OJK Determines Provisions for the Assessment of the Asset Qualities of Commercial Banks

In order to improve the soundness levels of commercial banks through the protection of asset quality, as well as allowances for asset quality valuations,[1] the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has issued Regulation No. 40/POJK.03/2019 on the Assessment of the Asset Qualities of Commercial Banks (“Regulation 40/2019”).

The new Regulation 40/2019 replaces and repeals the following legal frameworks which also addressed assessments of the asset qualities of commercial banks:[2]