BPR Capital Revamped: Tighter Deductions and Strict Six-Month Recovery Timeline Introduced for Minimum Core Capital Shortfalls

The Board of Commissioners of the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has issued Regulation No. 7 of 2026 (“Regulation 7/2026”) on Minimum Capital Adequacy Requirements and the Fulfillment of Minimum Core Capital for Rural Banks (Bank Perekonomian Rakyat – “BPR”). This new framework has resulted in the revocation of Regulation of the OJK No. 5/POJK.03/2015 (“Regulation 5/2015”). Regulation 7/2026 now mandates that all BPR should strictly maintain a minimum core capital level of Rp. 6 billion and a capital adequacy ratio of at least 12%. Accordingly, BPR should now recalibrate their equity structures to account for new capital deduction factors, including deferred taxes and impairment loss shortfalls.