Bank Indonesia recently issued Regulation No. 18/15/PBI/2016 on the Organization of Rupiah Currency Processing Services (?2016 Regulation?), which sets out guidelines for the processing of the rupiah currency across the country by private security companies which have been acknowledged as rupiah-currency processing-service organizers (penyelenggara jasa pengolahan uang rupiah ? ?PJPUR?). These guidelines cover a broad range of provisions, and so this edition of Indonesian Legal Brief (ILB) will limit its discussions to the following matters: 1) Rupiah-currency processing services; 2) Licensing procedures; 3) Cooperation agreements; and 4) Mandatory PJUPR obligations.

Bank Indonesia has introduced a new standard for monetary operations through BI Regulation No. 18/12/PBI/2016 on Monetary Operations. The new monetary operations standard uses the PUAB O/N Interest Rate and BI?s seven-day reverse repo interest rates as the basis upon which monetary stability objectives are to be determined.

In order to increase the use of electronic money and achieve greater national financial inclusivity, Bank Indonesia has relaxed the requirements for banks which are looking to offer digital financial services to their customers by issuing Regulation No. 18/17/PBI/2016, which amends BI Regulation No. 16/8/PBI/2014 on Electronic Money.

In order to realize market discipline in accordance with recent developments in international standards, the OJK has issued Regulation No. 32 /POJK.03/2016, which amends OJK Regulation No. 6/POJK.03/2015 on Transparency and the Publication of Bank Reports. This Amendment mainly focuses on revising provisions which relate to contents, publishing mechanisms and submission for Banks? monthly, quarterly, annual and miscellaneous reports, as well as setting out additional sanctions for non-compliance.

In order to implement the various provisions set out under the recent OJK Regulation on Business Activities and Branch Offices Based on Core Bank Capital, the OJK has issued Circular Letter No. 27/SEOJK.03/2016, which sets out in further detail the scope of the business activities which can be engaged in by commercial banks based on their core-capital levels, as well as procedures for the issuance of any new products/services and for the handling of any decrease in core-capital levels. Subsequent to the issuance of the OJK Law, these matters now fall under the authority of the OJK instead of Bank Indonesia.

Through BI Regulation No. 18/10/PBI/2016 (2016 Regulation), BI intends to improve transparency and information availability for foreign exchange and customer traffic (LLD) activities, an area which was previously regulated under BI Regulation No. 13/21/PBI/2011. Under the new 2016 Regulation, customers are required to provide additional supporting documents in accordance with the amount of any transaction that they undertake. This is a new requirement which was previously not regulated

With the ultimate goal in mind of enhancing sharia-hedging transactions in Indonesia, Bank Indonesia (?BI?) has issued Circular Letter No. 18/11/DEKS on Sharia-Hedging Transactions.

The OJK Circular Letter sets out detailed procedures and requirements for commercial banks (?Banks?) which are looking to establish new office networks in Indonesia or overseas according to their core-capital levels, categories and the banking zoning system designed by the OJK.

The 2016 Regulation updates provisions relating to commercial-bank obligations to maintain certain levels of funds which relate to their risk profiles, and also states that the OJK is to replace Bank Indonesia (BI) as the regulatory and monitoring body for financial institutions.

The Amendment aims to loosen up monetary policy as a result of more stable macroeconomic conditions and to increase the financing capacities of banks so that they can better support economic activity across the country.