New Obligation Alert: Payment Systems Operators Required to Submit Funding Provision Plans by December 2024

In 2019, Bank Indonesia (“BI”) issued Regulation No. 21/16/PBI/2019 (“Regulation 16/2019”) on the Standardization of Competencies Within the Field of Payment Systems (Standardisasi Kompetensi di Bidang Sistem Pembayaran – “SK SP”) and the Management of Rupiah. At its core, Regulation 16/2019 established various requirements and guidelines for banks (“Banks”) and non-banking institutions (lembaga selain bank – “LSB”) (Banks and LSB collectively referred to as “SK SP Operators”) that were aimed at enhancing competencies within the payment systems and rupiah management sector.[1]

However, recent challenges such as fraud, cybercrime, money laundering and terrorism financing, along with the need to align this framework with the mandate set out under Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector, (“Law 4/2023”) has prompted BI to issue Regulation No. 5 of 2024 (“Regulation 5/2024”) on SK SP.[2] Upon entering into force on 9 July 2024, the aforementioned new framework simultaneously repealed and replaced Regulation 16/2019.[3]

While maintaining most of the core provisions that were originally set out under Regulation 16/2019, Regulation 5/2024 notably makes several revisions, such as to the scope of payment system activities (“Activities”), the various qualification levels required for certain positions, the obligations of related parties, as well as new types of administrative sanctions that may be enforced for non-compliance. Moreover, Regulation 5/2024 has also simplified the terminology used, by omitting the management of rupiah (pengelolaan uang rupiah/PUR......