BANKING

INDUSTRY
DEFINITION
Art. 1, point 2, Law No 11 of 1998 Regarding Bank

"Bank is a business entity that collects funds from the

public in the form of savings and distributes them to the
public in the form of credit and or other forms in order to
improve the standard of living of many people"
Presentation title 3

CLASSIFICATION OF
BANK
In general, Indonesia recognizes 2 (two) types of banks:

1. Commercial Bank
a bank that conducts business activities conventionally or based on sharia principles which
in its activities provides services in payment traffic, and can perform demand deposits.

2. Rural Banks (BPR/BPRS)

a bank which in its activities does not provide services in payment traffic, and cannot
perform demand deposits. In addition to providing loans, BPR and BPRS also accept
savings and time deposits services.
LEGAL FORM
Commercial Bank
a. Limited company;
b. Cooperative; or
c. Regional Company.

Rural Bank
a. Regional Company;
b. Cooperative;
c. Limited company; or Other forms stipulated by Government Regulation.
Representative offices and bank branch offices domiciled abroad follows the
legal form of the head office.
BANK CORE 5

CAPITAL
core capital/ bank capital consisting of paid-in capital, donated capital, reserves formed from profit after tax,
and profits earned after calculating taxes, after deducting goodwill in the bank's books and the lack of
penyisihanpenghapusanaktivaproduktif/ allowance for earning assets write-off (PPAP) and the amount that
should be established in accordance with Bank Indonesia regulations.

TERMS IN BANK CORE CAPITAL

1. Paid up Capital = the company in general

2. Donated Capital = capital recovered from share donations, including the difference between the recorded
value of the selling price if the shares were sold; Capital originating from donations from outside
parties received by banks in the legal form of cooperatives is also included in the definition of donated
capital.
3. Reserves = funds set aside and profit after tax to cover/fulfill future payments
4. Goodwill = the value of intangible assets, in the form of the ability to earn profits, such as good relations,
favorable location; this value is included in setting the price of a company, which can only be taken
into account when the company is sold.
5. PPAP = reserves formed by encumbering the current year's profit and loss account, to accommodate losses
that may arise as a result of the non-receipt of part or all of the earning assets
6.
 BUKU
BUKU 1: Banks in this toBank umum dalam kategori ini memiliki modal terendah dalam tingkatan kepemilikan modal, Tier 1 (di
bawah Rp 1 triliun) hanya diperbolehkan melakukan kegiatan perbankan umum dalam Rupiah dan bertindak sebagai penukar uang.

BUKU 2: Sementara, Bank dalam kategori BUKU 2 berwenang untuk melakukan kegiatan perbankan Rupiah dan valuta asing dengan
cakupan yang lebih luas, (kepemilikan modal inti Tier 1, antara Rp 1 trilliun – Rp 5 Trilliun) penyertaan modalnya hanya terbatas pada
lembaga keuangan Indonesia, meliputi:
(a) kegiatan keagenan dan kerjasama,
(b) sistem pembayaran dan perbankan elektronik,
(c) penyertaan modal pada lembaga non keuangan untuk penyelamatan kredit,
(d) dan penyertaan modal pada lembaga keuangan lainnya.

BUKU 3: (kepemilikan modal inti Tier 1, antara Rp 5 trilliun – Rp 30 Trilliun) diperbolehkan untuk berpartisipasi dalam lembaga
keuangan di Asia;

BUKU 4: (kepemilikan modal inti Tier 1, mulai dari Rp 30 Trilliun) partisipasi terbuka untuk lembaga keuangan di seluruh dunia.
Bank Umum pada umumnya dilarang melakukan kegiatan sebagai berikut: - penyertaan modal pada lembaga nonkeuangan (dengan
pengecualian sementara tertentu, misalnya dalam hal pemulihan kegagalan kredit lembaga nonkeuangan); - bisnis asuransi; dan - hal-
hal di luar yang ditentukan oleh undang-undang.
REQUIREMENTS FOR 7

BANK
ESTABLISHMENT
1. Paid up Capital
Minimum Rp. 1.000.000.000.000,- and can be changed according to OJK’s regulation

2. Ownership
• Indonesian Nationality and Indonesian Legal Entity;
• Indonesian Nationality and Indonesian Legal Entity in affiliate with Foreign Company or
Foreign Nationality, with maximum composition in amount of 99% from the total of paid up
capital
•
3. Licensing/Permit
• Principal Permit > Submitted by one of the controller shareholder to OJK
• Business License > OSS
•
BANK SUPERVISION 8

Previously, supervision and regulation of the Indonesian banking industry was carried out by
Bank Indonesia. However, after the enactment of Law Number 21 of 2011 concerning the
OJK (OJK Law), the supervisory and regulatory authority of the Indonesian banking industry
(in addition to monetary policy) was transferred to the OJK.

Based on the OJK Law, OJK is responsible for regulating and supervising banks and banking
institutions, as well as aspects of solvency (ability to pay off debts) and bank prudence,
except for the monetary function of maintaining rupiah currency stability and the
implementation of monetary policy that is still attached to BI.
Presentation title 9

BANK SETTLEMENT
In the event that a bank experiences difficulties that endanger its business continuity, Bank Indonesia may
take action as follows:
a. shareholders increase capital;
b. shareholders replace the Board of Commissioners and or the Board of Directors of the bank;
c. the bank writes off credit or financing based on the Sharia Principles that is non-performing and takes
into account the bank's losses with its capital;
d. the bank merges or consolidates with other banks;
e. the bank is sold to a buyer who is willing to take over all obligations;
f. the bank delegates the management of all or part of the bank's activities to other parties;
g. the bank is sold part or all of the assets and or liabilities of the bank to the bank or other party
 10

“ THANK YOU
”