Featured Product

    OJK Publishes Regulatory Policy Package for Banks Amid COVID-19 Crisis

    May 29, 2020

    OJK published a policy package that sets out relaxations to certain regulatory capital and liquidity risk framework provisions in the banking sector to help maintain financial sector stability amid COVID-19 pandemic. The policy package for commercial banks includes relaxation measures related to reporting, credit treatment, and governance of restructured credit or financing in accordance with the Circular POJK No.11/POJK.03/2020. The package also addresses adjustment of implementation of several banking regulations and postponement of implementation of Basel III reforms. Moreover, OJK relaxed policy measures for rural credit banks and "Islamic People's Financing Banks." It published a circular on amendments to the minimum capital requirements and fulfillment of minimum core capital for Sharia rural banks. The amendments have been in effect from May 20, 2020. Additionally, OJK issued a statement highlighting that the stability of the financial services sector has been maintained until May, even amid the COVID-19 pandemic.

    The relaxation policy package for conventional commercial banks and Sharia commercial banks includes the following measures:

    • According to the  POJK No.11/POJK.03/2020, restructured credit or financing are reported in the Financial Information Services System (SLIK).
    • The obligation to fulfill the Capital Conservation Buffer in the capital component of 2.5% of the Risk Weighted Assets for banks (BUKU 3 and BUKU 4) is temporarily removed until March 31, 2021.
    • Obligations to fulfill Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) for banks (BUKU 3, BUKU 4, and Foreign Banks) must be maintained as low as 85% by March 31, 2021. Banks are required to prepare action plans to return the fulfillment of LCR and NSFR to 100% no later than April 30, 2021.
    • Assessment of Foreclosed Collateral Quality based on the term of ownership can be paused until March 31, 2021. 
    • In line with the announcement by BCBS on March 27, 2020, the implementation of the Basel III reforms standard in Indonesia—which includes the calculation of risk-weighted assets for operational, credit, market, and credit valuation adjustment (CVA) risks—has been postponed to January 01, 2023.


    Related Links (in Indonesian)

    Effective Date: May 20, 2020

    Keywords: Asia Pacific, Indonesia, Banking, COVID-19, Reporting, Restructured Loans, Regulatory Capital, Liquidity Risk, Credit Risk, LCR, NSFR, Deadline Extension, Basel, Operational Risk, Market Risk, Risk-Weighted Assets, CVA Risk, OJK

    Featured Experts
    Related Articles

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8952