Banking Sector Alert: New 40% Foreign Funding Cap and Implementation Timelines Now in Force

Bank Indonesia (“BI”) has issued Regulation of the Bank Indonesia Board of Governors No. 19 of 2026 on the Second Amendment (“Second Amendment”) to Regulation of the Bank Indonesia Board of Governors No. 7 of 2024 on the Implementing Regulation for the Bank Foreign Funding Ratio (“Regulation 7/2024”), as previously amended by Regulation of the Member of the Board of Governors No. 12 of 2025 (collectively referred to as “Regulation 19/2026”). The Second Amendment introduces several revisions to the existing regulatory framework, which are aimed at strengthening Indonesia’s macroprudential policy instruments in response to changing financial market conditions and global economic developments.[1]