Deposits Exceeding LPS Insurance Limit Should Now Be Settled Through Bank Liquidation Mechanism

In an effort to improve the effective implementation of deposit insurance for bank customers (“Insurance”) following the issuance of Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“Law 4/2023”),[1] the Deposit Insurance Corporation (Lembaga Penjamin Simpanan – “LPS”) has issued Regulation No. 1 of 2023 on the Deposit Insurance Program (“Regulation 1/2023”), which has been in force since 25 May 2023.[2] Upon entering into force, Regulation 1/2023 simultaneously repealed and replaced Regulation of the LPS No. 2/PLPS/2010 on the Deposit Insurance Program, as amended several times, most recently through Regulation of the LPS No. 2 of 2020 (collectively referred to as “Regulation 2/2010”).[3]