Prudentiality Principles Mandated for Commercial Banks in Government Bid to Stimulate Economic Growth

The Financial Services Authority (“OJK”) has issued OJK Regulation No. 11/POJK.03/2015 on Commercial Bank Prudentiality Principles for Stimulating National Economic Growth (“2015 Regulation”).

The 2015 Regulation mandates that commercial banks implement prudentiality principles as part of a government effort to stimulate national economic growth. The prudentiality principles laid out in the 2015 Regulation apply to the following areas: credit-risk calculations for risk-weighted assets (Aset Tertimbang Menurut Resiko – “ATMR”) using a standardized approach, asset-quality assessment, and capital investment by commercial banks.[1]