Provisions on Offshore Bank Loans Amended

In an effort to stabilize Indonesia’s macro-economy,[1] Bank Indonesia (“BI”) has issued Regulation No. 15/6/PBI/2013 (“Third Amendment”) as the third amendment to BI Regulation No. 7/1/PBI/2005 on Offshore Bank Loans (“BI Regulation”).

The BI Regulation aims to regulate the offshore short[2] and long term loans[3] of commercial banks. The Third Amendment specifically changes the regulatory provisions covering the requirements for banks to be excluded from borrowing limitations under Article 3A of the BI Regulation which states states: The daily balance limit of short term offshore loans must not exceed 30 percent of a banks’ capital.