Respite for BPR: 12% ATMR Capital Requirement and Sanctions for Core Capital Shortfalls Removed

In 2016, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) introduced Circular No. 8/SEOJK.03/2016 on the Mandatory Minimum Capital Requirement and Fulfilment of Minimum Core Capital for Rural Banks, which was subsequently amended by Circular No. 24/SEOJK.03/2019 (collectively referred to as “Circular 8/2016”). As its title suggests, Circular 8/2016 addressed a wide array of areas that specifically related to the fulfillment of the minimum capital requirement by rural banks, which was measured based on risk-weighted assets (Aset Tertimbang Menurut Risiko – “ATMR”), including available capital schemes, asset calculations and reporting mechanisms.