Special Treatment for Bank Credit or Financing for Specific Regions in Indonesia Affected by Natural Disasters

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 45 /POJK.03/2017
CONCERNING
SPECIAL TREATMENT FOR BANK CREDIT OR FINANCING FOR SPECIFIC REGIONS IN INDONESIA AFFECTED BY NATURAL DISASTERS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that natural disasters that have struck various regions in Indonesia on several occasions have generally caused significant loss impacts on economic growth in specific regions affected by natural disasters; b. that Indonesia's location in an area prone to natural disasters causes Indonesia to have the potential to experience natural disasters;
c. that one of the efforts to support the recovery of economic conditions is carried out by providing special treatment for bank credit or financing with a certain amount and credit or financing that is restructured;
d. that in connection with the transfer of the functions, duties, and authority 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 special treatment for bank credit or financing for specific regions in Indonesia affected by natural disasters; e. that based on considerations as referred to in letters a through d, it is necessary to establish a Financial Services Authority Regulation concerning Special Treatment for Bank Credit or Financing for Specific Regions in Indonesia Affected by Natural Disasters;

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 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:
Decree: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING SPECIAL TREATMENT FOR BANK CREDIT OR FINANCING FOR SPECIFIC REGIONS IN INDONESIA AFFECTED BY NATURAL DISASTERS.

CHAPTER I
GENERAL PROVISIONS

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

1. Bank means General Banks and Rural Banks as referred to in 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, including branch offices of banks located outside the country as well as Sharia Banks and Sharia Business Units as referred to in Law Number 21 of 2008 concerning Sharia Banking.

2. Credit for General Banks means the provision of money or receivables that can be equated with it, based on an agreement or loan-borrowing agreement between the Bank and another party that requires the borrower to repay its debt after a certain period with the provision of interest, including:
   a. overdraft, which is a negative balance in the customer's checking account that cannot be paid in full at the end of the day; b. takeover of receivables for factoring activities; and
   c. takeover or purchase of credit from other parties.

3. Credit for Rural Banks means the provision of money or receivables that can be equated with it, based on an agreement or loan-borrowing agreement between the Bank and another party that requires the borrower to repay its debt after a certain period with the provision of interest.

4. Financing for Sharia General Banks (BUS) or Sharia Business Units (UUS) means the provision of funds or receivables that can be equated with it in the form of:
   a. profit-sharing transactions in the form of mudharabah and musyarakah; b. leasing transactions in the form of ijarah or lease-to-own in the form of ijarah muntahiya bittamlik;
   c. sales transactions in the form of murabahah receivables, salam, and istishna’;
   d. loan transactions in the form of qardh receivables; and e. service leasing transactions in the form of ijarah for multi-service transactions, based on an agreement or arrangement between the BUS or UUS and other parties that requires the financed party and/or given fund facilities to return the funds after a certain period with a fee (ujrah), without a fee, or profit-sharing.

5. Financing for Sharia Rural Banks (BPRS) means the provision of funds or receivables that can be equated with it in the form of:
   a. profit-sharing transactions in the form of mudharabah and musyarakah; b. leasing transactions in the form of ijarah or lease-to-own in the form of ijarah muntahiya bittamlik;
   c. sales transactions in the form of murabahah receivables, salam, and istishna’;
   d. loan transactions in the form of qardh receivables; and e. service leasing transactions in the form of ijarah for multi-service transactions, based on an agreement or arrangement between the BPRS and other parties that requires the financed party and/or given fund facilities to return the funds after a certain period with a fee (ujrah), without a fee, or profit-sharing.

Article 2
(1) The determination of the quality of Credit for General Banks or Financing for BUS or UUS and/or the provision of other funds from the Bank to debtors with a ceiling up to IDR 5,000,000,000.00 (five billion rupiah) is based solely on the accuracy of principal and/or interest payments, or profit returns.

(2) The procedure for determining the quality of Credit for General Banks or Financing for BUS or UUS and/or the provision of other funds as referred to in paragraph (1) is carried out in accordance with statutory regulations concerning the assessment of the quality of assets of general banks and Financial Services Authority regulations governing the assessment of the quality of assets of Sharia general banks and Sharia business units.

(3) The Credit ceiling for General Banks or Financing for BUS or UUS and/or the provision of other funds as referred to in paragraph (1) applies to both individual debtors and groups of debtors and for all facilities received from 1 (one) General Bank or BUS or UUS.

(4) The determination of the quality of Credit for General Banks or Financing for BUS or UUS and/or the provision of other funds as referred to in paragraph (1) applies to Credit for General Banks or Financing for BUS or UUS and/or the provision of other funds disbursed before and after the occurrence of natural disasters.

(5) The determination of the quality of Credit for General Banks or Financing for BUS or UUS and/or the provision of other funds as referred to in paragraph (1) only applies to Credit for General Banks or Financing for BUS or UUS and/or the provision of other funds disbursed to debtors with project locations or business locations in specific regions affected by natural disasters for a period of 3 (three) years from the occurrence of the natural disaster.

(6) The determination of the quality of Credit for Rural Banks or Financing for BPRS based on the accuracy of principal and/or interest payments, or profit returns, only applies to Credit for Rural Banks or Financing for BPRS disbursed to debtors with project locations or business locations in specific regions affected by natural disasters for a period of 3 (three) years from the occurrence of the natural disaster, whether disbursed before or after the occurrence of the natural disaster.

(7) The procedure for determining the quality of Credit for Rural Banks or Financing for BPRS as referred to in paragraph (6) is carried out in accordance with statutory regulations concerning the quality of productive assets and the formation of provisions for the write-off of productive assets of rural banks or statutory regulations concerning the assessment of asset quality for Sharia rural financing banks.

Article 3
(1) The quality of Credit for General Banks or Financing for BUS or UUS and Credit for Rural Banks or Financing for BPRS that is restructured is determined as Performing from the restructuring until 3 (three) years after the occurrence of the natural disaster.

(2) The implementation of the restructuring of Credit for General Banks or Financing for BUS or UUS and the restructuring of Credit for Rural Banks or Financing for BPRS is carried out in accordance with statutory regulations concerning the assessment of the quality of assets of general banks, Financial Services Authority regulations governing the assessment of the quality of assets of Sharia general banks and Sharia business units, statutory regulations concerning the restructuring of financing for Sharia banks and Sharia business units, statutory regulations concerning the quality of productive assets and the formation of provisions for the write-off of productive assets of rural banks, or statutory regulations concerning the assessment of asset quality for Sharia rural financing banks.

(3) The restructuring of Credit for General Banks or Financing for BUS or UUS and the restructuring of Credit for Rural Banks or Financing for BPRS as referred to in paragraph (1) can be carried out against credit or financing disbursed before and after the occurrence of the natural disaster.

Article 4
The provisions as referred to in Article 3 only apply to Credit for General Banks or Financing for BUS or UUS and Credit for Rural Banks or Financing for BPRS that meet the requirements:
a. disbursed to debtors with project locations or business locations in specific regions affected by natural disasters; b. have experienced or are estimated to experience difficulties in paying principal and/or credit interest or financing profit returns caused by the impact of natural disasters in specific regions; and
c. restructured after the occurrence of the natural disaster.

Article 5
The determination of the quality of Credit for General Banks or Financing for BUS or UUS and Credit for Rural Banks or Financing for BPRS that is not restructured nor restructured after the period as referred to in Article 2 paragraph (5), Article 2 paragraph (6), and Article 3 paragraph (1) refers to statutory regulations concerning the assessment of the quality of assets of general banks, Financial Services Authority regulations governing the assessment of the quality of assets of Sharia general banks and Sharia business units, statutory regulations concerning the quality of productive assets and the formation of provisions for the write-off of productive assets of rural banks, or statutory regulations concerning the assessment of asset quality for Sharia rural financing banks.

Article 6
The determination of specific regions affected by natural disasters is established in a decision of the Commissioners Council of the Financial Services Authority by considering aspects:
a. the area of territory affected by the natural disaster; b. the number of casualties;
c. the amount of material losses;
d. the number of debtors estimated to be affected by the natural disaster; e. the percentage of the amount of credit or financing given to debtors affected by the natural disaster against the total amount of credit or financing in the regions affected by the natural disaster; f. the percentage of the amount of credit or financing with a ceiling up to IDR 5,000,000,000.00 (five billion rupiah) against the total amount of credit or financing in the regions affected by the natural disaster; and g. other aspects that the Financial Services Authority deems necessary to consider.

Article 7
(1) Banks may provide credit or financing and/or other funds provided after the occurrence of a natural disaster to debtors affected by natural disasters in specific regions in Indonesia affected by natural disasters.

(2) The determination of the quality of credit or financing and/or other funds provided after the occurrence of a natural disaster as referred to in paragraph (1) is carried out separately from the quality of credit or financing and/or other funds previously provided.

(3) The determination of the quality of Credit for General Banks or Financing for BUS or UUS and/or other funds provided after the occurrence of a natural disaster as referred to in paragraph (2):
a. for credit or financing and/or other funds provided after the occurrence of a natural disaster with a ceiling up to IDR 5,000,000,000.00 (five billion rupiah), the determination of the quality of credit or financing refers to the provisions as referred to in Article 2 paragraph (1); b. for credit or financing and/or other funds provided after the occurrence of a natural disaster with a ceiling exceeding IDR 5,000,000,000.00 (five billion rupiah), the determination of the quality of credit or financing refers to statutory regulations concerning the assessment of the quality of assets of general banks or Financial Services Authority regulations governing the assessment of the quality of assets of Sharia general banks and Sharia business units.

(4) The determination of the quality of Credit for General Banks or Financing for BUS or UUS and/or other funds as referred to in paragraph (3) letter a only applies to Credit for General Banks or Financing for BUS or UUS and/or other funds disbursed to debtors with project locations or business locations in specific regions affected by natural disasters for a period of 3 (three) years from the occurrence of the natural disaster.

Article 8
The Financial Services Authority may determine the ceiling of credit or financing and/or other funds as referred to in Article 2 paragraph (1) and Article 7 paragraph (3), as well as the period for determining the quality of credit or financing that is not restructured nor restructured as referred to in Article 2 paragraph (5), Article 2 paragraph (6), Article 3 paragraph (1), and Article 7 paragraph (4) which are different in a decision of the Commissioners Council of the Financial Services Authority by considering the conditions of natural disasters occurring in specific regions.

Article 9
(1) At the time this Financial Services Authority Regulation comes into force:

1. Bank Indonesia Regulation Number 7/17/PBI/2005 concerning Special Treatment for Rural Banks Post-Natural Disaster in the Province of Nangroe Aceh Darussalam and Nias Regency, North Sumatra Province (State Gazette of the Republic of Indonesia Year 2005 Number 55, Supplement to the State Gazette of the Republic of Indonesia Number 4509);
2. Bank Indonesia Regulation Number 8/10/PBI/2006 concerning Special Treatment for Bank Credit Post-Natural Disaster in the Special Region of Yogyakarta Province and Surrounding Regions in Central Java Province (State Gazette of the Republic of Indonesia Year 2006 Number 51, Supplement to the State Gazette of the Republic of Indonesia Number 4626);
3. Bank Indonesia Regulation Number 8/15/PBI/2006 concerning Special Treatment for Bank Credit for Specific Regions in Indonesia Affected by Natural Disasters (State Gazette of the Republic of Indonesia Year 2006 Number 72, Supplement to the State Gazette of the Republic of Indonesia Number 4641); and
4. Bank Indonesia Regulation Number 11/27/PBI/2009 concerning Amendments to Bank Indonesia Regulation Number 8/10/PBI/2006 concerning Special Treatment for Bank Credit Post-Natural Disaster in the Special Region of Yogyakarta Province and Surrounding Regions in Central Java Province (State Gazette of the Republic of Indonesia Year 2009 Number 105, Supplement to the State Gazette of the Republic of Indonesia Number 5031),
   are repealed and declared invalid.

(2) With the implementation of this Financial Services Authority Regulation, Decisions of the Commissioners Council of the Financial Services Authority regarding the determination of areas requiring special treatment for bank credit or regulations for Banks that previously referred to the provisions as referred to in paragraph (1) become subject to this Financial Services Authority Regulation.

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

Article 10
This Financial Services Authority Regulation comes into force on the date of its promulgation.

To ensure that everyone knows it, it orders the promulgation of this Financial Services Authority Regulation and its placement in the State Gazette of the Republic of Indonesia.

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

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

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 151

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 45/POJK.03/2017
CONCERNING
SPECIAL TREATMENT FOR BANK CREDIT OR FINANCING FOR SPECIFIC REGIONS IN INDONESIA AFFECTED BY NATURAL DISASTERS

I. GENERAL
As is known, in recent years some areas in Indonesia have been hit by natural disasters and some other areas are prone to the potential for natural disasters. The impact of these natural disasters can disrupt the Indonesian economy, especially in regions affected by natural disasters. Debtors affected by these natural disasters are estimated to experience difficulties in repaying their obligations in accordance with credit or financing agreements.

In connection with this, the Financial Services Authority needs to provide special treatment for Bank credit or financing in the form of flexibility in the determination of credit or financing quality and against the provision of credit or financing provided after the occurrence of a natural disaster to debtors affected by the natural disaster in question.

II. ARTICLE BY ARTICLE

Article 1
Quite clear.

Article 2
Paragraph (1)
What is meant by "provision of other funds" is the issuance of guarantees and the opening of letters of credit.

Paragraph (2)
Quite clear.

Paragraph (3)
Quite clear.

Paragraph (4)
Quite clear.

Paragraph (5)
Quite clear.

Paragraph (6)
Quite clear.

Paragraph (7)
Quite clear.

Article 3
Paragraph (1)
Restructuring of Credit for General Banks or Financing for BUS and UUS and restructuring of Credit for Rural Banks or Financing for BPRS can be carried out against all credit or financing provided.

Paragraph (2)
Quite clear.

Paragraph (3)
Quite clear.

Article 4
Quite clear.

Article 5
Quite clear.

Article 6
Quite clear.

Article 7
Paragraph (1)
The provision of credit or financing and/or other funds provided after the occurrence of a natural disaster is carried out selectively in accordance with the Bank's credit or financing policy.

Paragraph (2)
Quite clear.

Paragraph (3)
What is meant by "provision of other funds" is the issuance of guarantees and the opening of letters of credit.

Paragraph (4)
Quite clear.

Article 8
Quite clear.

Article 9
Quite clear.

Article 10
Quite clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6094