Bank Indonesia Issues Regulation on Bilyet Giro

Indonesian Version

 
Aditiya Putra, Fathan Qorib
 

 

At the end of last month, Bank Indonesia (BI) Governor, Agus DW Martowardojo signed off on BI Regulation No. 18/41/PBI 2016 on Bilyet Giro (Regulation 18/2016). Expected to come into force by 1 April 2017, this regulation will repeal and replace Director’s Decision No. 28/32/SK/KEP/Dir dated 4 July 1995, which addressed the same matters.
 
As described on the official BI website (bi.go.id), Regulation 18/2016 is aiming to boost protection for the users ofbilyet giro (a type of clearing account), as well as to increase the integrity of bilyet giro use by militating against the risk of misuse, and also to ensure the security of bilyet giro. With this goal in mind, there are a number of important points that the regulation addresses that should be of concern to any  individuals and entities which are engaged in any activities which relate to bilyet giro.
 
To begin with, the new regulation emphasizes the fact that the bilyet giro is classified as a script-based, non-cash payment instrument which uses a transfer mechanism as opposed to commercial papers. The regulation then goes on to set out the characteristics of a bilyet giro, specifically the fact that a bilyet giro is a transfer instrument, is non-transferable, uses the Rupiah currency and also uses the Indonesian language.
 
The new regulation also sets out a number of more formal requirements which must be satisfied when using a bilyet giro. One of these is the requirement that issuers and issuing banks set clear effective dates, as well as clarify other formal information whenever a bilyet giro is issued. Such information must now include, among other items, the name of the issuer and issuing bank, the relevant bilyet giro number, the transfer order, the recipient’s name and account number, the amount of funds being transferred, the withdrawal date and the recipient’s signature.
 
In terms of timeframes, the new regulation shortens the bilyet giro validity period from 70 days from the date of withdrawal plus another six months, to only 70 days from the date of withdrawal. In addition, Regulation 18/2016 now allows issuing banks to delay the payment process by one business day if a bilyet giro is suspected of being counterfeit or of having been subject to manipulations.
 
Moreover, in order to ensure the security and certainty of bilyet giro activities, the regulation then goes on to set out a number of security standards and specifications for bilyet giro whichhave been stipulated by BI. In this context, Regulation 18/2016 clarifies the obligations of related parties as regards any utilization of bilyet giro, specifically the obligations of issuers, issuing banks, recipients and receiving banks.
 
Another important point to note as regards this regulation is the ability of banks to reject any bilyet giro if it is suspected that the information contained therein has been filled out by a different party from the entitled issuer. In this regard, Regulation 18/2016 then allows any issuing bank to reject a bilyet giro if there are any differences between the total transferred amounts as they are written in both numbers and words. Should the issuing bank still opt to proceed with a given transfer, then the issuing bank is then required to use the total amount as written in words. However, if there is any repetition in the total amount as written in both numbers and words, yet there is a margin between the repeated amounts, then the issuing bank must then use the smallest total amount as stated in the bilyet giro.

(cd/sp)