The new Regulation significantly strengthens Bank Indonesia's consumer protection framework by imposing stricter market conduct obligations on organizers of financial services (?Organizers?). The new framework requires the establishment of dedicated consumer protection units, mandatory self-assessments, enhanced governance of standard agreements and a more rigorous framework for cross-border data transfers. This will require Organizers to strengthen their compliance, governance and data protection practices during the six-month transition period.

This Regulation has now revised the framework on Letter-of-Credit (?L/C?) transactions that take place at Bank Indonesia (?BI?) through the introduction of sharia-based L/C issuance, the classification of Sight L/C as non-transferable and the strengthening of operational requirements. The new Regulation also reinforces the use of the BI Service Application (Aplikasi Layanan Bank Indonesia/ALBI), expands documentary requirements, clarifies fee adjustment mechanisms and provides greater certainty for L/C invoice payments that are financed through loans, grants and domestically sourced rupiah.

Bank Indonesia has issued a strategic adjustment to its macroprudential framework by increasing the Bank Foreign Funding Ratio (Rasio Pendanaan Luar Negeri Bank/RPLN) cap to 40%. This adjustment, which is being supported by a newly established positive 10% countercyclical parameter, has been introduced in order to bolster short-term foreign funding liquidity and stimulate productive credit growth.

This Second Amendment expands the corporate and sharia corporate securities that are classified as eligible for the Macroprudential Intermediation Ratio (Rasio Intermediasi Makroprudensial - ?RIM?) and Sharia RIM, including privately placed instruments. The new framework also excludes interbank repo transactions from RIM calculations for both counterparties and introduces a phased transition to Integrated Commercial Bank Reports (Laporan Bank Umum Terintegrasi/LBUT), which will ultimately replace manual reporting with automated data submissions.

This new Regulation has now overhauled the capital adequacy framework for BPR, maintaining the 12% minimum capital adequacy ratio and the Rp. 6 billion core capital requirements, while also tightening the applicable capital component calculations. The new framework also introduces stricter administrative timelines for capital deposits, limits profit distributions for undercapitalized banks and sets various asset injection rules, thereby fundamentally altering the management of solvency and equity by rural banks.

The Draft Regulation addresses comprehensive country and transfer risk management frameworks for commercial banks that engage in cross-border activities. Banks are now required to conduct semi-annual self-assessments in order to calculate their country risk and transfer risk (CTR) ratios, which will subsequently determine their categorization into one of three distinct compliance tiers. Depending on this tier, Banks face tiered obligations that will range from general risk management to rigorous quantitative reporting and mandatory provisioning adjustments.

The Draft Regulation is set to expand the allowable underlying assets for structured products so that they include commodities and equities, boost market attractiveness and effect further financial deepening. Commercial banks must comply with updated customer classifications, shortened cooling-off periods and stringent transparency requirements, while gaining the flexibility to utilize electronic signatures and agreements.

This Amendment marks a significant recalibration of Indonesia?s financial sector architecture through the expansion of parliamentary oversight over core financial authorities, the embedding of restorative justice into financial sector enforcement, and the broadening of the OJK?s reach to new markets and state-linked financing structures. Taken together, these reforms herald a more interventionist and institutionally integrated regulatory model, while leaving important questions regarding implementation, coordination, and regulatory independence to be addressed by follow-up rules.

This new Regulation establishes a dedicated procedural framework for resolving disputes that involve banks that are currently undergoing liquidation and post-liquidation proceedings, as well as deposit-insurance disputes that are heard before the Commercial Court. This new framework mandates the completion of electronic case registrations through the Court Information System (Sistem Informasi Pengadilan/SIP), strict examination timelines, virtual hearings, the authentication of in-person evidence and an expedited single-judge mechanism for claims that are valued at up to Rp. 1 billion.

This new Regulation ensures the strict separation of Sharia banking investment products (?Investment Products?) from standard deposit products. In this regard, Investment Products are defined as restricted-risk products that are linked directly to underlying assets. In order to comply with the new categories, all Sharia Banks should immediately overhaul their fund management, risk calculation and internal accounting systems, while existing Investment Products will now face a mandatory two-year transition period.