Undang-Undang Republik Indonesia Nomor 3 Tahun 2004 tentang Perubahan atas Undang-Undang Republik Indonesia Nomor 23 Tahun 1999 tentang Bank Indonesia (Law of the Republic of Indonesia No. 3 of 2004 amending Law No. 23 of 1999 concerning Bank Indonesia)

English translation of the Indonesian text from ojk.go.id (the Indonesian text is the official one). Retrieved 2026-10-26.

LAW OF THE REPUBLIC OF INDONESIA NUMBER 3 OF 2004 CONCERNING AMENDMENT TO LAW OF THE REPUBLIC OF INDONESIA NUMBER 23 OF 1999 CONCERNING BANK INDONESIA BY THE GRACE OF GOD THE ALMIGHTY PRESIDENT OF THE REPUBLIC OF INDONESIA, Considering: a. that the national development carried out so far constitutes a continuous development effort covering all aspects of life in order to achieve national goals based on Pancasila and the 1945 Constitution of the Republic of Indonesia;

b. that to support the realization of continuous national development and in line with the challenges of increasingly complex economic development and growth, an increasingly advanced financial system, and an increasingly competitive and integrated international economy, monetary policy must be focused on efforts to maintain the stability of the value of the rupiah;

c. that in connection with this, it is necessary to implement the principle of balance between the independence of Bank Indonesia in carrying out its duties and authority and the supervision of and responsibility for its performance as well as transparent public accountability;

d. that based on the considerations in letter a, letter b and letter c above, it is deemed necessary to amend and improve the Law of the Republic of Indonesia Number 23 of 1999 concerning Bank Indonesia;

In view of: 1. Article 5 paragraph (1), Article 20 paragraph (1), Article 20A paragraph (1), Article 23D, and

Article 33 of the 1945 Constitution of the Republic of Indonesia;

2. Law Number 23 of 1999 concerning Bank Indonesia (State Gazette of the Republic of Indonesia of 1999 Number 66, Supplement to the State Gazette Number 3843);

• 2 - With the Joint Approval of THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA AND THE PRESIDENT OF THE REPUBLIC OF INDONESIA DECIDES:

To enact: LAW CONCERNING AMENDMENT TO LAW OF THE REPUBLIC OF INDONESIA NUMBER 23 OF 1999 CONCERNING BANK INDONESIA.

Article I Several provisions in Law Number 23 of 1999 concerning Bank Indonesia (State Gazette of the Republic of Indonesia Number 66, Supplement to the State Gazette Number 3843), are amended as follows:

1. The provisions of Article 4 paragraph (2) are amended, so that the entirety of Article 4 reads as follows:

"Article 4

(1) Bank Indonesia is the Central Bank of the Republic of Indonesia.

(2) Bank Indonesia is a state institution that is independent in carrying out its duties and authority, free from interference by the Government and/or other parties, except for matters expressly regulated in this Law.

(3) Bank Indonesia is a legal entity based on this Law."

2. The provisions of Article 6 paragraph (2) and paragraph (3) are amended, so that the entirety of

Article 6 reads as follows:

"Article 6

(1) The capital of Bank Indonesia is set at an amount of at least Rp2.000.000.000.000,00 (two trillion rupiah).

(2) The capital as referred to in paragraph (1) must be increased so that it becomes at most 10% (ten per hundred) of all monetary liabilities, with funds originating from the General Reserve or from the results of asset revaluation.

(3) The procedure for increasing capital from the General Reserve or from the results of asset revaluation is stipulated by a Regulation of the Board of Governors."

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3. The provisions of Article 7 are amended, and 1 (one) new paragraph is added, namely paragraph (2), so that the entirety of Article 7 reads as follows:

"Article 7

(1) The objective of Bank Indonesia is to achieve and maintain the stability of the value of the rupiah.

(2) To achieve the objective as referred to in paragraph (1), Bank Indonesia shall implement monetary policy in a sustainable, consistent, transparent manner, and must take into consideration the general policy of the government in the economic sector."

4. The provisions of Article 10 paragraph (1) letter a are amended, so that the entirety of

Article 10 reads as follows:

"Article 10

(1) In the context of setting and implementing monetary policy as referred to in Article 8 letter a, Bank Indonesia is authorized:

a. to set monetary targets by taking into account the inflation rate target;

b. to conduct monetary control by using methods including but not limited to:

1) open market operations in the money market in both rupiah and foreign currency;

2) setting the discount rate;

3) setting the minimum reserve requirement;

4) regulation of credit or financing.

(2) The methods of monetary control as referred to in paragraph (1) letter b may also be carried out based on Sharia Principles.

(3) The implementation of the provisions as referred to in paragraph (1)

letter b and paragraph (2) is stipulated by a Bank Indonesia Regulation."

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5. The provisions of Article 11 are added with 2 (two) new paragraphs namely paragraph (4) and paragraph (5), so that the entirety of Article 11 reads as follows:

"Article 11

(1) Bank Indonesia may provide credit or financing based on Sharia Principles for a period of at most 90 (ninety) days to a Bank to overcome short-term funding difficulties of the Bank concerned.

(2) The implementation of the provision of credit or financing based on Sharia Principles as referred to in paragraph (1), must be guaranteed by the receiving Bank with high-quality and easily liquidated collateral whose value is at least equal to the amount of credit or financing received.

(3) The implementation of the provisions as referred to in paragraph (1)

and paragraph (2) is stipulated by a Bank Indonesia Regulation.

(4) In the event that a Bank experiences financial difficulties that have a systemic impact and potentially cause a crisis that endangers the financial system, Bank Indonesia may provide emergency financing facilities whose funding becomes a burden on the Government.

(5) The provisions and procedures for decision-making regarding financial difficulties of a Bank that have a systemic impact, the provision of emergency financing facilities, and sources of funding originating from the State Budget are regulated in a separate law, which is enacted at the latest by the end of 2004."

6. The Explanation of Article 34 paragraph (1) is amended as stated in the explanation, and the provisions of Article 34 paragraph (2) are amended, so that the entirety of Article 34 reads as follows:

"Article 34

(1) The task of supervising Banks shall be carried out by an independent financial services sector supervisory agency, and established by law.

(2) The establishment of the supervisory agency as referred to in paragraph (1), shall be carried out no later than 31 December 2010."

7. The Elucidation of Article 37 paragraph (1) is amended as set out in the elucidation.

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8. The provisions of Article 38 paragraph (2) are amended, and 2 (two) new paragraphs are added, namely paragraph (3) and paragraph (4), so that the entirety of Article 38 reads as follows:

"Article 38

(1) The Board of Governors shall carry out the duties and authority of Bank Indonesia as stipulated in this Law.

(2) The division of duties and authority of the Members of the Board of Governors in carrying out the provisions as referred to in paragraph (1) shall be determined by a Board of Governors Regulation.

(3) The rules of order and procedures for the implementation of the duties and authority of the Board of Governors shall be determined by a Board of Governors Regulation.

(4) The performance of the Board of Governors and the Members of the Board of Governors in carrying out their duties and authority shall be assessed by the House of Representatives."

9. The provisions of Article 40 letter b are amended, so that the entirety of Article 40 reads as follows:

"Article 40 To be appointed as a member of the Board of Governors, the candidate concerned must meet the requirements:

a. an Indonesian citizen;

b. possess high integrity, character, and morals;

c. possess expertise and experience in the fields of economics, finance, banking, or law."

10. The provisions of Article 41 paragraph (1), paragraph (2), paragraph (3), and paragraph (4) are amended, so that the entirety of Article 41 reads as follows:

"Article 41

(1) The Governor, Senior Deputy Governor, and Deputy Governor shall be proposed and appointed by the President with the approval of the House of Representatives.

(2) Candidates for Deputy Governor shall be proposed by the President based on the recommendation of the Governor.

(3) In the event that the candidate for Governor, Senior Deputy Governor, or Deputy Governor as referred to in paragraph (1) is not approved by the House of Representatives, the President must submit a new candidate.

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(4) In the event that the candidate submitted by the President as referred to in paragraph (3) is not approved by the House of Representatives for the second time, the President must reappoint the Governor, Senior Deputy Governor, or Deputy Governor to the same position, or with the approval of the House of Representatives appoint the Senior Deputy Governor or Deputy Governor to a higher position within the position structure of the Board of Governors by taking into account the provisions as referred to in paragraph (5) and paragraph (6).

(5) Members of the Board of Governors shall be appointed for a term of 5 (five)

years and may be reappointed to the same position for a maximum of 1 (one) subsequent term.

(6) The replacement of members of the Board of Governors whose terms of office have ended shall be carried out periodically every year at most 2 (two) persons."

11. Paragraph (1) letter c of Article 47 is deleted, and paragraph (2) is amended, and 1 (one) new paragraph is added, namely paragraph (3), so that the entirety of

Article 47 reads as follows:

"Article 47

(1) Members of the Board of Governors, whether individually or collectively, are prohibited from:

a. having a direct or indirect interest in any company whatsoever;

b. holding concurrent positions in other institutions unless by virtue of their position they are required to hold such position;

c. deleted.

(2) In the event that a Member of the Board of Governors commits one or more of the prohibitions as referred to in paragraph (l) letter a and letter b, such Member of the Board of Governors must resign from their position.

(3) In the event that the Member of the Board of Governors as referred to in paragraph (2) is unwilling to resign, the President shall determine that such Member of the Board of Governors ceases to hold office with the approval of the House of Representatives."

• 7 -

12. The provisions of Article 48 are amended, and 2 (two) new paragraphs are added, namely paragraph (2) and paragraph (3), so that the entirety of Article 48 reads as follows:

"Article 48

(1) Members of the Board of Governors may not be dismissed during their term of office, except if the person concerned:

a. resigns;

b. is proven to have committed a criminal offense;

c. is unable to be physically present for a period of 3 consecutive months without justifiable reason;

d. is declared bankrupt or unable to fulfill obligations to creditors; or e. is permanently incapacitated.

(2) A Member of the Board of Governors recommended for dismissal as referred to in paragraph (1) letter c and d has the right to be heard.

(3) The dismissal of a member of the Board of Governors as referred to in paragraph (1) shall be determined by Presidential Decree."

13. The provisions of Article 52 are amended, and 1 (one) new paragraph is added, namely paragraph (2), so that the entirety of Article 52 reads as follows:

"Article 52

(1) Bank Indonesia shall act as the holder of the Government's cash.

(2) In carrying out the function referred to in paragraph (1), Bank Indonesia shall provide interest on the Government's cash balance in accordance with the laws and regulations."

14. The provisions of Article 54 paragraph (2) are amended, so that the entirety of Article 54 reads as follows:

"Article 54

(1) The Government must seek the opinion of Bank Indonesia and/or invite Bank Indonesia to a cabinet meeting discussing economic, banking and financial matters relating to the duties of Bank Indonesia or other matters within the authority of Bank Indonesia.

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(2) Bank Indonesia must provide opinions and considerations to the Government regarding the Draft State Budget and other policies relating to the duties and authority of Bank Indonesia."

15. The provisions of Article 55 paragraph (4) and paragraph (5) are amended, so that the entirety of Article 55 reads as follows:

"Article 55

(1) In the event that the Government is to issue state debt securities, the Government must first consult with Bank Indonesia.

(2) Before issuing state debt securities as referred to in paragraph (1), the Government must consult with the House of Representatives.

(3) Bank Indonesia may assist in the issuance of state debt securities issued by the Government as referred to in paragraph (1).

(4) Bank Indonesia is prohibited from purchasing government debt securities as referred to in paragraph (1) for itself in the primary market, except for short-term government debt securities needed by Bank Indonesia for monetary control operations.

(5) Bank Indonesia may purchase government debt securities in the context of providing emergency financing facilities as referred to in Article 11 paragraph (4) in the primary market.”

16. The provisions of Article 58 are amended, so that the entirety of Article 58 reads as follows:

“Article 58

(1) Bank Indonesia shall submit an annual report in writing to the House of Representatives and the Government at the beginning of each fiscal year, which contains:

a. the implementation of its duties and authority in the previous year; and b. policy plans, target setting, and steps for implementing the duties and authority of Bank Indonesia for the coming year by taking into account the development of the inflation rate as well as economic and financial conditions.

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(2) Bank Indonesia shall submit a quarterly report in writing on the implementation of its duties and authority to the House of Representatives and the Government.

(3) The annual report and quarterly report submitted by Bank Indonesia as referred to in paragraph (1) and paragraph (2) are evaluated by the House of Representatives and used as material for the annual assessment of the performance of the Board of Governors and Bank Indonesia.

(4) In the event that the House of Representatives requires an explanation regarding matters relating to the implementation of its duties and authority, including in the context of assessing the performance of Bank Indonesia, Bank Indonesia shall provide an explanation orally and/or in writing.

(5) The annual report and quarterly report as referred to in paragraph (1) and paragraph (2) are submitted to the public openly through mass media by including a summary in the State Gazette.

(6) At the beginning of each fiscal year, Bank Indonesia shall submit information to the public openly through mass media which contains:

a. an evaluation of the implementation of monetary policy in the previous year;

b. monetary policy plans and monetary target setting for the coming year by taking into account the inflation rate target as well as developments in economic and financial conditions.”

17. Between Article 58 and Article 59, 1 (one) new article is inserted to become Article 58A which reads as follows:

“Article 58A

(1) To assist the House of Representatives in carrying out its supervisory function in certain areas over Bank Indonesia, a Supervisory Board is established in an effort to improve the accountability, independence, transparency, and credibility of Bank Indonesia.

(2) The Supervisory Board consists of 5 (five) members consisting of a Chairperson concurrently serving as a member, and 4 (four) members elected by the House of Representatives and appointed by the President for a term of office of 3 (three) years and may be re-elected for one subsequent term of office.

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(3) The membership of the Supervisory Board is selected from persons who have integrity, morality, ability/capability/expertise, professionalism and experience in the fields of economics, finance, banking, or law.

(4) All costs of the Supervisory Board are charged to the operational budget of Bank Indonesia.

(5) The Supervisory Board is domiciled in Jakarta.

(6) The Supervisory Board submits a report on the implementation of its duties to the House of Representatives at least once in 3 (three) months or at any time when requested by the House of Representatives.

18. The provisions of Article 60 paragraph (2) and paragraph (3) are amended, and 1 (one) new paragraph is added, namely paragraph (4), so that the entirety of Article 60 reads as follows:

“Article 60

(1) The fiscal year of Bank Indonesia is the calendar year.

(2) At the latest 30 (thirty) days before the start of the fiscal year, the Board of Governors determines the annual budget of Bank Indonesia which includes the budget for operational activities and the budget for monetary policy, payment systems, as well as banking regulation and supervision.

(3) The operational activities budget as referred to in paragraph (2) and the evaluation of the implementation of the current year's budget are submitted to the House of Representatives, in this case the House of Representatives' instrument that oversees it, to obtain approval.

(4) The budget for monetary policy, payment systems, as well as banking regulation and supervision, shall be reported specifically to the House of Representatives.”

19. The provisions of Article 62 are amended, so that the entirety of Article 62 reads as follows:

“Article 62

(1) The surplus from the results of Bank Indonesia's activities shall be divided as follows:

a. 30% (thirty per hundred) for the Purpose Reserve;

• 11 b. the remainder is accumulated as General Reserve so that the amount of capital and General Reserve becomes 10% (ten per hundred) of all monetary liabilities as referred to in Article 6 paragraph (2).

(2) In the event of a risk in the implementation of the duties and authority of Bank Indonesia that results in Bank Indonesia's capital decreasing from Rp2.000.000.000.000,00 (two trillion rupiah), part or all of Bank Indonesia's current year surplus as referred to in paragraph (1) is allocated to the General Reserve to cover the said risk.

(3) In the event that after the efforts as referred to in paragraph (2) are carried out, the amount of Bank Indonesia's capital is still less than Rp2.000.000.000.000,00 (two trillion rupiah), the Government shall cover the shortfall which is carried out after obtaining approval from the House of Representatives.

(4) The remaining surplus after deducting the distribution as stipulated in paragraph (1) is handed over to the Government.”

20. The provisions of Article 77 are amended, so that the entirety of Article 77 reads as follows:

“Article 77 Within a period of at the latest 5 (five) years since the enactment of this Law, Bank Indonesia shall have divested all of its participation in legal entities or other bodies that do not comply with the provisions as stipulated in

Article 64 paragraph (1).”

21. Between Article 77 and Article 78 is inserted 1 (one) new article to become Article 77 A which reads as follows:

"Article 77A The provisions regarding currency as referred to in

Article 2, Article 19, Article 20, Article 21, Article 22, and Article 23 of this Law are declared to remain in force until further regulated by a separate law."

Article II

1. As long as the Law as referred to in Article 11 paragraph (5) has not been enacted, the regulation of matters as referred to in Article 11 paragraph (5) shall be set forth in a memorandum of agreement between the Government and Bank Indonesia.

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2. The memorandum of agreement as referred to in paragraph (1)

shall be signed by the Government and Bank Indonesia no later than the end of February 2004.

3. As long as the settlement of Bank Indonesia Liquidity Assistance has not ended, the Contingency Reserve shall be set at 10% (ten per hundred).

4. As long as there is no legislation regulating that Bank Indonesia's surplus is subject to income tax, then based on this Law Bank Indonesia's surplus is not subject to income tax.

Article III This Law shall come into force on the date of its promulgation.

In order that everyone may know it, it is ordered that the promulgation of this Law be carried out by placing it in the State Gazette of the Republic of Indonesia.

Enacted in Jakarta on 15 January 2004 PRESIDENT OF THE REPUBLIC OF INDONESIA,

signed MEGAWATI SOEKARNOPUTRI Promulgated in Jakarta on 15 January 2004 SECRETARY OF STATE OF THE REPUBLIC OF INDONESIA, signed BAMBANG KESOWO STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2004 NUMBER 7.

Copy in accordance with the original Deputy Secretary of the Cabinet for Legal and Legislative Affairs, Lambock V. Nahattands