POJK on Minimum Capital Provision and Minimum Core Capital Fulfillment for Rural Credit Banks

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 5 /POJK.03/2015
ON
MINIMUM CAPITAL PROVISION AND MINIMUM CORE CAPITAL FULFILLMENT FOR RURAL CREDIT BANKS BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to realize a healthy, strong, and productive Rural Credit Bank industry, adjustments to the capital structure are necessary to align with best banking practices; b. that the adjustment of the Rural Credit Bank capital structure is intended to enhance the ability of Rural Credit Banks to provide funds for the real sector, especially for micro and small enterprises;
c. that institutional strengthening of Rural Credit Banks needs to be supported by strong capital;
d. that in light of the above, it is necessary to establish the amount of capital with strong characteristics to support institutional strengthening and risk absorption capacity for Rural Credit Banks in the form of minimum core capital for Rural Credit Banks; e. that in light of letters a through d above, adjustments to regulations regarding Minimum Capital Provision for Rural Credit Banks are necessary...

Rural Credit Banks in the Financial Services Authority Regulation;

Considering:

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 (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 AUTHABILITY REGULATION ON MINIMUM CAPITAL PROVISION AND MINIMUM CORE CAPITAL FULFILLMENT FOR RURAL CREDIT BANKS.

CHAPTER I
GENERAL PROVISIONS

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

1. Rural Credit Bank, hereinafter abbreviated as BPR, is a bank that conducts conventional business activities and does not provide payment circulation services as referred to in the Banking Law.
2. Universal Bank is a bank that conducts conventional and/or Sharia-based business activities and provides payment circulation services as referred to in the Banking Law.
3. Acquired Collateral, hereinafter abbreviated as AYDA, is an asset acquired by a BPR in the process of settling credit, either through auction or outside of auction, based on voluntary surrender by the collateral owner or based on a power of attorney to sell outside of auction from the collateral owner when the debtor has been declared non-performing, with the obligation to be resolved immediately.
4. General Meeting of Shareholders, hereinafter abbreviated as GMS:
   a. for a BPR with Limited Liability Company legal status, is a GMS as referred to in the Limited Liability Company Law; b. for a BPR with Regional Government Company legal status, is a Capital Owners Meeting or General Meeting of Shareholders as referred to in the Law regulating regional government-owned enterprises;
   c. for a BPR with Cooperative legal status, is a Member Meeting as referred to in the Cooperative Law.
5. Provision for Write-off of Productive Assets, hereinafter abbreviated as PPAP, is a reserve that must be formed at a specific percentage of the debit balance based on the classification of Productive Asset Quality as referred to in regulations regarding asset quality and the formation of asset write-off provisions.
6. Risk-Weighted Assets, hereinafter abbreviated as RWA, is the total of a BPR's balance sheet assets given weights according to the risk level attached to each asset position according to regulations.
7. Minimum Capital Provision, hereinafter abbreviated as MCP, is the capital ratio to RWA that must be provided by a BPR.

Article 2
BPRs are required to provide minimum capital calculated using the MCP ratio of at least 12% (twelve percent) of RWA.

CHAPTER II
CAPITAL

Article 3
(1) Capital as referred to in Article 2 consists of:
a. core capital (tier 1) which includes:

1. core capital primary;
2. core capital additional; and
   b. supplementary capital (tier 2).
   (2) Supplementary capital as referred to in paragraph (1) letter b can only be counted at most 100% (one hundred percent) of core capital.

Article 4
BPRs are required to provide core capital as referred to in Article 3 paragraph (1) letter a of at least 8% (eight percent) of RWA.

Article 5
(1) Core capital primary as referred to in Article 3 paragraph (1) letter a number 1 consists of:
a. paid-in capital; and b. additional capital reserves, which include:

1. share premium, which is the excess additional capital received by a BPR as a result of share prices exceeding their nominal value;
2. paid-in capital funds, which are funds that have been actually paid in for the purpose of increasing capital but are not yet supported by requirements to be classified as paid-in capital, i.e., GMS or approval of the articles of association by the competent authority, meeting the following requirements:
   a) placed in the form of a deposit at a Universal Bank in Indonesia by naming it "Commissioners of the Financial Services Authority q.q. (BPR name)" and including the name of the additional capital depositor, and/or in the form of a deposit at the BPR itself by naming it "Commissioners of the Financial Services Authority q.q. (shareholder depositor name)", and including a statement that withdrawal can only be done after written approval from the Financial Services Authority; b) additional paid-in capital placed in the form of a deposit at the BPR itself is only valid for BPRs not under special supervision, and the additional paid-in capital is made by the respective BPR shareholders; c) has been examined by the Financial Services Authority and declared to have met the regulations; d) does not pay interest, yield, and/or dividends on the paid-in capital funds; e) cannot be withdrawn by shareholders or prospective shareholders.
3. donation capital, which is capital obtained from BPR share donations, including the value difference recorded at the selling price if the shares are sold, and capital from donations from shareholders or external parties received by the BPR in the form of funds or other assets;
4. general reserves, which are reserves formed from the provision of profit balance or net profit after tax for the purpose of strengthening capital and have received GMS approval;
5. purpose reserves, which are reserves formed from the provision of profit balance or net profit after tax, the use of which has been determined and has received GMS approval;
6. prior year profits, which are prior year profits after tax, unless allowed to be compensated with losses according to tax regulations and have not yet been designated by GMS; and
7. current year profits, which are profits obtained in the current fiscal year after being calculated with the shortfall in PPAP formation, calculated at most 50% (fifty percent) after tax estimation, unless allowed to be compensated with losses according to tax regulations.
   (2) Additional core capital components as referred to in Article 3 paragraph (1) letter a number 2 must meet the following requirements:
   a. not guaranteed by the respective BPR and fully paid in; b. has the same position as paid-in capital in the event that BPR losses exceed prior year profits and reserves included in core capital primary, even if the BPR has not been liquidated;
   c. funding sources do not come from the respective BPR directly or indirectly;
   d. has no maturity date and no requirements requiring repayment by the BPR in the future; e. has no right to receive dividend payments; f. has obtained approval from the Financial Services Authority to be counted as a capital component; g. can be converted into common shares clearly stated in the agreement documents, meeting the requirements and procedures for additional paid-in capital as regulated in Financial Services Authority Regulations regarding BPRs; and h. repayment or settlement must obtain approval from the Financial Services Authority, and with such repayment or settlement, the BPR's capital remains healthy and does not result in capital ratios failing to meet the provisions of Article 2 and Article 4. (3) Additional core capital as referred to in paragraph (2):
   a. receives the highest yield equal to the lowest third-party fund interest rate at that BPR; b. does not receive yield if the BPR is in a loss condition or has insufficient profit to pay yield, and payments are not accumulated in subsequent fiscal years. (4) Core capital as referred to in paragraph (1) is calculated with deduction factors including:
   a. deferred tax calculation; b. goodwill;
   c. discount;
   d. AYDA that has exceeded a period of 1 (one) year since acquisition, valued at the recorded amount on the BPR's balance sheet; e. prior year losses; and f. current year losses.

Article 6
(1) BPRs are required to complete the administrative documentation for paid-in capital funds as referred to in Article 5 paragraph (1) letter b number 2 no later than 90 (ninety) working days from the date of Financial Services Authority approval. (2) Paid-in capital funds are recorded as paid-in capital after the BPR meets the administrative documentation for paid-in capital funds.

Article 7
(1) Donation capital in the form of other assets as referred to in Article 5 paragraph (1) letter b number 3 must be in the form of land and buildings intended for BPR operations and have been transferred to the name of the BPR. (2) Within a maximum period of 3 (three) years after Financial Services Authority approval, BPRs must use land and building assets for operational activities as referred to in paragraph (1). (3) In the event that the time limit as referred to in paragraph (2) expires and the assets have not been used for BPR operational activities, the assets as referred to in paragraph (1) cannot be counted as a donation capital component. (4) Assets as referred to in paragraph (3) can be counted as donation capital when the assets are used in BPR operations. (5) BPRs under special supervision, as per regulations regarding follow-up handling of BPRs under special supervision, cannot receive donation capital as referred to in paragraph (1).

Article 8
(1) BPRs may make additional paid-in capital in the form of fixed assets based on Financial Services Authority approval.
(2) Fixed assets used as additional paid-in capital as referred to in paragraph (1) must be land and buildings intended for BPR operations and have been transferred to the name of the BPR. (3) Within a maximum period of 3 (three) years after Financial Services Authority approval, BPRs must use fixed assets for operational activities as referred to in paragraph (2). (4) BPRs that already have paid-in capital in the form of fixed assets and have not been used in BPR operations at the time this Financial Services Authority Regulation comes into force must use such assets in BPR operations no later than 3 (three) years from the implementation of this Financial Services Authority Regulation. (5) In the event that the time limits as referred to in paragraphs (3) and (4) expire and fixed assets have not been used for BPR operational activities, fixed assets cannot be counted as a paid-in capital component. (6) Fixed assets as referred to in paragraph (5) can be counted as additional paid-in capital when the fixed assets are used in BPR operations. (7) BPRs under special supervision, as per regulations regarding follow-up handling of BPRs under special supervision, cannot receive additional paid-in capital in the form of fixed assets as referred to in paragraph (1).

Article 9
Requests for approval of additional paid-in capital in the form of fixed assets as referred to in Article 8 paragraph (1) are submitted to the Financial Services Authority accompanied by documents:

1. a statement from the owner that the fixed assets used as additional paid-in capital are free from claims or disputes;
2. the results of fixed asset valuation by an independent appraiser containing information including value/price, type/type, status, and location of the fixed assets;
3. GMS approval; and
4. proof of announcement of additional paid-in capital in 2 (two) daily newspapers.

Article 10
(1) Supplementary capital as referred to in Article 3 paragraph (1) letter b consists of:
a. capital components meeting the following requirements:

1. not guaranteed by the respective BPR and fully paid in;
2. has the same position as capital in the event that BPR losses exceed prior year profits and reserves included in core capital primary, even if the BPR has not been liquidated;
3. funding sources do not come from the respective BPR directly or indirectly;
4. there is an agreement containing at least the following clauses:
   a) stating payment of principal and/or yield; b) no requirements for acceleration of payment of principal and/or yield; c) payment of principal and/or yield is deferred and accumulated between periods if such payment causes the MCP ratio to fail to meet the provisions of Article 2; d) claim rights in the event of liquidation apply last; e) has a maturity period of 5 (five) years or more and can only be settled after obtaining approval from the Financial Services Authority.
5. has obtained approval from the Financial Services Authority to be counted as a supplementary capital component;
6. early settlement must obtain approval from the Financial Services Authority with the condition that after such settlement, the BPR's capital remains healthy;
   b. surplus from revaluation of fixed assets; and
   c. general PPAP of at most 1.25% (one point two five percent) of RWA.
   (2) Supplementary capital components as referred to in paragraph (1) letter a are at most 50% (fifty percent) of core capital.

Article 11
In the calculation of RWA:
a. the excess of general PPAP which must be calculated from the limit as referred to in Article 10 paragraph (1) letter c can be counted as a deduction factor in the RWA calculation. b. AYDA that has exceeded a period of 1 (one) year since acquisition as referred to in Article 5 paragraph (4) letter d is not counted in the RWA calculation.

Article 12
BPRs are prohibited from distributing profits if such distribution results in the BPR's capital condition failing to reach the capital ratio as referred to in Article 2 and Article 4.

CHAPTER III
MINIMUM CORE CAPITAL

Article 13
The minimum core capital for BPRs is set at IDR 6,000,000,000.00 (six billion rupiah) with the following provisions:

1. BPRs with core capital less than IDR 3,000,000,000.00 (three billion rupiah) are required to meet the minimum core capital of IDR 3,000,000,000.00 (three billion rupiah) no later than December 31, 2019.
2. BPRs as referred to in number 1 are required to meet the minimum core capital of IDR 6,000,000,000.00 (six billion rupiah) no later than December 31, 2024.
3. BPRs with core capital of at least IDR 3,000,000,000.00 (three billion rupiah) but less than IDR 6,000,000,000.00 (six billion rupiah) are required to meet the minimum core capital of IDR 6,000,000,000.00 (six billion rupiah) no later than December 31, 2019.

Article 14
(1) Fulfillment of the minimum core capital obligation as referred to in Article 13 is carried out through, among others, profit growth, additional paid-in capital, merger, consolidation, or acquisition. (2) BPRs that have not met the core capital minimum requirements as referred to in Article 13 cannot receive donation capital as referred to in Article 5 paragraph (1) letter b number 3 and additional paid-in capital in the form of fixed assets as referred to in Article 8 paragraph (1).

Article 15
(1) BPRs are required to maintain the minimum core capital amount of at least IDR 6,000,000,000.00 (six billion rupiah) after the time limits as referred to in Article 13 numbers 2 and 3. (2) BPRs are prohibited from distributing profits if:
a. such distribution results in core capital decreasing to less than IDR 6,000,000,000.00 (six billion rupiah); or b. the BPR has not met the minimum core capital of IDR 6,000,000,000.00 (six billion rupiah). (3) BPRs are prohibited from repaying or settling additional core capital components as referred to in Article 3 paragraph (1) letter a number 2 if repayment or settlement results in the BPR's minimum core capital decreasing to less than IDR 6,000,000,000.00 (six billion rupiah). (4) In the event that a BPR cannot maintain minimum core capital of at least IDR 6,000,000,000.00 (six billion rupiah) as referred to in paragraph (1), the BPR is required to increase core capital to at least IDR 6,000,000,000.00 (six billion rupiah). (5) BPRs are required to increase core capital to at least IDR 6,000,000,000.00 (six billion rupiah) as referred to in paragraph (4) no later than 6 (six) months from:
a. monthly reports submitted to the Financial Services Authority showing core capital below IDR 6,000,000,000.00 (six billion rupiah); or b. the date of the Financial Services Authority examination minutes showing core capital below IDR 6,000,000,000.00 (six billion rupiah).

Article 16
At the time this regulation comes into force, BPRs that have received business licenses from the Financial Services Authority with paid-in capital less than IDR 6,000,000,000.00 (six billion rupiah) are required to meet the minimum core capital amount no later than 5 (five) years after obtaining the business license from the Financial Services Authority.

CHAPTER IV
OTHERS

Article 17
BPRs are required to meet the capital ratios as referred to in Article 2 and Article 4 no later than December 31, 2019.

Article 18
(1) BPRs that, at the time this regulation comes into force, have not met the capital ratios as referred to in Article 2 and Article 4 and/or the minimum core capital amount as referred to in Article 13 are required to formulate a plan to meet capital ratios and/or minimum core capital in the form of an action plan with GMS approval. (2) The action plan as referred to in paragraph (1) is required to be submitted to the Financial Services Authority no later than 6 (six) months after this regulation comes into force. (3) The action plan as referred to in paragraph (1) is submitted to the Financial Services Authority.

Article 19
(1) In the event that the deadline for submitting reports as referred to in Article 18 paragraph (2) falls on a Saturday or holiday, the report submission is carried out on the first working day after the Saturday or holiday. (2) In the event that the deadline for fulfilling minimum core capital as referred to in Article 15 paragraph (3) and Article 16 falls on a Saturday or holiday, the fulfillment of minimum core capital is carried out on the first working day after the Saturday or holiday.

CHAPTER V
SANCTIONS

Article 20
BPRs violating the provisions as referred to in Article 2, Article 4, Article 12, Article 15 paragraphs (2) and (3), and Article 18 paragraphs (1) and (2) are subject to administrative sanctions:
a. written warnings; and/or b. reduction in health rating.

Article 21
BPRs that do not complete the administrative documentation for paid-in capital funds within the time limit as referred to in Article 6 paragraph (1) are subject to administrative sanctions:
a. paid-in capital funds cannot be counted as a core capital component; b. suspension of dividend distribution on all share ownership from shareholders who made capital contributions, until the administrative documentation is completed.

Article 22
(1) BPRs that do not meet the minimum core capital amount as referred to in Article 13 number 1 are subject to administrative sanctions:
a. reduction in BPR health rating; b. prohibition on opening branch networks;
c. prohibition on conducting Foreign Exchange Business Activities, and electronic banking device services;
d. restriction on fund distribution area to one regency/city identical to the BPR office location; e. restriction on remuneration or other forms equivalent to it for members of the Board of Commissioners and/or Board of Directors of the BPR, or payments to related parties. (2) BPRs that have met the minimum core capital as referred to in Article 13 number 1 but have not reached IDR 6,000,000,000.00 (six billion rupiah) as referred to in Article 13 number 2 on December 31, 2024, are subject to the sanctions as referred to in paragraph (1) and the obligation to undergo merger (consolidation) or acquisition, and/or obtain new investors to meet BPR core capital. (3) BPRs that have met the minimum core capital as referred to in Article 13 number 1 but have not reached IDR 6,000,000,000.00 (six billion rupiah) or BPRs that have not met the minimum core capital of IDR 6,000,000,000.00...

Rp6,000,000,000.00 (six billion rupiah) as referred to in Article 13 item 3 on December 31, 2019, shall be subject to administrative sanctions:
a. prohibition on opening branch networks; b. prohibition on conducting Foreign Currency Exchange Business Activities, and electronic banking device services;
c. restriction on funding distribution area to a single regency/city identical to the BPR office location.

(4) BPRs that do not meet the minimum core capital of Rp6,000,000,000.00 (six billion rupiah) as referred to in Article 13 item (3) by December 31, 2024, shall be subject to administrative sanctions as referred to in paragraph (1) and the obligation to conduct a merger or consolidation or be acquired and/or obtain new investors to fulfill the BPR's core capital.

(5) BPRs that are unable to maintain minimum core capital of at least Rp6,000,000,000.00 (six billion rupiah) as referred to in Article 15 paragraph (4) and paragraph (5), after December 31, 2024, shall be subject to administrative sanctions as referred to in paragraph (1) and the obligation to conduct a merger or consolidation or be acquired and/or obtain new investors to fulfill the BPR's core capital.

(6) BPRs that do not meet the minimum core capital of Rp6,000,000,000.00 (six billion rupiah) within the time period as referred to in Article 16 but before the deadline for fulfilling minimum core capital on December 31, 2024, shall be subject to administrative sanctions:
a. prohibition on opening branch networks; b. prohibition on conducting Foreign Currency Exchange Business Activities, and electronic banking device services;
c. restriction on funding distribution area to a single regency/city identical to the BPR office location.

(7) BPRs that do not meet the minimum core capital of Rp6,000,000,000.00 (six billion rupiah) within the time period as referred to in Article 16 and the deadline for fulfilling minimum core capital exceeds December 31, 2024, shall be subject to administrative sanctions as referred to in paragraph (1) and the obligation to conduct a merger or consolidation or be acquired and/or obtain new investors to fulfill the BPR's core capital.

Article 23
BPRs that violate the provisions as referred to in Article 17 shall be subject to administrative sanctions in the form of:
a. written reprimand; b. downgrade of health level;
c. prohibition on opening branch networks; and/or
d. temporary suspension of some BPR operational activities.

CHAPTER VI
CLOSING PROVISIONS

Article 24
Further implementation provisions of this Financial Services Authority Regulation shall be regulated by a Financial Services Authority Circular.

Article 25
Upon the commencement of this Financial Services Authority Regulation, all regulations that are implementing regulations of Bank Indonesia Regulation Number 8/18/PBI/2006 concerning Minimum Capital Provisioning for Rural Banks (State Gazette of the Republic of Indonesia Year 2006 Number 75, Supplement to the State Gazette of the Republic of Indonesia Number 4644) are declared to remain in force insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 26
Upon the commencement of this Financial Services Authority Regulation, Bank Indonesia Regulation Number 8/18/PBI/2006 dated October 5, 2006 concerning Minimum Capital Provisioning for Rural Banks (State Gazette of the Republic of Indonesia Year 2006 Number 75, Supplement to the State Gazette of the Republic of Indonesia Number 4644), is repealed and declared invalid except for Article 2, Article 3, Article 4, and Article 5 which are declared to remain in force until December 31, 2019.

Article 27
This Financial Services Authority Regulation shall commence on the date of its promulgation.
To ensure that everyone knows it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta
On the date of March 31, 2015
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY,

Signed,
MULIAMAN D. HADAD

Promulgated in Jakarta
On the date of April 1, 2015
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

Signed,
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 73 Copy in accordance with the original Director of Legal Affairs I Ministry of Law,

Signed,
Sudarmaji

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 5/POJK.03/2015
CONCERNING
MINIMUM CAPITAL PROVISIONING AND
FULFILLMENT OF MINIMUM CORE CAPITAL FOR RURAL BANKS

I. GENERAL
BPRs play an important role in the economy, especially at the local scale. To increase this role, BPRs must operate at a certain economic scale and have adequate capacity to absorb risk. By operating at an economic scale, BPRs will be able to compete with other financial service institutions in serving the community. To achieve an economic scale, BPRs are required to have capital in a certain amount. The paid-up capital that must be fulfilled by BPRs at the time of establishment is not always sufficient to achieve the intended economic scale if the BPR experiences losses, so it is necessary to establish a minimum core capital for BPRs. Furthermore, BPRs, which primarily provide services to MSMEs and communities in remote areas, have specific characteristics, including less efficient operations and difficulty in obtaining financial assistance if in a structural problem condition, causing BPRs to be supported by a higher Minimum Capital Provisioning Ratio, so that it is expected to absorb the potential risks they face. Therefore, it is necessary to improve capital ratios, including the Minimum Capital Provisioning Ratio (KPMM) and the core capital ratio.

In order to increase the capacity of BPRs to absorb risk, the quality of BPR capital is improved by adding core capital instruments to the core capital components and recognizing excess general PPAP formation as a reduction factor in the calculation of ATMR.

In relation to these matters, it is necessary to re-regulate the provisions concerning Minimum Capital Provisioning for Rural Banks in a Financial Services Authority Regulation.

II. ARTICLE BY ARTICLE

Article 1
It is clear enough.

Article 2
It is clear enough.

Article 3
It is clear enough.

Article 4
It is clear enough.

Article 5
Paragraph (1)
Letter a
What is meant by paid-up capital is capital that has been paid in reality and effectively by its owners and has been approved by the Financial Services Authority and has met administrative requirements. For BPRs in the form of a legal Cooperative entity, paid-up capital is the principal savings and mandatory savings as regulated in the Cooperative Law. Letter b Item 1 It is clear enough. Item 2 Interest or yield obtained from the placement of capital deposit funds in the form of deposits at commercial banks becomes BPR income. Paragraph (2) It is clear enough. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough.

Article 6
Paragraph (1)
Administrative completion in the form of a report proof or approval letter from the competent authority according to regulations.
Report proofs for articles of association that do not require approval from the competent authority must be followed up with the submission of a report receipt letter from the competent authority. Paragraph (2) It is clear enough.

Article 7
It is clear enough.

Article 8
It is clear enough.

Article 9
What is meant by an independent appraiser is an appraisal company that:
a. is not a related party to the BPR; b. is not a lending group with the BPR's debtor;
c. conducts appraisal activities based on professional ethical codes and regulations established by the competent authority;
d. uses appraisal methods based on professional appraisal standards issued by the competent authority; e. has a business license from the competent authority to operate as an appraisal company; and f. is registered as a member of an association recognized by the competent authority.

Article 10
Paragraph (1)
Letter a
Item 1
It is clear enough.
Item 2
It is clear enough.
Item 3
It is clear enough.
Item 4
It is clear enough.
Item 5
It is clear enough.
Item 6
The submission of an application for approval of supplementary capital components to the Financial Services Authority is conducted by the BPR by submitting a repayment program. Letter b It is clear enough. Letter c It is clear enough. Paragraph (2) It is clear enough.

Article 11
It is clear enough.

Article 12
What is meant by profit distribution includes, among others, dividend payments to shareholders, bonus distribution to management (tantiem), and payment of non-operational incentives. Example:
If in a certain management period the BPR shows improving performance but the capital condition does not allow for bonus payments to management, then bonus payments cannot be made until the BPR's capital condition allows for the payment of bonuses.

Article 13
It is clear enough.

Article 14
It is clear enough.

Article 15
Paragraph (1)
It is clear enough.
Paragraph (2)
What is meant by profit distribution includes, among others, dividend payments to shareholders, bonus distribution to management (tantiem), and payment of non-operational incentives. Example:
If in a certain management period the BPR shows improving performance but the capital condition does not allow for bonus payments to management, then bonus payments cannot be made until the BPR's capital condition allows for the payment of bonuses. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough. Paragraph (5) It is clear enough.

Article 16
It is clear enough.

Article 17
It is clear enough.

Article 18
It is clear enough.

Article 19
It is clear enough.

Article 20
It is clear enough.

Article 21
Letter a
If capital deposit funds that exceed the previous period are recorded in the mandatory capital deposit funds position, then the capital deposit funds in question are returned to be recorded in the mandatory capital deposit funds position. If capital deposit funds that exceed the previous period are recorded in the deposit position, then the capital deposit funds in question are returned to be recorded in the deposit position. What is meant by mandatory capital deposit funds is capital deposit funds as regulated in the BPR Accounting Guidelines. Letter b Dividends whose payment is deferred can be given to shareholders after the BPR completes the administrative requirements for adding paid-up capital from the respective shareholders.

Article 22
It is clear enough.

Article 23
It is clear enough.

Article 24
It is clear enough.

Article 25
It is clear enough.

Article 26
It is clear enough.

Article 27
It is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5686