up on recommendations from the results of DPS supervision as regulated in Article 29 paragraph (3) of the POJK on Sharia Governance.
The DPS coordinates with the Board of Directors member who oversees the Sharia compliance function, Sharia risk management function, and internal Sharia audit function in order to direct, monitor, and evaluate the implementation of the duties of the aforementioned functions.
The DPS receives copies of the results of the implementation of the duties of the Sharia compliance function, Sharia risk management function, and internal Sharia audit function submitted to the Board of Directors member who oversees these functions.

D. Support for the Implementation of Duties and Responsibilities of the DPS

To support the implementation of the duties and responsibilities of the DPS, the Board of Directors is required to:

provide accurate, relevant, and timely data and information to the DPS in the implementation of DPS duties;
ensure the availability and adequacy of internal reporting supported by adequate management information systems to support the DPS duty implementation process, including providing access to management information systems and/or providing all Bank documents and reports; and
provide adequate facilities and infrastructure to support the DPS duty implementation process, for example, workspaces, work equipment, communication equipment, accommodation, and transportation.

To support the implementation of the duties and responsibilities of the DPS, the Bank provides:

Functions or human resources that support the DPS in carrying out its duties, including:

a. secretariat function;

b. Sharia research function; and/or

c. Sharia development function.

The DPS support functions can be a separate work unit or combined with other functions that have similar/duplicate duties and functions, while still observing good governance principles.

The Bank may form a separate committee consisting of, among others, independent parties as a support function for the DPS if necessary, while still observing applicable regulations.
Development of DPS quality in accordance with Financial Services Authority Regulations regarding the development of human resources quality of commercial banks, including:

a. education and/or training in Sharia muamalah;

b. education and/or training in banking operations, finance, accounting, economics, and law, relevant to the implementation of DPS duties and functions; and/or

c. membership in organizations/bodies that support the implementation of DPS duties.

Other facilities.

E. DPS Remuneration

The remuneration policy for DPS members is formulated in accordance with Financial Services Authority Regulations regarding the application of governance in providing remuneration for Sharia commercial banks and Sharia business units. The remuneration policy for DPS members is formulated by considering the risks and complexity of the duties and responsibilities of DPS members and by considering the proportionality against the remuneration of the Board of Commissioners.

The risks associated with the duties and responsibilities of DPS members include, among others, the provision of Sharia opinions on Bank products and business activities, the designation of DPS as principal parties of the Bank, and the addition of DPS duties related to the Sharia governance framework.

The complexity of the duties and responsibilities of DPS members includes, in the implementation of DPS duties, besides considering muamalah fiqh aspects, also considering Bank operational aspects such as accounting, law, and product operations.

With the strengthening of the duties and responsibilities of the DPS in accordance with the POJK on Sharia Governance, Banks review the remuneration policy and evaluate the implementation of DPS remuneration.

Example 1:
Bank A currently has a DPS remuneration ratio to Board of Commissioners remuneration of 20%. With the strengthening of the duties and responsibilities of the DPS in accordance with the POJK on Sharia Governance, Bank A adjusts the DPS remuneration ratio to Board of Commissioners remuneration to 40%.

Example 2:
Bank B currently has a DPS remuneration ratio to Board of Commissioners remuneration of 60%. In providing remuneration, Bank B has considered the duties and responsibilities of the DPS in accordance with the POJK on Sharia Governance, so Bank B maintains the DPS remuneration ratio to Board of Commissioners remuneration at 60%.

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F. DPS Supervision Results Report

The DPS supervision results report is submitted semi-annually, at the end of August for the first semester position and at the end of February for the second semester position.
The scope of the DPS supervision results report covers at least:

a. the results of DPS supervision over the policies and management conducted by the Board of Directors of the Bank related to the application of Sharia Principles;

b. advice and Sharia opinions from the DPS to the Board of Directors of the Bank, including the results of consultation services and opinions provided to the Sharia compliance function, Sharia risk management function, and internal Sharia audit function;

c. opinions on the fulfillment of Sharia Principles provided to the supporting committee for the implementation of the Board of Commissioners' duties; and

d. other duties carried out by the DPS, if any.

The DPS may submit ad-hoc reports to the Financial Services Authority if significant violations of Sharia Principles are found, including those that have the potential to affect the financial condition and/or reputation of the Bank.

Ad-hoc reports include information such as:

a. explanation of the violations of Sharia Principles found;

b. DSN MUI fatwas violated;

c. DPS opinions on violations of Sharia Principles;

d. causes of violations of Sharia Principles;

e. potential impact of violations of Sharia Principles on the Bank; and/or

f. follow-up plans for violations of Sharia Principles.

Submission of DPS supervision results reports to the Financial Services Authority is addressed to:

a. The Sharia Banking Department or the Financial Services Authority Office in Jakarta, for Banks with their headquarters in Jakarta or Banten Province; or

b. The local Financial Services Authority Office, for Banks with their headquarters outside Jakarta and Banten Province,

which is submitted online through the Financial Services Authority reporting system in accordance with the procedures as per the Financial Services Authority Regulations regarding reporting of commercial banks through the Financial Services Authority reporting system.

In the event that the Financial Services Authority reporting system is unavailable or in force majeure circumstances, submission is carried out through the Financial Services Authority letter system.

In the event that the Financial Services Authority letter system is unavailable due to force majeure circumstances, submission is carried out offline to the Financial Services Authority.

III. SHARIA COMPLIANCE FUNCTION

The Sharia Compliance Function is formed by the Bank as a separate work unit under the Board of Directors member who oversees the compliance function.
Considering the complexity and/or scale of the Bank's business, the Sharia Compliance Function may be part of the compliance work unit under the Board of Directors member who oversees the compliance function.
The Director who oversees the compliance function is responsible for the effective implementation of the Sharia Compliance Function in ensuring the fulfillment of Sharia Principles.
The Sharia Compliance Function is supported by an official at least at the Executive Official level who is directly responsible to the Board of Directors member who oversees the compliance function.
The Executive Official as referred to in number 4 must meet the requirements in accordance with the applicable Financial Services Authority regulations for Executive Officials and is required to have knowledge and/or understanding of Sharia banking operations in accordance with Article 37 paragraph 1 of the POJK on Sharia Governance, including knowledge and/or understanding of DSN MUI fatwas in the field of Sharia banking, in order to support the implementation of the Sharia Compliance Function.

The term knowledge and/or understanding of Sharia banking operations includes, among others:

a. having a minimum experience of 2 (two) years in the field of Sharia banking operations;

b. having an educational background in Sharia economics/Sharia finance/Sharia banking; and/or

c. having previously attended training or holding certification in the field of Sharia economics/Sharia finance/Sharia banking from an institution with a good reputation and/or registered with the competent authority.

In assessing the Executive Official as referred to in number 5 in accordance with the Financial Services Authority Regulations on Sharia Commercial Banks and the Financial Services Authority Regulations on Commercial Banks, the Bank conducts consultation or seeks opinions from the DPS.
The Sharia Compliance Function is formed to ensure that the policies, regulations, systems, and procedures, as well as business activities conducted by the Bank, are in accordance with Sharia Principles.

The Sharia Compliance Function has duties and responsibilities including, among others:

a. conducting reviews and providing input on the application of Sharia Principles regarding the effectiveness, adequacy, and compliance of policies, regulations, systems, and procedures with the development of new products and Bank business activities, including profit-sharing distribution policies, Sharia accounting treatment, zakat calculation, and the use of funds that cannot be recognized as income;

b. recommending the revision and improvement of policies, regulations, and systems and procedures owned by the Bank to ensure compliance with Sharia Principles;

c. reviewing documents (including promotional and marketing materials, both for the Bank's own products and those in cooperation with Bank partners) and business transactions, either on its own initiative or upon request from the DPS, Board of Commissioners, or Board of Directors;

d. identifying, measuring, monitoring, and controlling Sharia compliance risks with reference to Financial Services Authority regulations governing the application of risk management for Sharia commercial banks and Sharia business units;

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e. develop a sustainable Sharia compliance program in accordance with a structured plan; and f. perform other tasks related to the Sharia compliance function. For example, ensuring the Bank's compliance with commitments made by the Bank to the Financial Services Authority and/or other competent supervisory authorities.

The Sharia compliance function coordinates with the Sharia Supervisory Board (DPS) in carrying out its duties and responsibilities as referred to in number 7, with the knowledge of the Director who oversees the compliance function.
The Sharia compliance function in a Sharia Business Unit (BUK) that has a Sharia Banking Unit (UUS) may coordinate with the Director of the BUK who oversees the UUS in carrying out its duties and responsibilities as referred to in number 7, with the knowledge of the Director who oversees the compliance function.

IV. SHARIA RISK MANAGEMENT FUNCTION

The Sharia risk management function is established by the Bank as an independent work unit under a Board of Directors member who oversees the risk management function.
Considering the complexity and/or scale of the Bank's business, the Sharia risk management function may be part of the risk management work unit under a Board of Directors member who oversees the risk management function.
The Director who oversees the risk management function is responsible for the effectiveness of the implementation of the Sharia risk management function in ensuring compliance with Sharia Principles.
The Sharia risk management function is supported by an executive official at least at the level of Executive Official who is directly responsible to the Board of Directors member who oversees the risk management function.
The Executive Official as referred to in number 4 must meet the requirements according to the Financial Services Authority regulations applicable to Executive Officials and must have knowledge and/or understanding of Sharia banking operations in accordance with Article 38 paragraph (1) of the POJK on Sharia Governance, including knowledge and/or understanding of DSN MUI fatwas in the field of Sharia banking, in order to support the implementation of the Sharia risk management function.

The meaning of knowledge and/or understanding regarding Sharia banking operations includes, among others:
a. having a minimum of 2 (two) years of experience in the field of Sharia banking operations; b. having an educational background in the field of Sharia economics/Sharia finance/Sharia banking; and/or
c. having attended training or holding certification in the field of Sharia economics/Sharia finance/Sharia banking from an institution with a good reputation and/or registered with the competent authority.

In evaluating the Executive Official as referred to in number 4 in accordance with Financial Services Authority Regulations regarding Sharia Commercial Banks and Financial Services Authority Regulations regarding Commercial Banks, the Bank conducts consultation or seeks the opinion of the Sharia Supervisory Board (DPS).

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The Sharia risk management function is established to ensure compliance with Sharia Principles in the application of the Bank's risk management in operations, business, and all Bank activities. The Sharia risk management function has duties and responsibilities including:
a. monitoring the implementation of risk management strategies approved by the Board of Directors, specifically risks related to compliance with Sharia Principles; b. identifying, measuring, monitoring, and reporting risk exposures related to compliance with Sharia Principles in operations, business, and all Sharia banking activities;
c. integrating risk considerations related to compliance with Sharia Principles with risk management in the bank;
d. establishing risk mitigation steps related to compliance with Sharia Principles; e. periodic review of risk management processes related to compliance with Sharia Principles; and f. reviewing new product proposals, particularly regarding risk management aspects related to compliance with Sharia Principles.
The Sharia risk management function coordinates with the Sharia Supervisory Board (DPS) in carrying out its duties and responsibilities as referred to in number 7, with the knowledge of the Director who oversees the risk management function.
The Sharia risk management function in a Sharia Business Unit (BUK) that has a Sharia Banking Unit (UUS) may coordinate with the Director of the BUK who oversees the UUS in carrying out its duties and responsibilities as referred to in number 7, with the knowledge of the Director who oversees the risk management function.

V. SHARIA INTERNAL AUDIT FUNCTION

The Sharia internal audit function is established by the Bank as an independent work unit under a Board of Directors member who oversees the internal audit function.
Considering the complexity and/or scale of the Bank's business, the Sharia internal audit function may be part of the internal audit work unit under a Board of Directors member who oversees the internal audit function.
The Director who oversees the internal audit function is responsible for the effectiveness of the implementation of the Sharia internal audit function in ensuring compliance with Sharia Principles.
The Sharia internal audit function is supported by an executive official at least at the level of Executive Official who is directly responsible to the Board of Directors member who oversees the internal audit function.
The Executive Official as referred to in number 4 must meet the requirements according to the Financial Services Authority regulations applicable to Executive Officials and must have knowledge and/or understanding of Sharia banking operations in accordance with Article 39 paragraph (1) of the POJK on Sharia Governance, including knowledge and/or understanding of DSN MUI fatwas in the field of Sharia banking, in order to support the implementation of the Sharia internal audit function.

b. having an educational background in the field of Sharia economics/Sharia finance/Sharia banking; and/or
c. having attended training or holding certification in the field of Sharia economics/Sharia finance/Sharia banking from an institution with a good reputation and/or recognized by the competent authority.

In evaluating the Executive Official as referred to in number 5 in accordance with Financial Services Authority Regulations regarding Sharia Commercial Banks and Financial Services Authority Regulations regarding Commercial Banks, the Bank conducts consultation or seeks the opinion of the Sharia Supervisory Board (DPS).
The Sharia internal audit function is established to provide independent and objective assurance and consultation regarding the application of Sharia Principles in the implementation of Bank management, by evaluating and improving the effectiveness of risk management, controls, and the Bank's governance processes. The Sharia internal audit function has duties and responsibilities including:
a. preparing and establishing clearly documented audit plans to guide Sharia internal auditors in collecting information, audit procedures, and audit assessments, in consultation with the Sharia Supervisory Board (DPS) and considering audit committee recommendations; b. conducting structured and systematic Sharia internal audit activities in coordination with the Sharia Supervisory Board (DPS) and the audit committee;
c. making analyses and assessments regarding compliance with Sharia Principles in finance, accounting, operations, and other activities through Sharia internal audits;
d. providing improvement suggestions and objective information about inspected activities at all management levels regarding compliance with Sharia Principles; e. communicating Sharia internal audit results to the Sharia Supervisory Board (DPS) and the Board of Directors, detailing Sharia internal audit findings and recommendations for improvement actions, as well as auditee responses and action plans; f. submitting Sharia internal audit results reports regarding the implementation of compliance with Sharia Principles to the Sharia Supervisory Board (DPS), the Director who oversees the internal audit function, and the Board of Commissioners; and g. monitoring improvement actions and reporting the results of monitoring follow-up actions on Sharia internal audit findings to the Sharia Supervisory Board (DPS), the Board of Directors, and the Board of Commissioners, with copies to the audit committee and the Director who oversees the compliance function.
The Sharia internal audit function coordinates with the Sharia Supervisory Board (DPS) in carrying out its duties and responsibilities as referred to in number 7, with the knowledge of the Director who oversees the internal audit function.
The Sharia internal audit function in a Sharia Business Unit (BUK) that has a Sharia Banking Unit (UUS) may coordinate with the Director of the BUK who oversees the UUS in carrying out its duties and responsibilities as referred to in number 7, with the knowledge of the Director who oversees the internal audit function.

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VI. EXTERNAL REVIEW OF SHARIA GOVERNANCE APPLICATION

Banks are required to conduct external reviews of the application of Sharia governance as referred to in Article 40 paragraph (1) of the POJK on Sharia Governance.
The scope of external reviews of the application of Sharia governance covers at least:
a. opinions on the effectiveness of the Sharia Governance process; b. opinions on the effectiveness of the Sharia Supervisory Board (DPS) function and supporting DPS functions;
c. opinions on the effectiveness of the Sharia compliance function;
d. opinions on the effectiveness of the Sharia risk management function; e. opinions on the effectiveness of the Sharia internal audit function; and f. opinions on the effectiveness of follow-up actions on non-compliance findings with Sharia Principles.
External reviews of the application of Sharia governance are conducted by public accountants (AP) and/or public accounting firms (KAP) registered with the Financial Services Authority. The appointment of AP and/or KAP is proposed by the Board of Commissioners, considering audit committee recommendations.

In formulating recommendations, the Audit Committee must consider:
a. the independence of the AP, KAP, and persons within the KAP; b. the scope of the review;
c. review service fees;
d. the expertise and experience of the AP, KAP, and review team from the KAP, including understanding of the application of Sharia governance and understanding of DSN MUI fatwas in the field of Sharia banking; e. the methodology, techniques, and tools used by the KAP; and f. the benefits of a new perspective obtained through the replacement of the AP, KAP, and review team from the KAP.

Review result reports are submitted no later than 2 (two) months after the external review period ends.
Reports on the results of external reviews of the application of Sharia governance contain:
a. the scope of the review; b. review methodology;
c. review team;
d. regulatory basis for the review; e. executive summary of the review; f. summary of observation results; and g. submission of weaknesses or non-compliance.
Reports on the results of external reviews of the application of Sharia governance are submitted to the Financial Services Authority addressed to:
a. the Sharia Banking Department or the Financial Services Authority Office in Jakarta, for Banks headquartered in Jakarta or Banten Province; or b. the local Financial Services Authority Office, for Banks headquartered outside Jakarta and Banten Province.
Reports on the results of external reviews of the application of Sharia governance are submitted online through the Financial Services Authority reporting system, in accordance with Financial Services Authority Regulations on reporting by commercial banks through the Financial Services Authority reporting system.

This copy is consistent with the original.
Legal Development Director
Legal Department
Aat Windradi

In the event that the Financial Services Authority reporting system is not available or in force majeure circumstances, submission is made through the Financial Services Authority correspondence system.

In the event that the Financial Services Authority correspondence system is unavailable due to force majeure circumstances, submission is made offline to the Financial Services Authority.

VII. CLOSING

At the time this Financial Services Authority Circular Letter takes effect, Bank Indonesia Circular Letter Number 12/13/DPbS dated April 30, 2010 regarding the Implementation of Good Corporate Governance for Sharia Commercial Banks and Sharia Banking Units remains in effect as long as it does not conflict with this SEOJK.
The provisions in this Financial Services Authority Circular Letter take effect on the date of issuance.

Established in Jakarta on November 26, 2024

EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,
DIAN EDIANA RAE

signed signed https://jdih.ojk.go.id/

APPENDIX
FINANCIAL SERVICES AUTHORITY CIRCULAR LETTER
REPUBLIC OF INDONESIA
NUMBER 15/SEOJK.03/2024
REGARDING
THE APPLICATION OF SHARIA GOVERNANCE FOR SHARIA COMMERCIAL BANKS AND SHARIA BUSINESS UNITS https://jdih.ojk.go.id/

A. ADMINISTRATIVE REQUIREMENTS DOCUMENTS FOR CANDIDATES FOR THE SHARIA SUPERVISORY BOARD (DPS) MEMBERS

List of composition of Board of Commissioners members, Board of Directors members, and DPS members.
Photocopy of identification, namely Identity Card (KTP).
Curriculum Vitae, with a format example as per Appendix Letter D.
Recent 4 x 6 cm passport-sized photo.
Example of signature and initial.
Proof of having received a recommendation from the National Sharia Council – Indonesian Ulema Council (DSN MUI).
Proof of having received a recommendation from the committee performing nomination functions, accompanied by documents assessing the fulfillment of candidate requirements submitted.
Competency requirement fulfillment documents:
a. 1) a letter of certificate or certificate from educational and training institutions and/or the National Sharia Council – Indonesian Ulema Council regarding education and/or training in the field of Sharia muamalah and in the field of banking and/or finance in general; or

a general banking certificate for the DPS level issued by a professional certification institution in the banking sector registered with the Financial Services Authority.
b. a risk management management competency certificate for the commissioner level issued by a professional certification institution in the banking sector registered with the Financial Services Authority, for 1 (one) DPS member, in the event that the minimum number of DPS members is 3 (three) members as per competency requirements in Part II.A.2.b.

A stamped letter of statement stating that the person concerned:
a. is committed to complying with laws and regulations, particularly in the field of Sharia banking, and supporting Financial Services Authority policies; b. has never been convicted of a criminal offense consisting of:

criminal offenses in the Financial Services Sector whose sentence has been fully served within the last 20 (twenty) years before nomination;
criminal offenses, namely criminal offenses stipulated in the Criminal Code (KUHP) and/or similar foreign criminal codes with a prison sentence threat of 1 (one) year or more whose sentence has been fully served within the last 10 (ten) years before nomination;
and/or
other criminal offenses with a prison sentence threat of 1 (one) year or more, including corruption, money laundering, narcotics/psychotropics, smuggling, customs, excise, human trafficking, illegal arms trafficking, terrorism, counterfeiting money, in the field of taxation, in the field of forestry, in the field of the environment, in the field of marine and fisheries, whose sentence has been fully served within the last 20 (twenty) years before nomination;
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c. is not currently prohibited from becoming a Principal Party, including not being listed in the DTL (List of Persons Prohibited from becoming Principal Parties);
d. does not have non-performing loans and/or financing; e. has never been declared bankrupt and/or has never been a shareholder, controller, Board of Commissioners member, Board of Directors member, or DPS member declared guilty causing a company to be declared bankrupt within the last 5 (five) years before nomination; f. does not hold concurrent positions as a Board of Commissioners member, Board of Directors member, DPS member, Sharia Supervisory Board member, executive official, public official, or other positions in banking institutions, public body companies, or other institutions, exceeding what is permitted by applicable regulations; g. is not a controller, Board of Commissioners member, Board of Directors member, DPS member, or Sharia Supervisory Board member of a legal entity that has non-performing loans and/or financing; h. does not have family relationships up to the second degree with other DPS members, Board of Commissioners members, or Board of Directors members (applicable to the majority of DPS members);
i. DPS independence from Bank owners or Sharia Banking Unit (PSP) owners;
j. is not currently undergoing legal processes, suitability and propriety assessments, and/or undergoing re-assessment processes due to indications of integrity, financial reputation, and/or competence issues at a financial services institution; k. will not grant general power of attorney resulting in unlimited transfer of duties and authorities;
l. will not perform and/or repeat acts and/or actions causing the person concerned to be included as a party prohibited from becoming a Principal Party (for candidates previously prohibited as Principal Parties);
m. states commitment to the healthy operational development of the Bank; and n. is willing to accept the results of the suitability and propriety assessment and will not file claims or lawsuits in any form against the suitability and propriety assessment results established by the Financial Services Authority. https://jdih.ojk.go.id/

B. QUESTIONNAIRE LIST FOR CANDIDATES FOR SHARIA SUPERVISORY BOARD (DPS) MEMBERS OF SHARIA COMMERCIAL BANKS (BUS) AND SHARIA BUSINESS UNITS (UUS) (Use a separate answer sheet if the available pages are insufficient)

Candidate identity submitted:
Full name
Other names (if any)
Place, date of birth
(dd/mm/yyyy)
Address according to identity documents
Domicile address
Taxpayer Identification Number (NPWP)
Party proposing your nomination as a DPS member.
Your relationship with the party proposing your nomination as a DPS member.
Companies that you have previously and currently owned (including banks), either individually or jointly, and the magnitude of your ownership.
Have you or your company (including banks) ever had an application for a license in the banking/other financial services sector rejected by competent authorities in Indonesia or other countries?
Do you have a company (including banks) that has ever been declared bankrupt, frozen/cancelled/revoked by competent authorities in Indonesia or other countries?
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Has a company (including banks) that you previously owned or a company (including banks) where you previously worked, ever failed to fulfill obligations to other parties under the law in Indonesia or other countries?
Do companies you have previously and currently owned (including banks) have loans/financing that have matured and are problematic? Explain in detail.
Have you personally or in association with your company (including banks) or business group, ever been published or become the object of investigation by competent authorities regarding criminal offenses and/or other misconduct in the financial field?
Have you ever worked at a company (including banks) that has ever or currently has loans/financing that have matured and are problematic? Describe your position, responsibilities, and duties at the company (including banks).
Has your application for nomination as a manager in the banking/other financial services sector ever been rejected by competent authorities in Indonesia or other countries?
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Do you have loans/financing that have matured and are problematic, either individually or jointly?
Have you ever worked at a company (including banks) that has ever been declared bankrupt or whose business license has been revoked or closed by competent authorities in Indonesia or other countries? Describe your position, responsibilities, and duties at the company (including banks).
Have you ever been asked to resign, dismissed, subjected to disciplinary actions/sanctions by a company, or subjected to sanctions prohibiting you from practicing your profession?
Have you ever taken banking certification exams? If yes, at what level and what grade did you obtain?
Do you have relationships with PSP and other managers (family, financial, management, ownership relationships)?
Explain your understanding of laws and regulations in the field of Sharia banking, including Sharia governance, Sharia banking institutions, and Sharia banking products and activities.
Explain your vision, mission, and strategies that you will apply to develop the Bank in the future, including strengthening Sharia governance.
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What is your commitment to the healthy operational development of the Bank, the application of prudence principles in banking and Sharia governance, and compliance with laws and regulations? Explain.
What is your commitment to the development of Sharia banking in Indonesia in the future, and what is your role in increasing the Bank's contribution to the development of Sharia banking? Explain.
Explain the Bank's business strategy and process according to the Bank's Business Plan and your role.
Explain the Bank's condition regarding business size, segmentation, and the Bank's problem map regarding Sharia Principles, along with recommended improvement plans.
Explain:
a. The duties, functions, and responsibilities of the position you will hold. b. The implementation of Sharia governance principles at all levels of the Bank's organization.
c. Your supervision over the Board of Directors.
Explain your vision and mission in addressing internal and external issues from the wholesale banking/retail banking business strategy (depending on the Bank's business focus).
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Explain your motivation and commitment in performing the duties and responsibilities of the position you will hold.
Explain the suitability of your competencies and work experience in performing duties at the position you will hold.
Do you have achievements in the banking/other financial services sector?
If Yes, explain.
Do you have special/specific competencies that will provide positive contributions to the Bank?
If Yes, explain.
Explain your form of independence from Bank owners or PSP owners.
Explain how you will increase your knowledge of Indonesian banking given that you have never worked in Indonesian Sharia banking? (Specifically for those who have never worked in Indonesian Sharia banking)
Explain if there is other information that can be considered by the Financial Services Authority in processing your application (accompanied by supporting evidence).

The undersigned hereby declares that:

I have understood the provisions concerning the rights and obligations of the DPS as regulated in applicable regulations.
The information provided above is true, complete, and accurate.
I will inform the Financial Services Authority within 30 (thirty) days if there are significant changes in information.
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If the above statements/information are proven to be untrue, then within 30 (thirty) days I am willing to resign as a DPS member.

(City), (date)
(Signature above sufficient stamp)
(Candidate DPS Member Name) https://jdih.ojk.go.id/

C. EXAMPLE FORMAT OF STATEMENT LETTER FOR CANDIDATE MEMBER OF THE SHARIA SUPERVISORY BOARD
-----------LETTERHEAD---------
S T A T E M E N T L E T T E R
I, the undersigned below:
Name :
Place and Date of Birth :
ID Card No. :
Address :
Position :
acting on behalf of myself, declare that I:

am not undergoing legal proceedings, am not undergoing an assessment of competence and propriety, and/or am not undergoing a reassessment process due to indications of integrity and/or reputation issues at a Financial Institution (LJK);
have never been sentenced for proven criminal acts consisting of:
a. criminal acts in the Financial Services Sector whose sentence has been fully served within the last 20 (twenty) years prior to nomination; b. criminal acts, namely criminal acts stipulated in the Criminal Code (KUHP) and/or similar to the KUHP abroad with a prison sentence threat of 1 (one) year or more whose sentence has been fully served within the last 10 (ten) years prior to nomination; and/or
c. other criminal acts with a prison sentence threat of 1 (one) year or more, including but not limited to corruption, money laundering, narcotics/psychotropics, smuggling, customs, excise, human trafficking, illegal arms trade, terrorism, counterfeiting money, in the field of taxation, in the field of forestry, in the field of environmental protection, in the field of marine and fisheries, whose sentence has been fully served within the last 20 (twenty) years prior to nomination;
am not currently prohibited from becoming a Main Party, which among others is not listed in the DTL;
do not have non-performing loans and/or financing; 1)
have never been declared bankrupt and/or have never been a shareholder, controller, member of the Board of Commissioners, member of the Board of Directors, or member of the DPS, Sharia Supervisory Board who was declared guilty causing a company to be declared bankrupt within the last 5 (five) years;
do not hold concurrent positions as a member of the Board of Commissioners, member of the Board of Directors, member of the DPS, member of the Sharia Supervisory Board, executive officials, public officials, or other positions in banking institutions, companies, public bodies, or other institutions, exceeding what is permitted by applicable regulations;
are not controllers, members of the Board of Commissioners, members of the Board of Directors, members of the DPS, or members of the Sharia Supervisory Board of legal entities that have non-performing loans and/or financing;
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will not commit and/or repeat acts and/or actions that cause me to be included as a party prohibited from becoming a Main Party (for candidates who have previously been prohibited from becoming a Main Party;

do not have family relationships up to the second degree with other members of the Board of Commissioners or members of the Board of Directors in accordance with the regulations of the Financial Services Authority (OJK);
do not have financial, management, share ownership, and/or family relationships with other members of the DPS, members of the Board of Commissioners, members of the Board of Directors, and/or controlling shareholders, or other relationships that can influence their ability to act independently;
will not grant general powers that result in the transfer of duties and authorities without limits;
are willing to carry out healthy operational development; 3)
are committed to complying with laws and regulations, particularly in the field of Sharia banking, and are willing to support the policies of the Financial Services Authority (OJK); and
are willing to accept the results of the competence and propriety assessment and will not file claims or lawsuits in any form against the results of the competence and propriety assessment established by the Financial Services Authority (OJK).
If it turns out that the above statement is proven false and/or I violate the above commitments, then I accept all decisions of the Financial Services Authority (OJK) along with the consequences in accordance with applicable regulations. This statement letter is made with full consciousness and without coercion from any party. (City), (date) (Signature above sufficient with stamp duty) (Name of Candidate DPS Member) PT Bank/Company ……….. 3) Notes

accompanied by supporting documents in the form of results from the Financial Services Information System (Sistem Layanan Informasi Keuangan).
only applies to DPS candidate members who have previously been prohibited from becoming a Main Party in the competence and propriety assessment.
filled with the name of the Bank
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D. FORMAT OF CURRICULUM VITAE LIST
CURRICULUM VITAE LIST
I. PERSONAL DATA
Full Name : ............................................................................
Nickname : ............................................................................
Home Address : ............................................................................
Postal Code: .............................................................
Home Phone : ............................................................................
Mobile Phone Number : .............................................................................
Office Address : ............................................................................
Office Phone Number : .............................................................................
Place &
Date of Birth : ............................................................................
Religion : . .............................................................................
Parents' Names :
Number of Siblings (Full/Adopted) : ...................................................
Marital Status : ............................................................................
Spouse's Name :............................................................................
Names of Family Members, namely:
a. Biological/Step/Adoptive Parents : ...................................................
b. Full/Step/Adoptive Siblings along with their spouses :..................
c. Biological/Step/Adoptive Children : ...........................................................
d. Biological/Step/Adoptive Grandparents : ..............................................
e. Biological/Step/Adoptive Grandchildren :...........................................................
f. Full/Step/Adoptive Siblings of Parents along with their spouses : .............................................................................
g. Spouse : ..................................................................................
h. In-laws : .........................................................................................
i. In-laws (Spouse's side) :...........................................................................................
j. Spouse/Child of Biological/Step/Adoptive Children: .........................................
k. Grandparents of Spouse : ..............................................................................
l. Spouse/Child of Biological/Step/Adoptive Grandchildren :..................................
m. Full/Step/Adoptive Siblings of Spouse along with their spouses : .............................................................................
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II. EDUCATIONAL BACKGROUND
Level Year Institution Faculty /
Major Graduated /
Degree Achieved
Primary School
Junior High School
Senior High School
Academy
Higher Education
Postgraduate
III. TRAINING / COURSES ATTENDED
Name of Training /
Course*) Year Organizer Location
) including certification training
IV. WORK HISTORY
Month and
Year) Company Position Responsibility Achievement Awards Total Assets/ Turnover *)filled with the month and year of assuming office until the end of the term.
V. SPECIFIC EXPERIENCE
(Describe your specific experiences at work that demonstrate your ability to handle difficult situations). https://jdih.ojk.go.id/

This Curriculum Vitae List is compiled truthfully.
(City), (date)
(Signature above sufficient with stamp duty)
(Name of Candidate DPS Member) https://jdih.ojk.go.id/

E. COMPLIANCE CHECKLIST LIST
COMPLETENESS OF DOCUMENTATION FOR APPLICATION FOR NOMINATION OF SHARIA SUPERVISORY BOARD (DPS) MEMBERS OF SHARIA BUSINESS UNITS (BUS) AND SHARIA COMMERCIAL BANKS (UUS) Candidate Identity Submitted Information Name Address Place & Date of Birth Education Occupation Position to be held No. Information (🗸/x) Information

List of composition of members of the Board of Commissioners, members of the Board of Directors, and members of the DPS before and after nomination.
Photocopy of identification (ID Card).
Curriculum Vitae List (according to the format in Appendix Letter D and signed with sufficient stamp duty) which adds emphasis regarding the month and year of each respective position sequentially.
Application Form according to the format in Appendix Letter B.
Latest passport-size photo 4 x 6 cm.
Example of signature and initial.
Recommendation from the National Sharia Council of the Indonesian Ulema Council (DSN-MUI).
Recommendation from the committee performing nomination functions accompanied by documents assessing the fulfillment of requirements for the submitted candidate.
Deed of Extraordinary General Meeting of Shareholders (RUPS) (in the event the candidate has been appointed by the RUPS).
Photocopy of the last diploma (legalized).
Photocopy of certificates in the banking field along with refreshment training conducted.
Statement Letter signed with sufficient stamp duty:
Name of Bank :
https://jdih.ojk.go.id/

No. Information (🗸/x) Information a. committed to complying with laws and regulations, particularly in the field of Sharia banking, and supporting the policies of the Financial Services Authority (OJK); b. have never been sentenced for proven criminal acts consisting of:

criminal acts in the Financial Services Sector whose sentence has been fully served within the last 20 (twenty) years prior to nomination;
criminal acts, namely criminal acts stipulated in the Criminal Code (KUHP) and/or similar to the KUHP abroad with a prison sentence threat of 1 (one) year or more whose sentence has been fully served within the last 10 (ten) years prior to nomination; and/or
other criminal acts with a prison sentence threat of 1 (one) year or more, including but not limited to corruption, money laundering, narcotics/psychotropics, smuggling, customs, excise, human trafficking, illegal arms trade, terrorism, counterfeiting money, in the field of taxation, in the field of forestry, in the field of environmental protection, in the field of marine and fisheries, whose sentence has been fully served within the last 20 (twenty) years prior to nomination;
c. are not currently prohibited from becoming a Main Party, which among others is not listed in the DTL;
d. do not have non-performing loans and/or financing; e. have never been declared bankrupt and/or have never been a shareholder, controller, member of the Board of Commissioners, member of the Board of Directors, member of the DPS, or member of the Sharia Supervisory Board who was declared guilty causing a company to be declared bankrupt within the last 5 (five) years prior to nomination; f. do not hold concurrent positions as a member of the Board of Commissioners, member of the Board of Directors, member of the DPS, member of the Sharia Supervisory Board, executive officials, public officials, or other positions in banking institutions, companies, public bodies, or other institutions, exceeding what is permitted by applicable regulations; g. are not controllers, members of the Board of Commissioners, members of the Board of Directors, members of the DPS, or members of the Sharia Supervisory Board of legal entities that have non-performing loans and/or financing; h. do not mutually have family relationships up to the second degree with other members of the DPS, members of the Board of Directors, or members of the Board of Commissioners (applies to the majority of DPS members);
i. are independent parties towards the Bank's owners or Payment Service Providers (PSP);
j. are not undergoing legal proceedings, competence and propriety assessment processes, and/or are undergoing reassessment processes due to indications of integrity, financial reputation/feasibility, and/or competence issues at a financial institution; k. will not grant general powers that result in the transfer of duties and authorities without limits;
l. will not commit and/or repeat acts and/or actions that cause the person concerned to be included as a party prohibited from becoming a Main Party (for candidates who have previously been prohibited from becoming a Main Party);
m. declare commitment to the healthy operational development of the Bank; https://jdih.ojk.go.id/

No. Information (🗸/x) Information n. are willing to accept the results of the competence and propriety assessment and will not file claims or lawsuits in any form against the results of the competence and propriety assessment established by the Financial Services Authority (OJK).
13. Concurrent Positions (in the event the candidate DPS member holds concurrent positions):
If the person concerned is a Civil Servant (PNS), they are required to submit:
a. A personal statement letter signed with sufficient stamp duty that the person concerned does not violate regulations and/or laws regarding the status of Civil Servants, including Law No. 25 of 2009. b. A consent letter from the direct superior on sufficient stamp duty granting consent for the person's nomination as a DPS member and that the person's nomination does not violate regulations and/or laws regarding the status of Civil Servants, including Law No. 25 of 2009. Notes:
(🗸) = requirement documents have been attached in the application and are correct; (X) = requirement documents have not been attached; https://jdih.ojk.go.id/

This copy is consistent with the original
Director of Legal Development
Legal Department
Aat Windradi
The undersigned declares that:
a. The submitted documents are complete and correct in number and format, and the substance of the submitted administrative requirement documents is in accordance with what is required in this SEOJK. b. The administrative requirement documents consisting of “statements” and “application forms” have indeed been filled out and signed by the submitted candidate. (City), (date) (Signature above sufficient with stamp duty) (Name of Candidate DPS Member) Established in Jakarta on 26 November 2024 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, DIAN EDIANA RAE signed signed https://jdih.ojk.go.id/

Implementation of Sharia Governance for Sharia Commercial Banks and Sharia Business Units

Lineage: In force

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