The government is intent on ensuring that the financial crisis that is afflicting most of the world’s economies has little or no long term impacts in Indonesia. To this end the government has issued a raft of interim laws and regulations with a view to avoiding the crisis (see ILB No. 945 17/10/2008). Interim Law No. 4 of 2008 provides the basis for the issue of this Minister of Finance Regulation. Regulation No. 172/PMK.01/2008 provides part of the regulatory framework with regards to the procedures that are to be followed for the issue of a government guarantee of any Emergency Fund Facilities (Fasilitas Pembiayaan Darurat / FPD).
Article 11 of Interim Law No. 4 of 2008 stipulates that an FPD can only be granted by Bank Indonesia (BI) after a decision in favor of the grant has been made by the Financial System Stability Committee (Komite Stabilitas Sistem Keuangan / KSSK). Article 15 of the same Interim Law states that the written guarantee is to be in the name of the government and is to be issued by the Minister of Finance.
The written guarantee covers two potential scenarios:
-Banks do not repay the FPD in the proscribed time, and
-The bank fails.
The Head of the Fiscal Policy Board will provide the guarantee concept after considering the notification from the Secretary of the KSSK. All the documents that are required for the purposes of the written guarantee are listed in an attachment to the Regulation.
The purpose of the guarantee is to provide for the government to repay any outstanding FPD back to BI in the event either of the two possibilities noted above are realized. The manner of repayment is to be regulated in a separate MoF Regulation. Nevertheless, before any repayments can be made by the government to BI, BI most submit a statement of account for the outstanding monies.
The Regulation has been in force since 18 November 2008.
The government is intent on ensuring that the financial crisis that is afflicting most of the world’s economies has little or no long term impacts in Indonesia. To this end the government has issued a raft of interim laws and regulations with a view to avoiding the crisis (see ILB No. 945 17/10/2008). Interim Law No. 4 of 2008 provides the basis for the issue of this Minister of Finance Regulation. Regulation No. 172/PMK.01/2008 provides part of the regulatory framework with regards to the procedures that are to be followed for the issue of a government guarantee of any Emergency Fund Facilities (Fasilitas Pembiayaan Darurat / FPD).
Article 11 of Interim Law No. 4 of 2008 stipulates that an FPD can only be granted by Bank Indonesia (BI) after a decision in favor of the grant has been made by the Financial System Stability Committee (Komite Stabilitas Sistem Keuangan / KSSK). Article 15 of the same Interim Law states that the written guarantee is to be in the name of the government and is to be issued by the Minister of Finance.
The written guarantee covers two potential scenarios:
-Banks do not repay the FPD in the proscribed time, and
-The bank fails.
The Head of the Fiscal Policy Board will provide the guarantee concept after considering the notification from the Secretary of the KSSK. All the documents that are required for the purposes of the written guarantee are listed in an attachment to the Regulation.
The purpose of the guarantee is to provide for the government to repay any outstanding FPD back to BI in the event either of the two possibilities noted above are realized. The manner of repayment is to be regulated in a separate MoF Regulation. Nevertheless, before any repayments can be made by the government to BI, BI most submit a statement of account for the outstanding monies.
The Regulation has been in force since 18 November 2008.
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