OJK Publishes Regulatory Notifications Amid COVID-19 Pandemic
OJK issued a statement highlighting that the stability of the financial services sector has been good until April, even amid the COVID-19 pandemic. It also issued certain regulatory statements to address provisions related to restructured credit for debtors affected by the pandemic and on the timelines for submission of periodic reports, among others. This regulation has been effective from April 14, 2020. OJK published Financial Information Service System (SLIK) reporting guideline for restructured credit or financing due to COVID-19 impact, along with the related frequently asked questions (FAQs).
Economic data shows that COVID-19 pandemic has caused significant pressure on the global economy. Through a number of anticipatory policies (pre-emptive) and forward-looking assessments, which are reflected in financial, fiscal, and monetary sector stimulus, Indonesia is able to control volatility in the financial markets, which rose sharply in line with the increasing spread of COVID-19. The risk profile of financial service institutions in March 2020 was maintained at a controlled level with a gross non-performing loan (NPL) ratio of 2.77%. Meanwhile, banking liquidity and capital are at an adequate level. The liquid/non-core deposit ratio is monitored at 112.90%, above the 50% threshold. In addition, OJK continues to monitor the daily liquidity conditions of financial service institutions, including the availability of High Quality Liquidity Asset in the form of securities. Capital adequacy ratio of banks was recorded at 21.77% and risk-based capital of the life insurance and general insurance industries respectively 643% and 297%, above the regulatory threshold of 120%.
Credit relief from banks and finance companies for debtors affected by COVID-19, up to April 26, has been carried out by 65 banks. OJK also welcomed and supported the efforts of government in implementing a further economic stimulus policy related to the provision of interest subsidies for bank debtors and finance companies. OJK and the government will prepare provisions for the implementation of this further stimulus program. The following interest subsidies will be given for six months (April-September 2020):
- Interest rates for clusters below IDR 500 million are 6% for the first three months and 3% for the next three months
- Interest rates for clusters above IDR 500 million to IDR 10 billion are 3% for the first three months and 2% for the next 3 months
Related Links (in Indonesian)
- Press Release on Financial Sector Stability
- Press Release on Publication of Regulations in Response to COVID-19
- Press Release on Reporting Guidelines
- Regulation Related to Countercyclical Policies
- FAQs on Guidelines (PDF)
Keywords: Asia Pacific, Indonesia, Banking, COVID-19, Reporting, Restructured Loans, Regulatory Capital, Liquidity Risk, Credit Risk, NPL, OJK
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Karen Moss
Senior practitioner in asset and liability management (ALM) and liquidity risk who assists banking clients in advancing their treasury and balance sheet management objectives
Previous Article
MAS Announces Another Package of Relief Measures Amid COVID CrisisRelated Articles
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB Responds to EC Consultation on Crisis Management Framework
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
