Maximum Limit on Credit Provision by Rural Banks

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 49 /POJK.03/2017
CONCERNING
MAXIMUM LIMIT ON CREDIT PROVISION BY RURAL BANKS BY THE GRACE OF GOD THE ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that to support economic growth, Rural Banks need to increase financing to the productive sector, especially by financing micro, small, and medium enterprises; b. that in efforts to increase financing to micro, small, and medium enterprises and to protect public interests, Rural Banks are required to maintain their health and continuity of business by observing prudent principles in the provision of funds;
c. that the application of prudent principles in the provision of funds needs to be carried out, among others, through the diversification of the portfolio of funds provided so that the risk of such fund provision is not concentrated on a specific borrower or group of borrowers;
d. that in connection with the transfer of functions, duties, and authorities for the regulation and supervision of financial services in the banking sector from Bank Indonesia to the Financial Services Authority, it is necessary to re-regulate the maximum limit on credit provision by Rural Banks; e. that based on considerations as referred to in letters a through d, it is necessary to establish a Financial Services Authority Regulation concerning the Maximum Limit on Credit Provision by Rural Banks; Recalling:

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING MAXIMUM LIMIT ON CREDIT PROVISION BY RURAL BANKS

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

1. Rural Bank, hereinafter abbreviated as BPR, is a bank that conducts conventional business activities and does not provide payment circulation services in its activities.
2. Maximum Limit on Credit Provision, hereinafter abbreviated as BMPK, is the maximum percentage of the realization of fund provision permitted against the capital of the BPR.
3. Fund Provision is the investment of BPR funds in the form of credit and/or interbank fund placement.
4. Credit is the provision of money or bills that can be equated with it, based on an agreement or consensus of borrowing between the BPR and other parties that obligates the borrower to repay their debt after a certain period with the provision of interest, fees, or profit sharing.
5. Interbank Fund Placement is the investment of BPR funds in other banks, in the form of current accounts, savings, time deposits, deposit certificates, provided credits, and other similar fund investments.
6. Capital is core capital and supplementary capital as referred to in the Financial Services Authority Regulation regarding minimum capital provision requirements and minimum core capital fulfillment for BPRs.
7. Related Party is an individual, company, or entity that has ownership, management, and/or financial relationships with the BPR.
8. Unrelated Party is an individual, company, or entity that does not have ownership, management, and/or financial relationships with the BPR.
9. BMPK Violation is the excess difference between the percentage of Fund Provision realized at the time of realization against the BPR's Capital and the permitted BMPK.
10. BMPK Exceedance is the excess difference between the percentage of Fund Provision that has been realized against the BPR's Capital at the reporting date and the permitted BMPK, and does not include BMPK Violation.
11. Borrower is an individual, company, or entity that obtains Fund Provision from the BPR in the form of Credit.
12. Board of Directors:
    a. for BPRs in the form of a Limited Liability Company, is the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies; b. for BPRs in the form of legal entities:

1. Regional Public Enterprises or Regional State-Owned Enterprises is the Board of Directors as referred to in Law Number 23 of 2014 concerning Regional Government as amended several times, lastly by Law Number 9 of 2015 concerning the Second Amendment to Law Number 23 of 2014 concerning Regional Government;
2. Regional Enterprises is the Board of Directors in BPRs that have not changed their legal entity form into a Regional Public Enterprise or Regional State-Owned Enterprise in accordance with Law Number 23 of 2014 concerning Regional Government as amended several times, lastly by Law Number 9 of 2015 concerning the Second Amendment to Law Number 23 of 2014 concerning Regional Government.
   c. for BPRs in the form of a Cooperative legal entity, is the managers as referred to in Law Number 25 of 1992 concerning Cooperatives.

13. Board of Commissioners:
    a. for BPRs and Islamic Rural Banks in the form of a Limited Liability Company, is the Board of Commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies; b. for BPRs in the form of legal entities:

1. Regional Public Enterprises is the Supervisory Board as referred to in Law Number 23 of 2014 concerning Regional Government as amended several times, lastly by Law Number 9 of 2015 concerning the Second Amendment to Law Number 23 of 2014 concerning Regional Government;
2. Regional State-Owned Enterprises is the Commissioners as referred to in Law Number 23 of 2014 concerning Regional Government as amended several times, lastly by Law Number 9 of 2015 concerning the Second Amendment to Law Number 23 of 2014 concerning Regional Government;
3. Regional Enterprises is the Supervisors in BPRs that have not changed their form into a Regional Public Enterprise or Regional State-Owned Enterprise in accordance with Law Number 23 of 2014 concerning Regional Government as amended several times, lastly by Law Number 9 of 2015 concerning the Second Amendment to Law Number 23 of 2014 concerning Regional Government;
   c. for BPRs in the form of a Cooperative legal entity, is the Supervisors as referred to in Law Number 25 of 1992 concerning Cooperatives.

Article 2
BPRs are required to observe prudent principles in making Credit agreements between the BPR and Borrowers that involve Fund Provision.

Article 3
(1) BPRs are prohibited from making Credit agreements as referred to in Article 2 if the Credit agreement requires the BPR to provide funds that would result in a BMPK Violation.
(2) BPRs are prohibited from providing Fund Provision that results in a BMPK Violation.

CHAPTER II
BASIS FOR BMPK CALCULATION
Article 4
(1) BMPK for Credit is calculated based on the debit balance of the Credit.
(2) BMPK for Interbank Fund Placement in other BPRs is calculated based on the nominal value of the Interbank Fund Placement.

CHAPTER III
BMPK FOR RELATED PARTIES
Article 5
Fund Provision to all Related Parties is set at a maximum of 10% (ten percent) of the BPR's Capital.

Article 6
Fund Provision in the form of Credit to Related Parties must obtain approval from 1 (one) member of the Board of Directors and 1 (one) member of the Board of Commissioners of the BPR.

Article 7
Related Parties include:
a. shareholders who own at least 10% (ten percent) of the paid-up capital; b. members of the Board of Directors;
c. members of the Board of Commissioners;
d. parties who have family relationships up to the second degree, both horizontally and vertically, with the parties referred to in letters a through c; e. executive officials; f. non-bank companies owned by parties as referred to in letters a through e, where the ownership, either individually or collectively, is at least 25% (twenty-five percent) of the paid-up capital of the company; g. other BPRs owned by parties as referred to in letters a through e, where the ownership individually is at least 10% (ten percent) of the paid-up capital in such other BPR; h. other BPRs where members of the Board of Commissioners hold concurrent positions as members of the Board of Commissioners of the BPR and concurrent positions in such other BPR amount to at least 50% (fifty percent) of the total number of all members of the Board of Directors and Board of Commissioners in such other BPR;
i. companies where at least 50% (fifty percent) of the total number of all members of the Board of Directors and Board of Commissioners are members of the Board of Commissioners of the BPR; and
j. Borrowers who are guaranteed by parties as referred to in letters a through i.

Article 8
Fund Provision to parties other than those referred to in Article 7 can be categorized as Fund Provision to Related Parties if such Fund Provision is used for the benefit of Related Parties.

CHAPTER IV
BMPK FOR UNRELATED PARTIES
Article 9
(1) Fund Provision in the form of Interbank Fund Placement in other BPRs that are Unrelated Parties is set at a maximum of 20% (twenty percent) of the BPR's Capital.
(2) Fund Provision in the form of Credit to 1 (one) Unrelated Borrower is set at a maximum of 20% (twenty percent) of the BPR's Capital.
(3) Fund Provision in the form of Credit to 1 (one) group of Unrelated Borrowers is set at a maximum of 30% (thirty percent) of the BPR's Capital.

Article 10
Borrowers are classified as members of a group of Borrowers as referred to in Article 9 paragraph (3) if the Borrower has connections with other Borrowers through ownership, management, and/or financial relationships, including:
a. companies where each has at least 25% (twenty-five percent) of its paid-up capital owned by a company, business entity, or individual, or collectively by a family; b. companies where one owns at least 25% (twenty-five percent) of the paid-up capital of another company;
c. companies where at least 50% (fifty percent) of the total number of all members of the Board of Directors and Board of Commissioners in a company hold concurrent positions as members of the Board of Directors and/or Board of Commissioners in another company;
d. companies that do not meet the criteria as referred to in letters a through c, but there is financial assistance from one of the companies to another company that results in control by such company over the other company; and e. companies and/or individuals where one acts as a guarantor for Credit received by another company or individual.

CHAPTER V
BMPK EXCEEDANCE
Article 11
Fund Provision by BPRs is categorized as BMPK Exceedance if there is an excess difference between the percentage of Fund Provision that has been realized against the BPR's Capital at the reporting date and the permitted BMPK, caused by:
a. a decrease in BPR Capital; b. business mergers, consolidations, takeovers, changes in ownership structure, and/or changes in management that cause changes in Related Parties and/or groups of Borrowers; and/or
c. changes in regulations.

CHAPTER VI
RESOLUTION OF BMPK VIOLATIONS AND/OR EXCEEDANCES
Article 12
(1) BPRs are required to prepare and submit an action plan for the resolution of BMPK Violations and/or BMPK Exceedances.
(2) The action plan for BMPK Violations as referred to in paragraph (1) must be submitted by the BPR and received by the Financial Services Authority no later than 1 (one) month after the deadline for submission of the BMPK report for the relevant month or 14 (fourteen) days since the exit meeting for BMPK Violations found during examinations. (3) The action plan for BMPK Exceedances as referred to in paragraph (1) caused by matters as referred to in Article 11 letters a and b must be submitted by the BPR and received by the Financial Services Authority no later than 1 (one) month after the end of the BMPK reporting month for the relevant month or 14 (fourteen) days since the exit meeting for BMPK Exceedances found during examinations. (4) The action plan for BMPK Exceedances as referred to in paragraph (1) caused by matters as referred to in Article 11 letter c must be submitted by the BPR and received by the Financial Services Authority no later than 3 (three) months since the implementation of the regulatory change. (5) In the event that the deadline for submission of the action plan as referred to in paragraphs (2), (3), and (4) falls on a holiday, the BPR is required to submit the action plan on the preceding working day.

Article 13
(1) BPRs are required to implement the action plan as referred to in Article 12 paragraph (1) which contains at least steps for the resolution of BMPK Violations and/or BMPK Exceedances and target times for resolution. (2) The target time for resolution as referred to in paragraph (1) is established as follows:
a. for BMPK Violations, no later than 3 (three) months since the action plan was submitted to the Financial Services Authority; b. for BMPK Exceedances caused by matters as referred to in Article 11 letters a and b, no later than 6 (six) months since the action plan was submitted to the Financial Services Authority; and
c. for BMPK Exceedances caused by matters as referred to in Article 11 letter c, no later than 12 (twelve) months since the action plan was submitted to the Financial Services Authority.
(3) In the event that the remaining period of Fund Provision until maturity is shorter than the target time for resolution as referred to in paragraph (2), the target time for resolution is no later than until the Fund Provision matures. (4) The target time for resolution of BMPK Violations and/or BMPK Exceedances for Interbank Fund Placements that do not have a maturity date in the form of savings in other BPRs is no later than 1 (one) month since the action plan was submitted to the Financial Services Authority. (5) The Financial Services Authority may request the BPR to adjust the submitted action plan if, in the opinion of the Financial Services Authority, the steps and/or target times for resolution are not achievable.

Article 14
(1) BPRs are required to submit reports on the implementation of the action plan for the resolution of BMPK Violations and/or BMPK Exceedances accompanied by supporting evidence.
(2) The report on the implementation of the action plan as referred to in paragraph (1) must be submitted by the BPR and received by the Financial Services Authority no later than 14 (fourteen) days since the realization of the action plan. (3) In the event that the 14 (fourteen) day period as referred to in paragraph (2) falls on a holiday, the BPR is required to submit the report on the implementation of the action plan on the preceding working day.

CHAPTER VII
EXEMPTIONS
Article 15
BMPK provisions are exempted for:
a. Interbank Fund Placement in commercial banks, including commercial banks that meet the criteria of Related Parties as referred to in Article 7; b. The portion of Fund Provision guaranteed by:

1. collateral in the form of cash collateral in the form of deposits or savings at the BPR;
2. gold and/or precious metals; and/or
3. Bank Indonesia Certificates,
   provided that the following requirements are met:
   a) the collateral is blocked and accompanied by an irrevocable power of attorney for disbursement or sale from the owner of the collateral for the benefit of the BPR receiving the collateral, including disbursement or sale of part to pay principal or interest arrears; b) the blocking period as referred to in letter a) is at least equal to the period of the Fund Provision; and c) for cash collateral as referred to in letter b numbers 1 and 2, it is stored or accounted for at the BPR in question;
   c. The portion of Fund Provision guaranteed by the Government of Indonesia directly or through State-Owned Enterprises (BUMN) or Regional-Owned Enterprises (BUMD) in accordance with applicable regulations and meeting the following requirements:
4. the guarantee is unconditional and irrevocable;
5. it must be liquidatable no later than 7 (seven) working days since the claim is submitted, including partial liquidation; and
6. it has a guarantee period at least equal to the period of the Fund Provision; and
   d. The portion of Interbank Fund Placement in other BPRs provided that the following requirements are met:
7. there is an agreement between the BPR placing the funds and the other BPR receiving the Interbank Fund Placement;
8. it is in order to overcome liquidity difficulties of the BPR; and
9. the portion of Interbank Fund Placement referred to:
   a) represents deposits, contributions, or portions of funds that must be placed by the BPR in other BPRs in accordance with the agreement as referred to in letter d number 1; or b) originates from deposits, contributions, or portions of funds from each BPR intended to overcome liquidity difficulties of each respective BPR.

Article 16
(1) Fund Provision by BPRs in the form of Credit with a core-plasma partnership pattern or the pattern of Bank and Self-Help Group Relationship Development (PHBK) is exempted from the definition of a group of Unrelated Borrowers as referred to in Article 9 paragraph (3). (2) The core-plasma partnership pattern as referred to in paragraph (1) is exempted from the definition of a group of Unrelated Borrowers as referred to in Article 9 paragraph (3), provided that the following requirements are met:
a. Credit is given with a partnership pattern; b. the core company is an Unrelated Party to the BPR;
c. the plasma is not a subsidiary or branch owned, controlled, or affiliated with the core company;
d. the plasma produces components required by the core company as part of the core company's production; and e. the Credit agreement between the BPR and the plasma is conducted directly.
(3) The PHBK pattern as referred to in paragraph (1) is exempted from the definition of a group of Unrelated Borrowers as referred to in Article 9 paragraph (3), provided that the following requirements are met:
a. Credit is given to the group; b. PHBK participants have undergone selection;
c. respecting the autonomy of participant institutions;
d. promoting savings and linking savings with Credit; e. applying market interest rates; f. developing and accepting alternative collateral; and g. there is technical assistance or mentoring to nurture the group.

Article 17
Credit to members of the Board of Directors, members of the Board of Commissioners, and/or employees of the BPR who meet the criteria of Related Parties, which is intended to improve welfare and is repaid from income obtained from the respective BPR, is exempted from the provision of Credit to Related Parties as referred to in Article 7.

CHAPTER VIII
PROCEDURE FOR SUBMISSION OF BMPK REPORTS AND CORRECTION OF BMPK REPORTS
Article 18
(1) BPRs are required to prepare and submit BMPK reports to the Financial Services Authority online through the Financial Services Authority reporting system every month accurately, completely, and on time.
(2) In the event that submission of reports through the Financial Services Authority reporting system as referred to in paragraph (1) cannot be done, the BPR submits reports online to Bank Indonesia through the BPR Periodic Report application as referred to in regulations governing monthly BPR reports. (3) The BMPK report as referred to in paragraph (1) includes:
a. Fund Provision to Unrelated Parties that violate and exceed BMPK; and b. all Fund Provision to Related Parties.

Article 19
(1) BPRs are responsible for the truthfulness and completeness of the content of the BMPK reports submitted as referred to in Article 18.
(2) In the event that there are errors and/or mistakes in the BMPK reports that have been submitted to the Financial Services Authority, the BPR is required to submit corrections to the BMPK report online by meeting the provisions as referred to in Article 18.

Article 20
(1) The obligation to submit BMPK reports and/or correct BMPK reports online as referred to in Article 18 paragraph (1) and Article 19 paragraph (2) is exempted in the event that:
a. the BPR is located in an area where communication facilities are not yet available, making it impossible to submit BMPK reports and/or correct BMPK reports online; b. the BPR has just started operations, with a deadline no later than 2 (two) months after commencing operational activities;
c. the BPR experiences technical disruptions; or
d. there is damage and/or disruption to the database or communication network of the Financial Services Authority or Bank Indonesia in the event that submission of reports through the Financial Services Authority reporting system cannot be done. (2) BPRs obtain the exemption as referred to in paragraph (1) letters a, b, or c after submitting a notification letter accompanied by an explanation as referred to in paragraph (1) letters a, b, or c first to the Financial Services Authority with a copy to Bank Indonesia in the event that submission of reports through the Financial Services Authority reporting system cannot be done. (3) BPRs are required to submit BMPK reports and/or correct BMPK reports online after operational activities return to normal.

Article 21
(1) BPRs that cannot submit BMPK reports and/or correct BMPK reports online as referred to in Article 20 are required to submit them offline, in the form of data recordings in the form of digital discs (compact discs) or other electronic data recording media accompanied by validation results to the Financial Services Authority. (2) In the event that submission through the Financial Services Authority reporting system cannot be done, the BPR submits BMPK reports and/or corrections to BMPK reports in the form of data recordings in the form of digital discs

digital (compact disk) or other electronic data recording media accompanied by validation results to Bank Indonesia as referred to in regulations governing monthly Rural Bank reports with a copy to the Financial Services Authority.

Article 22
(1) The BMPK Report must be submitted by the Rural Bank to the Financial Services Authority no later than the 14th of the month following the end of the relevant reporting month.
(2) If the 14th falls on a holiday, Rural Banks submitting the BMPK Report offline are required to submit the BMPK Report on the preceding working day.
(3) A Rural Bank is deemed to have submitted the BMPK Report on the date the BMPK Report is received by the Financial Services Authority.
(4) In the event that a Rural Bank submits the BMPK Report as referred to in Article 18 paragraph (2) and Article 21 paragraph (2), the Rural Bank is deemed to have submitted the BMPK Report on the date the BMPK Report is received by Bank Indonesia. (5) In the event of errors and/or mistakes in the BMPK Report that has been submitted, the Rural Bank is required to submit corrections to the BMPK Report to the Financial Services Authority online no later than the 20th of the month following the end of the relevant reporting month. (6) If the 20th as referred to in paragraph (5) falls on a holiday, Rural Banks submitting BMPK Report corrections offline are required to submit the BMPK Report on the preceding working day. (7) In the event that submission of reports through the Financial Services Authority's reporting system cannot yet be performed, the Rural Bank submits BMPK Report corrections as referred to in paragraph (5) and paragraph (6) to Bank Indonesia as referred to in regulations governing monthly Rural Bank reports. (8) A Rural Bank is deemed to have submitted BMPK Report corrections on the date the BMPK Report corrections are received by the Financial Services Authority or by Bank Indonesia in the event that submission of reports through the Financial Services Authority's reporting system cannot yet be performed.

Article 23
(1) A Rural Bank is deemed to have submitted the BMPK Report late if, by the deadline as referred to in Article 22 paragraph (1), the Rural Bank has not submitted the BMPK Report.
(2) A Rural Bank is deemed to have submitted BMPK Report corrections late if, by the deadline as referred to in Article 22 paragraph (5), the Rural Bank has not submitted BMPK Report corrections.
(3) A Rural Bank is deemed to have not submitted the BMPK Report and/or BMPK Report corrections if, by the end of the following month after the end of the relevant reporting month, the Rural Bank has not submitted the BMPK Report and/or BMPK Report corrections. (4) Rural Banks deemed to have not submitted the BMPK Report and/or BMPK Report corrections as referred to in paragraph (3) remain required to submit the BMPK Report and/or BMPK Report corrections.

Article 24
(1) The Financial Services Authority has the authority to establish corrections regarding the implementation of BMPK regulations by Rural Banks.
(2) Rural Banks are required to perform corrections established by the Financial Services Authority as referred to in paragraph (1) in the BMPK Report submitted to the Financial Services Authority.
(3) In the event of Financial Services Authority corrections as referred to in paragraph (1), Rural Banks are required to submit BMPK Report corrections to the Financial Services Authority no later than 14 (fourteen) days since the date of notification by the Financial Services Authority or since the date of the exit meeting. (4) In the event that the deadline as referred to in paragraph (3) falls on a holiday, Rural Banks are required to submit corrections to the BMPK Report on the preceding working day.

Article 25
(1) A Rural Bank is deemed to have submitted BMPK Report corrections late as referred to in Article 24 paragraph (2) if, by the deadline as referred to in Article 24 paragraph (3), the Rural Bank has not submitted BMPK Report corrections. (2) A Rural Bank is deemed to have not submitted BMPK Report corrections as referred to in Article 24 paragraph (2) if, by 30 (thirty) days since the date of notification by the Financial Services Authority or since the date of the exit meeting, the Rural Bank has not submitted BMPK Report corrections. (3) Rural Banks deemed to have not submitted BMPK Report corrections as referred to in paragraph (2) remain required to submit BMPK Report corrections.

CHAPTER IX
FORCE MAJEURE

Article 26
(1) Rural Banks experiencing force majeure for at least one BMPK Report and/or BMPK Report correction submission period are exempted from the obligation to submit the BMPK Report and/or BMPK Report corrections as referred to in Article 18 paragraph (1), Article 19 paragraph (2), and Article 24 paragraph (3). (2) Rural Banks experiencing force majeure for less than one BMPK Report and/or BMPK Report correction submission period are exempted from the obligation to submit the BMPK Report and/or BMPK Report corrections until the deadline as referred to in Article 22 paragraph (1), paragraph (2), paragraph (5), and paragraph (6). (3) Rural Banks experiencing force majeure submit written notification letters accompanied by explanations regarding the force majeure experienced to the Financial Services Authority with a copy to Bank Indonesia in the event that submission of reports through the Financial Services Authority's reporting system cannot yet be performed, accompanied by explanations regarding the force majeure experienced. (4) Rural Banks are required to submit the BMPK Report and/or BMPK Report corrections as referred to in Article 22 and Article 24 paragraph (3) after resuming normal operational activities.

CHAPTER X
OTHER PROVISIONS

Article 27
Further provisions regarding the basis for calculating the BMPK as referred to in Article 4 as well as the procedures for submitting the BMPK Report and BMPK Report corrections as referred to in Article 18 to Article 25 are regulated in a Financial Services Authority Circular.

CHAPTER XI
SANCTIONS

Article 28
(1) Rural Banks committing BMPK Violations as referred to in Article 3 paragraph (2) are subject to administrative sanctions in the form of a downgrade of the Rural Bank's health rating as referred to in regulations concerning the assessment of Rural Bank health ratings. (2) For every BMPK Report error found based on research and/or examination by the Financial Services Authority, an administrative sanction in the form of a fine of IDR 10,000.00 (ten thousand rupiah) per type of error or a maximum of IDR 1,000,000.00 (one million rupiah) is imposed. (3) In the event that the same type of error occurs in the monthly Rural Bank report in accordance with regulations concerning monthly Rural Bank reports and the Rural Bank has already been subject to an administrative sanction in the form of a fine for that error, the Rural Bank is no longer subject to an administrative sanction in the form of a fine for the same type of error in the BMPK Report. (4) Rural Banks deemed to have submitted the BMPK Report and/or BMPK Report corrections late as referred to in Article 23 paragraph (1) and paragraph (2) and Article 25 paragraph (1) are subject to an administrative sanction in the form of a fine of IDR 50,000.00 (fifty thousand rupiah) per day of delay. (5) Rural Banks deemed to have not submitted the BMPK Report and/or BMPK Report corrections as referred to in Article 23 paragraph (3) and Article 25 paragraph (2) are subject to a fine of IDR 1,000,000.00 (one million rupiah). (6) Rural Banks violating provisions as referred to in Article 3 paragraph (1), Article 6, Article 12, Article 14, and Article 24 paragraph (2) are subject to administrative sanctions in the form of:
a. written reprimands; and b. reduction of the management aspect credit value in the health rating calculation.
(7) Rural Banks violating provisions as referred to in Article 3 paragraph (1), Article 6, Article 12, Article 14, and Article 24 paragraph (2) in addition to administrative sanctions as referred to in paragraph (6) may be subject to administrative sanctions in the form of listing members of the Board of Directors, members of the Board of Commissioners, and/or shareholders on the list of parties obtaining a "fail" designation in the Rural Bank fitness and propriety test as regulated in regulations concerning the Rural Bank fitness and propriety test. (8) Rural Banks that do not resolve BMPK Violations and/or BMPK Exceedances in accordance with the action plan as referred to in Article 13 paragraph (1) and/or do not implement resolution steps in accordance with corrections established by the Financial Services Authority as referred to in Article 24 paragraph (2), after being given 2 (two) warnings by the Financial Services Authority, are subject to administrative sanctions in the form of:
a. listing members of the Board of Directors, members of the Board of Commissioners, and/or shareholders on the list of parties obtaining a "fail" designation in the Rural Bank fitness and propriety test as referred to in regulations concerning fitness and propriety; and/or b. suspension of certain business activities. (9) Rural Banks that do not resolve BMPK Violations in addition to administrative sanctions as referred to in paragraph (7), against members of the Board of Directors, members of the Board of Commissioners, shareholders, and/or other affiliated parties, criminal sanctions as referred to in Article 49 paragraph (2) letter b, Article 50, and Article 50 A of Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking may be imposed.

CHAPTER XII
CLOSING

Article 29
Upon the commencement of this Financial Services Authority Regulation, Bank Indonesia Regulation Number 11/13/PBI/2009 dated 17 April 2009 concerning Maximum Credit Granting Limit for Rural Banks (State Gazette of the Republic of Indonesia Number 66 of 2009 and Supplement to the State Gazette of the Republic of Indonesia Number 5002) is repealed and declared invalid.

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

Article 30
This Financial Services Authority Regulation takes effect on the date of its promulgation.
To ensure that everyone knows it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 12 July 2017
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD

Promulgated in Jakarta on 12 July 2017
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 155