Otoritas Jasa Keuangan Regulation No. 15/POJK.03/2018 on Maximum Limit for Credit Provision or Maximum Limit for Bank Fund Disbursement to Promote Tourism Sector Growth and Increase Foreign Exchange

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 15 /POJK.03/2018
CONCERNING
MAXIMUM LIMIT FOR CREDIT PROVISION OR MAXIMUM LIMIT FOR BANK FUND DISBURSEMENT TO PROMOTE TOURISM SECTOR GROWTH AND INCREASE FOREIGN EXCHANGE BY THE GRACE OF GOD ALMIGHTY THE COMMISSIONERS BOARD OF FINANCIAL SERVICES AUTHORITY, Considering: a. that policy is currently needed to increase Indonesia's economic growth and national competitiveness; b. that to increase economic growth, policy is required to promote the growth of priority sectors, namely the tourism sector;
c. that to increase national competitiveness, policy is required to promote the growth of credit or export financing that can increase foreign exchange reserves;
d. that based on considerations as referred to in letters a through c, it is necessary to establish a Financial Services Authority Regulation concerning the Maximum Limit for Credit Provision or Maximum Limit for Bank Fund Disbursement to Promote Tourism Sector Growth and Increase Foreign Exchange;

In view of: 1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 concerning Amendment to Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 21 of 2008 concerning Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
3. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);

DECIDING:
To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE MAXIMUM LIMIT FOR CREDIT PROVISION OR MAXIMUM LIMIT FOR BANK FUND DISBURSEMENT TO PROMOTE TOURISM SECTOR GROWTH AND INCREASE FOREIGN EXCHANGE.

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

1. Bank means general banks as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998 concerning Amendment to Law Number 7 of 1992 concerning Banking, including branch offices of banks located abroad, as well as sharia general banks and sharia business units as referred to in Law Number 21 of 2008 concerning Sharia Banking.
2. Maximum Limit for Credit Provision, hereinafter abbreviated as BMPK, is the maximum percentage of fund provision permitted against the capital of a general bank.
3. Maximum Limit for Fund Disbursement, hereinafter abbreviated as BMPD, is the maximum percentage of fund provision permitted against the capital of a sharia general bank.
4. Fund Provision is the investment of Bank funds in the form of:
   a. credit or financing; b. securities;
   c. placements;
   d. securities purchased with an agreement to resell; e. acceptance claims; f. credit derivatives; g. administrative account transactions; h. derivative claims;
   i. potential future credit exposure;
   j. equity participation; k. temporary equity participation; and/or
   l. other forms of fund provision that can be equated with letters a through k.
5. Capital is:
   a. core capital (tier 1) and supplementary capital (tier 2) for Banks headquartered in Indonesia; or b. operating funds for branch offices of banks located abroad, without taking into account capital reduction factors such as equity participation as regulated in Financial Services Authority regulations regarding minimum capital adequacy requirements for Banks.
6. Borrower means individual customers, companies, or entities that receive Fund Provision from the Bank, including:
   a. debtors, for Fund Provision in the form of credit or financing; b. issuers of securities, parties selling securities, collective investment contract managers, and/or reference entities, for Fund Provision in the form of securities;
   c. credit risk transfer parties (protection buyers) and/or reference entities, for Fund Provision in the form of credit derivatives;
   d. applicants, for Fund Provision in the form of guarantees, letters of credit, standby letters of credit, or similar instruments; e. parties where the Bank makes equity participation (investees), for Fund Provision in the form of equity participation; f. Banks or debtors, for Fund Provision in the form of acceptance claims; g. transaction counterparties, for Fund Provision in the form of placements and derivative transactions; and/or h. other parties obligated to settle claims owed to the Bank.

Article 2
(1) Export-oriented Fund Provision to financial institutions meeting specific requirements is excluded from the BMPK or BMPD calculation. (2) The portion of Fund Provision that receives guarantees from financial institutions meeting specific requirements is excluded from the BMPK or BMPD calculation. (3) The specific requirements as referred to in paragraph (1) and paragraph (2) are:
a. owned by the central government; b. its business activities provide national export financing; and
c. established by Law with sovereign status.

Article 3
(1) Guarantees as referred to in Article 2 paragraph (2) must meet the following requirements:
a. being unconditional and irrevocable; b. being liquidatable no later than 7 (seven) working days from the claim submission, including partial liquidation to pay principal installment arrears or interest/margin/profit share/ujrah;
c. having a term at least equal to the term of the Fund Provision; and
d. not having counter-guarantees.
(2) The Bank must submit a claim against the guarantee received as referred to in paragraph (1) no later than 7 (seven) working days since the Borrower's default. (3) The Borrower is declared to have defaulted as referred to in paragraph (2) in cases where:
a. principal and/or interest/margin/profit share/ujrah and/or other claims arrears occur for 90 (ninety) days even though the Fund Provision has not yet matured; b. payment of principal and/or interest/margin/profit share/ujrah and/or other claims is not received when the Fund Provision matures; or
c. other requirements besides the payment of principal and/or interest/margin/profit share/ujrah are not fulfilled, which may result in default.

Article 4
Fund Provision by Banks to State-Owned Enterprises (BUMN) for development purposes is set at a maximum of 30% (thirty percent) of the Bank's Capital.

Article 5
At the time this Financial Services Authority Regulation takes effect, the provisions in Bank Indonesia Regulation Number 7/3/PBI/2005 concerning the Maximum Limit for Credit Provision for General Banks (State Gazette of the Republic of Indonesia Year 2005 Number 13, Supplement to the State Gazette of the Republic of Indonesia Number 4472) as amended by Bank Indonesia Regulation Number 8/13/PBI/2006 concerning Amendment to Bank Indonesia Regulation Number 7/3/PBI/2005 concerning the Maximum Limit for Credit Provision for General Banks (State Gazette of the Republic of Indonesia Year 2006 Number 70, Supplement to the State Gazette of the Republic of Indonesia Number 4639) remain valid insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 6
This Financial Services Authority Regulation takes effect on the date of its enactment.

This copy corresponds to the original
Director of Legal Affairs 1
Legal Department signed
Yuliana
To ensure 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 August 15, 2018 CHAIRMAN OF THE COMMISSIONERS BOARD OF FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed WIMBOH SANTOSO Promulgated in Jakarta on August 16, 2018 MINISTER OF LAW AND HUMAN RIGHTS REPUBLIC OF INDONESIA, signed YASONNA H. LAOLY STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2018 NUMBER 137

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 15 /POJK.03/2018
CONCERNING
MAXIMUM LIMIT FOR CREDIT PROVISION OR MAXIMUM LIMIT FOR BANK FUND DISBURSEMENT TO PROMOTE TOURISM SECTOR GROWTH AND INCREASE FOREIGN EXCHANGE
I. GENERAL
To increase Indonesia's economic growth and national competitiveness, efforts are needed to promote the intermediary function of banking through adjustments to BMPK or BMPD assessment rules. These provisions are expected to increase the potential for credit expansion or Bank financing conducted measurably while still adhering to prudential principles. These provisions focus on promoting the growth of credit or financing in priority sectors, namely the tourism sector, and increasing foreign exchange through export-oriented Fund Provision. In light of these considerations, banking policy is needed to promote economic growth.
II. ARTICLE BY ARTICLE
Article 1
Clearly sufficient.

Article 2
Paragraph (1)
Export-oriented Fund Provision is stipulated in an agreement between the Bank and a financial institution meeting specific requirements. Paragraph (2) Clearly sufficient. Paragraph (3) Letter a Central government refers to the central government as referred to in laws regarding regional governance. Letter b Clearly sufficient. Letter c Clearly sufficient.

Article 3
Paragraph (1)
Letter a
Unconditional means the benefits obtained by the fund-providing Bank from the guarantee do not substantially decrease even if losses occur due to factors beyond the Bank's control and do not contain procedural requirements. Procedural requirements include among others:

1. requiring a time limit for submitting default notifications;
2. requiring proof of good faith by the fund-providing Bank; and/or
3. requiring the liquidation of the guarantee to be done via mutual offset (set-off) first with the fund-providing Bank's obligations to the guarantor party.
   Letter b
   Clearly sufficient.
   Letter c
   Clearly sufficient.
   Letter d
   Clearly sufficient.
   Paragraph (2)
   Clearly sufficient.
   Paragraph (3)
   Clearly sufficient.

Article 4
State-Owned Enterprises (BUMN) refer to business entities whose entire or majority capital is owned by the state through direct participation originating from separated state assets as referred to in regulations concerning state-owned enterprises. Fund Provision to State-Owned Enterprises (BUMN) for development purposes includes among others Fund Provision for:
a. food procurement; b. very simple housing procurement;
c. procurement/supply/management of oil and gas and other equivalent alternative energy sources;
d. water procurement/supply/management; e. electricity procurement/supply/management; f. export-oriented commodity procurement/processing; g. land, sea, and air transportation supporting infrastructure procurement consisting of road, bridge, railway, seaport, and airport construction; and/or h. construction of National Strategic Tourism Areas (KSPN) determined and prioritized by the central government as referred to in Presidential Regulations regarding the acceleration of implementation of national strategic projects.

Article 5
Clearly sufficient.

Article 6
Clearly sufficient.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6240