This updated Regulation introduces a number of significant changes to the existing framework for this area by incorporating the new BI Services Application (Aplikasi Layanan BI "ALB") alongside the existing BI Licensing Application (Aplikasi Perizinan BI "APBI"). This initiative has been introduced in an effort to modernize the licensing process, providing more flexibility through the availability of both digital (paperless) and physical submission options during the transition. Meanwhile, the creation of ALBI reflects ongoing BI innovations and is expected to simplify license applications and processing.

In order to further strengthen the transparency of conventional banks ("Bank") credit rates, the OJK now requires Banks to submit two types of Prime Lending Rate (Suku Bunga Dasar Kredit "SBDK") reports, specifically SBDK Publication Reports and SBDK Detailed Reports.

Under certain conditions, Banks will now be required to submit periodic resolution plans every two years commencing 30 November 2024. This obligation will apply to Banks that experience any significant changes in their financial conditions that may impact their assets, liabilities and/or equities. Any failure to comply with these resolution plans obligations will result in the imposition of administrative sanctions.

A new OJK Draft Regulation will allow conventional and sharia rural banks (bank perekonomian rakyat "BPR") to engage in capital investment activities. In order to do so, BPR must first secure approvals from the Financial Services Authority (Otoritas Jasa Keuangan "OJK") and fulfill the following requirements: 1) Must meet the minimum capital adequacy ratio; 2) Must have a minimum soundness level ranking of Composite 2 based on the last two consecutive annual period assessments; and 3) Any capital investments that are made must not disrupt the continuity of BPR businesses and must not significantly increase the relevant BPR risk profiles.

Conventional and sharia commercial banks ("Banks") are required to meet the daily offshore bank funding ratio (Rasio Pendanaan Luar Negeri Bank "RPLN"). The threshold for the RPLN has been set at a maximum of 30% based on the relevant percentage that serves as the addition or reduction factor for determinations of the RPLN threshold ("Countercyclical Parameter"). In this regard, the Countercyclical Parameter will be determined by taking several factors into account (e.g. financial cycles, external factors and/or financial system stability risks) and aspects of said determinations (e.g. applicable amount, effective date, termination date and so forth).

The Draft Regulation has now expanded the conditions that may lead to disclosures of Banks confidential information, which include the following: 1) Based on requests that are submitted by curators in relation to court verdicts on bankruptcy or liquidators for the settlement of assets; 2) In order to fulfill mutual legal assistance requirements relating to criminal matters; and 3) In order to implement inter-state authority cooperation agreements that have been signed on a reciprocal basis

Membership candidates for the Sharia Supervisory Boards (Dewan Pengawas Syariah "DPS") of Sharia Commercial Banks (Bank Umum Syariah "BUS") and Sharia Business Units (Unit Usaha Syariah "UUS") (collectively referred to as "Banks") must secure approvals from the Financial Services Authority (Otoritas Jasa Keuangan "OJK") through fit-and-proper tests that evaluate the following factors: 1) Integrity; 2) Competency; and 3) Good reputation. Once formally appointed, DPS members are required to fulfill several duties that have been broadly classified into the following categories: 1) Supervision; 2) Advisory Roles; 3) Reporting; 4) Opinions on Product Innovation; 5) Consultations; and 6) Additional Duties

As payments of initial premiums for the Bank Restructuring Program ("Premiums") are set to commence, the Deposit Insurance Corporation (Lembaga Penjamin Simpanan/LPS) recently issued a new Regulation that stipulates that conventional and sharia commercial banks (collectively referred to as "Banks") are required to adjust their Premium payment amounts when making Premiums payments for the following period if any of the following conditions occur: 1) Lack of Premium payments; 2) Excess Premium payments; 3) Banks carry out mergers before the Premium payment deadline; and 4) Banks carry out spin-offs to establish sharia business units. Said Premium payments should be deposited into an account determined by the LPS, while initial Premium payments should be completed for the 1 January - 30 June 2025 period

Previously, the applicable criteria that had to be met by conventional commercial banks (Bank Umum Konvensional/BUK), sharia commercial banks (Bank Umum Syariah/BUS) and sharia business units (Unit Usaha Syariah/UUS) in order to become monetary market primary dealers comprised three main aspects (i.e. contribution, capability, as well as collaboration and reputation). These criteria have now been revised as follows: 1) General criteria (i.e. size, interconnectivity and complexity); and 2) Special criteria (i.e. transactions, interconnectivity, competency, risk management and infrastructure).

All banks are now required to prepare and submit recovery plans to the OJK, whereas previously only systemic banks were mandated to prepare and submit such plans. The new Regulation introduces various new deadlines for the submission of recovery plans, which lie between November 2024 and December 2027, depending on the type of banks concerned