BI Finally Issues a Multiple Licensing Policy

Bank Indonesia (“BI”) has issued Regulation No. 14/26/PBI/2012 on Business Activities and Branch Offices Based on Banks’ Core Capital (“Regulation”). The Regulation aims to improve national banks’ competitiveness and efficiency by categorizing banks based on their core capital, which determines banks’ activities and requirements for establishing new branch offices. This policy is known as “Multiple Licensing Policy”.

The Regulation mainly concerns commercial banks (Law No. 7 of 1992 on Banking, as amended by Law No. 10 of 1998), foreign banks’ branch offices (Bank Indonesia Circular Letter No. 32/5/UPPB of 1999), and sharia banks (Law No. 21 of 2008 on Sharia Banking).