Third Amendment to Commercial Bank Statutory Reserve Levels

Bank Indonesia (“BI”) has issued Regulation No. 18/3/PBI/2016 (“Amendment”) on the Third Amendment to BI Regulation No. 15/15/PBI/2013 (“2013 Regulation”)[1] on Rupiah and Foreign Currency Statutory Reserve Requirements for Conventional Commercial Banks.
 
The Amendment aims to loosen up monetary policy as a result of more stable macroeconomic conditions and to increase the financing capacities of banks so that they can better support economic activity across the country.[2]
 
Prior to the issuance of the Amendment, the 2013 Regulation had twice been previously amended, firstly by BI Regulation No. 17/11/PBI/2015 and secondly by BI Regulation No. 17/21/PBI/2015 (“2015 Regulation”).
 
In essence, the Amendment changes several provisions originally set out under the 2013 Regulation which relate to the minimum statutory reserve requirement in rupiah for banks, dispensations for satisfying the minimum statutory reserve requirement inrupiah, as well as statutory rupiah giro services.
 
The Amendment is of relevance to conventional commercial banks, as well as to branch offices of foreign banks.
 
Minimum Rupiah Statutory Reserve Requirement
The minimum statutory reserve requirement (Giro Wajib Minimum – “GWM”) is determined based on the amounts of funds received by banks from their customers, which refers as Third Party Funds (Dana Pihak Ketiga – “DPK”).
The Amendment states that the GWM in the rupiah currency is to be determined as follows:[3]