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FINANCIAL SERVICES AUTHORITY

REPUBLIC OF INDONESIA

COPY

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 55/POJK.03/2016
ABOUT
GOVERNANCE IMPLEMENTATION FOR COMMERCIAL BANKS

BY THE GRACE OF GOD ALMIGHTY

THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering: a. whereas with the increasingly complex risks faced by banks, the need for good
governance practices by banks also increases;

b. that in order to improve bank performance,

protect the interests of stakeholders,
and improve regulatory compliance
applicable laws and ethical values
common in the banking industry, implementation is required
good governance;
c. that improving the quality of governance implementation is one of the
efforts to strengthen conditions
national banking internal;
d. that in the implementation of bank governance there is
dynamics that need to be responded to in a proportional manner
in order to optimize the implementation of bank governance;
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e. that based on the considerations referred to in letters a through d it is

necessary
stipulates the Financial Services Authority Regulation concerning
Governance Implementation for Commercial Banks;

In view of: 1. Law Number 7 of 1992 concerning

Banking (State Gazette of the Republic of Indonesia Year
1992 Number 31, Supplement to the State Gazette of the Republic
Indonesia Number 3472) as amended by Law Number 10 of 1998
concerning
Banking (State Gazette of the Republic of Indonesia Year
1998 Number 182, Supplement to the State Gazette of the Republic
Indonesia Number 3790);
2. Law Number 21 of 2011 concerning Authority
Financial Services (State Gazette of the Republic of Indonesia
Year 2011 Number 111, Supplement to the State Gazette
Republic of Indonesia Number 5253);

DECIDE:

To stipulate: REGULATION OF THE FINANCIAL SERVICES AUTHORITY CONCERNING

GOVERNANCE IMPLEMENTATION FOR COMMERCIAL BANKS.

PIG
GENERAL REQUIREMENTS

article 1
In this Financial Services Authority Regulation what is meant
with:
1. Bank is a commercial bank as referred to in
Law Number 7 of 1992 concerning
Banking as amended by Law
Law Number 10 of 1998 concerning Banking, including branch offices
of banks domiciled in
abroad, who carry out business activities on an international basis
conventional.
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2. Directors:

a. for a Bank legally incorporated as a Limited Liability Company, it

is the directors as referred to
in Law Number 40 of 2007
regarding Limited Liability Companies;

b. for a Bank in the form of a legal entity:

1) Regional Public Company or Company
Regional Company is the directors as
referred to in Law Number 23
2014 concerning Regional Government as amended
several times
finally with Law No. 9
2015 concerning Regional Government;
2) Regional Company is the directors of the Bank
which has not changed shape
Regional Public Company or Company

Regional Company as referred to in Law Number 23 of

2014 concerning Regional Government as referred to in

has been modified several times last with

Law Number 9 of 2015 concerning
Local government;
c. for a Bank legally incorporated as a Cooperative, it is
management as referred to in the Act
Law Number 25 of 1992 concerning
Cooperative;
d. for a Bank with the status of a branch office of
a bank domiciled abroad is
branch office leaders and first-level officials in
under the head of the branch office.
3. Board of Commissioners:

a. for a Bank in the form of a Company legal entity

Limited is the board of commissioners as referred to in Law
Number 40
2007 concerning Limited Liability Companies;

b. for a Bank in the form of a legal entity:

1) Regional Public Company is a board
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supervisor as referred to in
Law Number 23 of 2014 concerning
Regional Government as amended several times, most
recently by Law
Law Number 9 of 2015 concerning
Local government;
2) Regional Public Company is a commissioner as referred to
in the Law
Number 23 of 2014 concerning Government
Region as amended several times, most recently by Law
Number 9
2015 concerning Regional Government;
3) Regional Company is the supervisor on
Banks that have not changed shape to
Regional Public Company or Company

Regional Company as referred to in Law Number 23 of

2014 concerning Regional Government as amended
several times, most recently by

Law Number 9 of 2015 concerning

Local government;
c. for a Bank legally incorporated as a Cooperative, it is
supervisor as referred to in the Law
Law Number 25 of 1992 concerning
Cooperative;
d. in the case of a Bank with the status of a branch office of a bank
domiciled abroad, it is the party appointed to carry out the
function
supervision.

4. Independent Commissioners are members of the Board of

Commissioners who do not have financial, management, share
ownership and/or family relationships with members of the Board of
Directors, other members of the Board of Commissioners and/or
controlling shareholders, or relationships with the Bank that may
affect the ability of the person concerned to act independent.

5. Non Independent Commissioner is a member of the Board of

Commissioners who is not an Independent Commissioner.
6. Independent Party is a party outside the Bank that is not
have a financial relationship management,
share ownership and/or family relationship with
members of the Board of Directors, members of the Board of Commissioners and/or
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controlling shareholder, or relationship with

Banks that can affect the ability of the concerned to act
independently.
7. Good governance is a management procedure
Banks that apply the principles of openness
(transparencies), accountability (accountability),
accountability (responsibility), independence
(independence), and fairness (fairness).
8. Stakeholders are all parties who have an interest directly or indirectly

directly to the Bank's business activities.

9. Executive Officer is a responsible official
directly to the Board of Directors or have significant influence
significant to policies and/or operations
Bank, including division heads, regional office heads,
head of branch office, head of functional office
his position is at least equal to the head of the branch office, head
of the risk management work unit, head of the compliance work
unit, and head of the work unit
internal audit and/or other equivalent officers.

Section 2

(1) Banks are required to apply the principles of good governance in

every business activity of the Bank at all levels or levels of the
organization.
(2) The application of the principles of good governance as referred to
in paragraph (1) is manifested at least in: a. implementation of
the duties and responsibilities of the Board of Directors and

Board of Commissioners;

b. completeness and implementation of the duties of committees

and work units that carry out the function of internal control;

c. implementation of compliance function, internal audit, and audit

external;
d. implementation of risk management;
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e. provision of funds to related parties and

provision of large funds;

f. the strategic plan; and

g. transparency of financial and non-financial conditions.

Article 3

The Financial Services Authority conducts an assessment of

implementation of Bank Governance.

CHAPTER II

BOARD OF DIRECTORS

Part One

Number, Composition, Criteria, and Independence of the Board of Directors

Article 4

(1) Banks are required to have a total number of members of the Board of Directors

at least 3 (three) people.

(2) All members of the Board of Directors as referred to in

paragraph (1) must be domiciled in Indonesia.

(3) The Board of Directors must be led by a president director or

President Director.

Article 5

President director or main director as referred to

in Article 4 paragraph (3) must come from a party that is independent of the

controlling shareholder.

Article 6

(1) Any proposal for replacement and/or appointment

members of the Board of Directors by the Board of Commissioners to the meeting

General Shareholders (GMS), must pay attention

remuneration and nomination committee recommendations.

(2) The majority of members of the Board of Directors must have experience of

at least 5 (five) years in the field of operations and

the lowest as a bank Executive Officer.

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(3) Each member of the Board of Directors must meet the requirements
fit and proper test in accordance with the Regulations
Financial Services Authority regarding Capability Assessment
and Compliance for Main Parties of Service Institutions
Finance.

Article 7

(1) Members of the Board of Directors are prohibited from holding concurrent positions as

members of the Board of Directors, members of the Board of Commissioners or Officers

Executives at banks, companies and/or institutions

other.

(2) Does not include concurrent positions as referred to

in paragraph (1) in the case of the responsible Board of Directors
on the supervision of the Bank's participation in
subsidiary companies, carry out functional tasks of being
a member of the Board of Commissioners in a non-bank subsidiary
company controlled by the Bank, as long as it is not
causing the person concerned to ignore
implementation of duties and responsibilities as a member
Bank Directors.

(3) Members of the Board of Directors either individually or

jointly prohibited from owning shares of more than 25%
(twenty five percent) of the paid-up capital
another company.

Article 8

The majority of members of the Board of Directors are prohibited from having any relationship with each other

family to the second degree with fellow members

Directors and/or with members of the Board of Commissioners.

Article 9

Members of the Board of Directors are prohibited from giving general power
of attorney to other parties which results in the transfer of duties and functions
Directors.
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The second part

Duties and Responsibilities of the Board of Directors

Article 10

(1) The Board of Directors is fully responsible for implementation

bank management.
(2) The Board of Directors must manage the Bank according to their authority
and responsibilities of the Board of Directors as stipulated in
statutes and laws and regulations.

Article 11

The Board of Directors must apply the principles of Good Corporate Governance

both in every business activity of the Bank throughout

level or levels of the organization as intended
in Article 2.

Article 12

The Board of Directors must follow up on audit findings and

recommendations from the Bank's internal audit work unit, external auditors, results
supervision of the Financial Services Authority and/or results
supervision of other authorities.

Article 13

In order to apply the principles of good governance

as referred to in Article 11, the Board of Directors must at least form:

a. internal audit work unit;

b. risk management work unit and management committee
risk; and
c. compliance work unit.

Article 14

The Board of Directors is obliged to account for the implementation of

their duties to the shareholders through the GMS.
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Article 15

The Board of Directors is required to disclose to employees regarding the

Bank's strategic policies in the personnel sector.

Article 16

(1) Directors are prohibited from using individual advisers

and/or professional services as a consultant.
(2) Use of individual advisers and/or services
professionals as a consultant can be done in terms of
meet the requirements: a.
for special projects;
b. based on a clear work contract; and
c. is an Independent Party and owns
qualifications to work on projects of a nature
specifically referred to in letter a.

Article 17

The Board of Directors must provide accurate, relevant and timely data and
information to the Board of Commissioners.

Article 18

(1) The Board of Directors must have work guidelines and procedures that
binding for each member of the Board of Directors.
(2) Work guidelines and rules as intended
in paragraph (1) must include at least: a. work ethic
regulation;
b. working time; and
c. meeting arrangements.

Article 19

The decisions of the Board of Directors are taken in accordance with the guidelines and

work rules are binding and become the responsibility of all members of the
Board of Directors.
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Third Part

Board of Directors meeting

Article 20

(1) Every policy and strategic decision is mandatory

decided through a meeting of the Board of Directors with due observance

supervision in accordance with the duties and responsibilities of the Council

Commissioner.

(2) The decision making of the Board of Directors meeting is as follows

referred to in paragraph (1) must first be carried out based on
deliberation to reach a consensus.
(3) In the event that there is no deliberation to reach a consensus
as referred to in paragraph (2), taking
decisions are made by majority vote.
(4) The Board of Directors is required to make minutes of the meeting of the Board of Directors as referred to

referred to in paragraph (1) and documented accordingly

with statutory regulations.
(5) Dissenting opinion that occurs in the Board of Directors meeting as
referred to in paragraph (1)
must be stated clearly in the minutes of the meeting
along with reasons for disagreement.

Fourth Part

Board of Directors Transparency Aspect

Article 21

Members of the Board of Directors must disclose:

a. share ownership which reaches 5% (five percent) or
more, either to the Bank concerned or to
banks and other companies, which are domiciled inside
and abroad; and
b. financial relationships and family relationships with
other members of the Board of Directors, members of the Board of

Commissioners and/or controlling shareholders of the Bank,

in the governance implementation report as stipulated

in this Financial Services Authority Regulation.
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Article 22

(1) Members of the Board of Directors are prohibited from utilizing the Bank for
personal, family and/or other party interests
may harm or reduce the Bank's profits.
(2) Members of the Board of Directors are prohibited from taking and/or receiving

personal gain from the Bank, other than remuneration and

other facilities determined by decision
GMS.

(3) Members of the Board of Directors must disclose remuneration and

other facilities as referred to in paragraph (2) in the governance
implementation report by referring to
Financial Services Authority Regulation regarding Implementation
Governance in Providing Remuneration for Banks
General.

CHAPTER III

BOARD OF COMMISSIONERS

Part One

Total, Composition, Criteria, and Independence

board of Commissioners

Article 23

(1) Banks are required to have members of the Board of Commissioners of at

least 3 (three) people and a maximum of
equal to the number of members of the Board of Directors.

(2) Members of the Board of Commissioners as referred to in

paragraph (1) at least 1 (one) person must be domiciled in
Indonesia.

(3) The Board of Commissioners must be chaired by a president commissioner

or chief commissioner.
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Article 24
(1) The Board of Commissioners must consist of Independent Commissioners
and Non Independent Commissioners.
(2) Independent Commissioner as referred to in
paragraph (1) must be at least 50% (fifty
percent) of the total members of the Board of Commissioners.

(3) Former members of the Board of Directors or Bank Executive Officers

or parties related to
Bank, which can affect ones abilities
concerned to act independently must undergo a waiting period
(cooling off) of at least 1
(one) year before becoming an Independent Commissioner
to the relevant Bank.
(4) The provisions referred to in paragraph (3) are not
applies to former members of the Board of Directors who
in charge of supervisory functions or Officers
Executives who carry out supervisory functions at the Bank
the.

Article 25
(1) Non-Independent Commissioners may switch to becoming
Independent Commissioner after fulfilling the requirements
as Independent Commissioner.
(2) Non-Independent Commissioner who will switch to becoming
The Independent Commissioner as referred to in paragraph (1) is
required to undergo a cooling off period at most
short 6 (six) months.
(3) Transition from Non-Independent Commissioner to
Independent Commissioners must obtain approval
Financial Services Authority.

Article 26
(1) Independent Commissioner who has served
for 2 (two) consecutive terms of office
can be reappointed in the next period as
Independent Commissioner in terms of:
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a. meeting of members of the Board of Commissioners considered that

Independent Commissioners can still act
independent; and

b. Independent Commissioner stated in the GMS

regarding the independence concerned.

(2) Statement of independence of Independent Commissioners

as referred to in paragraph (1) letter b is mandatory
disclosed in the governance implementation report.

Article 27

(1) Every proposal for appointment and/or replacement

members of the Board of Commissioners to the GMS must
taking into account the recommendations of the remuneration committee and
nomination.

(2) Remuneration and nomination committee members who have

conflict of interest with the proposal
recommended must disclose in the recommended proposal.

(3) Members of the Board of Commissioners must meet the requirements

fit and proper test in accordance with the Regulations
Financial Services Authority regarding Capability Assessment
and Compliance for Main Parties of Service Institutions
Finance.

Article 28

(1) Members of the Board of Commissioners are prohibited from concurrently

position as a member of the Board of Directors, a member of the Board
Commissioner or Executive Officer:
a. at financial institutions or financial companies,
both bank and non-bank;
b. in more than 1 (one) non-financial institution
or a non-financial company, either of which
domiciled at home or abroad.
(2) Does not include concurrent positions as referred to
in paragraph (1) in terms of:
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a. members of the Board of Commissioners serve as members

Directors, members of the Board of Commissioners or Officers
The executive who carries out the oversight function
in 1 (one) non-bank subsidiary company
controlled by the Bank;

b. Non Independent Commissioners carry out their duties

function of the Bank's shareholders
in the form of a legal entity in a business group
Bank; and/or
c. members of the Board of Commissioners hold positions in non-profit
organizations or institutions.
(3) Duties in positions and functions as referred to
in paragraph (2) can be implemented as long as
concerned does not neglect the implementation of duties and
responsibilities as a member of the Bank's Board of Commissioners.

Article 29

The majority of members of the Board of Commissioners are prohibited from

having family relations up to the second degree with
fellow members of the Board of Commissioners and/or members of the Board of Directors.

The second part

Duties and Responsibilities of the Board of Commissioners

Article 30

The Board of Commissioners is obliged to carry out their duties and responsibilities

answer independently.

Article 31

(1) The Board of Commissioners is obliged to ensure the implementation of the Tata

Good management is carried out in every activity

Bank business at all levels or organizational levels as referred to in
Article 2.
(2) The Board of Commissioners is obliged to carry out supervision
on the implementation of the duties and responsibilities of the Board of Directors

as well as providing advice to the Board of Directors.

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(3) In carrying out the supervision as

referred to in paragraph (2), the Board of Commissioners must
direct, evaluate monitor, and

implementation of the Bank's strategic policies.

(4) In carrying out the supervision as
referred to in paragraph (2), the Board of Commissioners is prohibited from participating

as well as in decision-making operational activities

Banks, except:
a. provision of funds to related parties as
stipulated in the provisions regarding the maximum limit for
lending to commercial banks; and
b. other matters stipulated in the articles of association
Banks or laws and regulations.
(5) Decision making on Bank operational activities by
The Board of Commissioners as referred to in paragraph (4)
is part of the Board's oversight duties
Commissioners so as not to negate the responsibility of the Board of

Directors for the implementation of the management of the Bank.

Article 32

The Board of Commissioners must ensure that the Board of Directors has
following up on audit findings and recommendations from the unit
Bank internal audit work, external auditors, monitoring results
Financial Services Authority and/or the results of authority oversight
other.

Article 33

The Board of Commissioners must report to the Service Authority

Finance no later than 7 (seven) working days after finding:
a. violation of laws and regulations in the field
finance and banking; and/or
b. circumstances or approximate circumstances that can
jeopardize the sustainability of the Bank's business.
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Article 34

(1) In order to support the effectiveness of the implementation of duties and

responsibilities, the Board of Commissioners must establish
at least:
a. audit committee;
b. risk monitoring committee; and
c. remuneration and nomination committee.

(2) The Board of Commissioners may form a remuneration committee

and the nomination committee as referred to in
paragraph (1) letter c separately.
(3) Appointment of committee members as intended
in paragraph (1) must be carried out by the Board of Directors based on
decision of the meeting of the Board of Commissioners.

(4) The Board of Commissioners must ensure that the committees that
has been formed as referred to in paragraph (1) and
paragraph (2) carry out the task effectively.
(5) The committee referred to in paragraph (1) and paragraph (2)
shall compile guidelines and work procedures of the committee.

Article 35

(1) The Board of Commissioners must have guidelines and rules of conduct
work that is binding for each member of the Council
Commissioner.

(2) Work guidelines and rules as intended

in paragraph (1) must include at least: a. work ethic
regulation;
b. working time; and
c. meeting arrangements.

Article 36

The Board of Commissioners must provide sufficient time

to carry out duties and responsibilities optimally.
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Third Part

Board of Commissioners meeting

Article 37

(1) Meetings of the Board of Commissioners must be held regularly

periodically at least 4 (four) times in 1 (one) year.
(2) Meeting of the Board of Commissioners referred to in
paragraph (1) must be attended by all members of the Council
Commissioner physically at least 2 (two) times
within 1 (one) year.
(3) In the event that the Non Independent Commissioner cannot
attend the Board of Commissioners meeting physically
as referred to in paragraph (2) then it can
attend meetings of the Board of Commissioners through the means
teleconferencing technology.

Article 38

(1) The decision making of the meeting of the Board of Commissioners

must first be made based on deliberation
for consensus.

(2) In the event that there is no deliberation to reach a consensus

as referred to in paragraph (1), withdrawal
the decision of the meeting of the Board of Commissioners is carried out
based on majority vote.
(3) All decisions of the Board of Commissioners as referred to in paragraph
(1) and paragraph (2) are binding
for all members of the Board of Commissioners.
(4) The Board of Commissioners is obliged to make minutes of Board meetings
Commissioners as referred to in paragraph (1) and
documented in accordance with statutory regulations
invitation.
(5) Dissenting opinion that occurs in the meeting of the Board of
Commissioners as referred to in paragraph (1) must be clearly stated
in the
minutes of meeting along with reasons for dissenting opinion.
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Fourth Part

Aspects of Transparency of the Board of Commissioners

Article 39

Members of the Board of Commissioners must disclose:

a. share ownership which reaches 5% (five percent) or
more, either to the Bank concerned or to
banks and other companies, which are domiciled inside
and abroad; and b.
financial relationships and family relationships with
other members of the Board of Commissioners, members of the Board of Directors and/or

controlling shareholder of the Bank,

in the governance implementation report as stipulated
in this Financial Services Authority Regulation.

Article 40

(1) Members of the Board of Commissioners are prohibited from using the Bank

for personal, family and/or other party interests

which can harm or reduce profits
Bank.

(2) Members of the Board of Commissioners are prohibited from taking and/or
receive personal benefits from the Bank other than
remuneration and other facilities determined by the GMS.
(3) Members of the Board of Commissioners must disclose
remuneration and other facilities determined by the GMS
as referred to in paragraph (2) in the report
implementation of governance as stipulated in
This Financial Services Authority Regulation.
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CHAPTER IV

COMMITTEES

Part One

Committee Structure and Membership

Article 41

(1) The audit committee as referred to in Article 34

paragraph (1) letter a shall consist of at least:
a. 1 (one) Independent Commissioner;
b. 1 (one) person from the Independent Party who owns
expertise in finance or accounting; and
c. 1 (one) person from the Independent Party who owns
expertise in law or banking.
(2) The audit committee as referred to in paragraph (1)
chaired by Independent Commissioner concurrently as
member.
(3) Members of the Board of Directors are prohibited from becoming members of the audit committee

as referred to in paragraph (1).

(4) Independent Commissioners and Independent Parties who
become a member of the audit committee as intended
in paragraph (1) at least 51% (fifty
one percent) of the total number of audit committee members.

(5) Members of the audit committee referred to in

paragraph (1) must have good integrity, character and morals
good.

Article 42
(1) The risk monitoring committee referred to in
Article 34 paragraph (1) letter b shall consist of at least:
a. 1 (one) Independent Commissioner;
b. 1 (one) Independent Party who owns
expertise in finance; and
c. 1 (one) Independent Party who has expertise in risk management.
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(2) The risk monitoring committee as referred to in

paragraph (1) chaired by an Independent Commissioner concurrently
as a member.
(3) Members of the Board of Directors are prohibited from becoming committee members

risk monitoring as referred to in paragraph (1).

(4) Independent Commissioners and Independent Parties who
become a member of the risk monitoring committee as
referred to in paragraph (1) amounting to at least 51%
(fifty one percent) of the total committee members
risk monitor.
(5) Member of the risk monitoring committee referred to
in paragraph (1) must have integrity, character, and morals
the good one.

Article 43

(1) Former members of the Board of Directors or Bank Executive Officers

or parties that have a relationship with the Bank that can affect the
ability of the person concerned to act independently is prohibited

become an Independent Party in the committee members

as referred to in Article 41 paragraph (1) letter b
and letter c as well as Article 42 paragraph (1) letter b and letter c
to the Bank concerned before serving the term
wait (cooling off) for a minimum of 6 (six) months.
(2) The waiting period (cooling off) of at least 6 (six) months as referred
to in paragraph (1) does not apply to
former member of the Board of Directors in charge of the function
supervisor or Executive Officer who performs
supervisory function at the Bank.

Article 44

(1) The remuneration and nomination committee as referred to in Article

34 paragraph (1) letter c has at most
a little:

a. 1 (one) Independent Commissioner;

b. 1 (one) Commissioner; and
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c. 1 (one) Executive Officer in charge

human resources function or 1 (one) employee representative.

(2) Remuneration and nomination committee as referred to

in paragraph (1) is chaired by an Independent Commissioner
concurrently as a member.
(3) Members of the Board of Directors are prohibited from becoming committee members

remuneration and nomination as referred to in

paragraph (1).

(4) If there are more than 3 (three) members of the remuneration and
nomination committee, then the members
Independent Commissioners of at least 2 (two)
people.

Article 45
In the event that the Bank forms a remuneration and nomination committee

separately as referred to in Article 34 paragraph (2), the membership of each

committee must refer to the provisions referred to in

Article 44.

The second part

Concurrent Positions of Committee Chairman

Article 46

The chairman of the committee as referred to in Article 34

prohibited from holding concurrent positions as chairman of the committee
from 1 (one) on another committee.

Third Part

Duties and Responsibilities of the Committee

Article 47

(1) The audit committee is obliged to carry out monitoring and evaluation
on the planning and implementation of audits as well
monitoring of the follow-up of audit results in the framework
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assess the adequacy of internal control, incl

adequacy of the financial reporting process.
(2) In order to carry out the tasks as
referred to in paragraph (1), the audit committee is required to conduct
monitoring and evaluation of at least:
a. carrying out the duties of the internal audit work unit;
b. suitability of the implementation of the audit by the accounting firm
public with auditing standards;
c. conformity of financial reports with standards
financial Accounting;
d. implementation of follow-up by the Board of Directors on the results
findings of the internal audit work unit, public accountants,
and the results of supervision of the Financial Services Authority,

to make recommendations to the Council

Commissioner.

(3) The audit committee is required to provide recommendations regarding

appointment of a public accountant and public accounting firm to the
Board of Commissioners to be submitted to
GMS.

Article 48

The risk monitoring committee must at least:

a. evaluation of conformity between management policies
risk with the implementation of Bank policies; and
b. monitoring and evaluating the implementation of the duties of the risk
management committee and the risk management work unit,
to provide recommendations to the Board of Commissioners.

Article 49

The remuneration and nomination committee has the duties and

least responsibility:
a. related to the remuneration policy must: 1. evaluate
the remuneration policy based on performance, risk, fairness

with peer groups, goals, and long term strategies

length of the Bank, fulfillment of reserves as
regulated in laws and regulations
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and potential income of the Bank in the future

come;
2. submit evaluation results and recommendations
to the Board of Commissioners regarding:
a) remuneration policy for the Board of Directors and Board
Commissioners to be submitted to the GMS;
and

b) remuneration policy for employees on a regular basis

whole to submit to
Directors;

3. ensure that the remuneration policy has been implemented

according to criteria; and
4. conduct periodic evaluations of
application of remuneration policies;
b. related to mandatory nomination policy:
1. compiling and providing recommendations regarding
systems and procedures for selection and/or
replacement of members of the Board of Directors and members of the Board

Commissioner to the Board of Commissioners for

submitted to the GMS;
2. provide recommendations regarding prospective members
Directors and/or prospective members of the Board of Commissioners

to the Board of Commissioners for submission

to the GMS; and
3. provide recommendations regarding Parties
Independent who will become a member of the audit committee
as referred to in Article 41 paragraph (1)
letter b and letter c as well as members of the monitoring committee
risks as referred to in Article 42
paragraph (1) letter b and letter c to the Council
Commissioner.
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Fifth Part
Committee meeting

Article 50
(1) Committee meetings are held as needed
Bank.
(2) Audit committee and risk monitoring committee meetings only
can be carried out if attended by at least
51% (fifty one percent) of the total committee members
including 1 (one) Independent Commissioner
and 1 (one) Independent Party.
(3) Remuneration and nomination committee meetings can only be
held in the event attended by at least 51%
(fifty one percent) of the total committee members
including 1 (one) Independent Commissioner,
and 1 (one) Executive Officer in charge
human resources or 1 (one) representative
employee.

Article 51
(1) The decision of the committee meeting must be made in advance
based on deliberation for consensus.
(2) In the event that there is no deliberation to reach a consensus
as referred to in paragraph (1), withdrawal
decisions are made by majority vote.
(3) The results of the committee meeting referred to in paragraph (1)
must be included in the treatise meeting and
documented in accordance with statutory regulations
invitation.
(4) Dissenting opinion that occurs in the committee meeting as referred
to in paragraph (1)
must be stated clearly in the minutes of the meeting
along with reasons for disagreement.
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CHAPTER V

COMPLIANCE, INTERN AUDIT AND EXTERNAL AUDIT FUNCTIONS

Part One

Bank Compliance Function

Article 52
Banks are required to ensure compliance with regulations
Financial Services Authority laws and regulations
other legislation.

Article 53

(1) In order to ensure compliance as

referred to in Article 52, Banks are required
appoint 1 (one) director in charge
compliance function by referring to the requirements
and procedures in accordance with the provisions governing the
implementation of the compliance function of commercial banks.
(2) In order to assist the implementation of the duties of the director
overseeing the compliance function effectively,
Banks are required to establish a compliance work unit
(compliance unit) which is independent of the work unit
operational.
(3) The compliance work unit as referred to in paragraph (2) is required
to prepare and update work guidelines as well as systems and
procedures.

The second part

Internal Audit Function

Article 54

(1) Banks are required to implement the internal audit function effectively
by referring to the requirements and procedures as stipulated in
the provisions regarding
assignment of compliance director and
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application of standards for the implementation of the bank's internal audit function
general.

(2) In order to carry out the internal audit function

effective, the Bank is required to establish an internal audit work unit
independent of the operational work unit.
(3) Internal audit work unit as referred to in
paragraph (2) must compile and update guidelines
work and systems and procedures, as
provisions governing the assignment of directors
compliance (compliance director) and application of standards
implementation of the internal audit function of commercial banks.

Third Part

External Audit Function

Article 55

(1) Banks are required to appoint public accountants and public

accounting firms registered with the Financial Services Authority
in carrying out audits of the Bank's financial statements.
(2) Appointment of public accountants and public accounting firms
as referred to in paragraph (1) is mandatory in advance
previously obtained the approval of the GMS based on
the proposal submitted by the Board of Commissioners is appropriate
audit committee recommendation.

(3) Audit as referred to in paragraph (1) and appointment of public

accountants and public accounting firms
as referred to in paragraph (2) shall comply
Regulation of the Financial Services Authority regarding
Transparency and Publication of Bank Reports and provisions
governing the use of accounting services
public and public accounting firms.
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CHAPTER VI

IMPLEMENTATION OF RISK MANAGEMENT

Article 56

Banks are required to implement effective risk management, which

adjusted to the objectives, business policies, size and
business complexity and the ability of the Bank with
guided by the requirements and procedures as
in the provisions of the Financial Services Authority regarding
implementation of risk management for commercial banks.

CHAPTER VII

PROVISION OF FUNDS TO RELATED PARTIES AND

BIG PROVISION OF FUNDING

Article 57

In order to avoid the failure of the Bank's business as

due to the concentration of the provision of funds and increase
independence of the Board of Directors and Board of Commissioners of the Bank against

potential intervention from related parties, the Bank is required to apply

the principle of prudence in providing funds, among others
by implementing portfolio deployment or diversification
provision of funds provided.

Article 58

Implementation of provision of funds to related parties and/or

provision of large funds (large exposures) must be guided
to the provisions governing the maximum limit
public bank lending.
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CHAPTER VIII

BANK STRATEGIC PLAN

Article 59

(1) Banks are required to prepare a strategic plan in the form

corporate plan and business plan
(business plans).
(2) Submission of corporate plans (corporate plan)
as referred to in paragraph (1) and changes to the corporate plan to
the Service Authority
Finance is guided by the governing provisions
regarding the institution of commercial banks.
(3) Preparation and submission of business plans (business
plan) as referred to in paragraph (1) is guided by
on the provisions of the Financial Services Authority that regulates
regarding the bank's business plan.

CHAPTER IX

TRANSPARENCY ASPECT OF BANK CONDITIONS

Article 60

(1) Banks are required to implement condition transparency

financial and non-financial to Stakeholders
Interest.
(2) In the framework of implementing transparency of financial and non-
financial conditions as intended
in paragraph (1), the Bank is required to prepare and present
reports with procedures, types, and scope
as in the provisions of the Financial Services Authority
governing transparency and publication
bank statements.

Article 61

Banks are required to implement information transparency regarding

products and use of Bank customer data with
guided by the requirements and procedures as
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in the provisions governing transparency

information on bank products and the use of customer personal data and the
provisions of the Financial Services Authority that regulates them
regarding consumer protection in the financial services sector.

CHAPTER X

INTERNAL REPORTING AND CONFLICT OF INTEREST

Article 62

In order to improve the quality of the decision-making process by the Board of

Directors and the quality of the supervision process by

Board of Commissioners, the Bank must ensure the availability and

adequacy of internal reporting supported by the system
adequate management information.

Article 63

In the event of a conflict of interest, members of the Board of Directors,

members of the Board of Commissioners and Executive Officers are prohibited
from taking actions that may harm the Bank or
reduce the Bank's profits and are required to disclose
conflict of interest in every decision.

CHAPTER XI

GOVERNANCE AND IMPLEMENTATION REPORT

ASSESSMENT OF GOVERNANCE IMPLEMENTATION

Part One

Governance Implementation Report

Article 64

(1) Banks are required to prepare reports on the implementation of governance

at the end of each financial year.

(2) The report on the implementation of governance as referred to in paragraph

(1) at least includes:
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a. the scope of Governance as referred to in

Article 2 paragraph (2) and the results of the Bank 's self-
assessment of the implementation of Bank Governance;
b. share ownership of members of the Board of Directors and relationships

financial and family relations of members of the Board of Directors

with other members of the Board of Directors, members of the Board

Commissioners and/or controlling shareholders

Bank as referred to in Article 21;
c. share ownership of members of the Board of Commissioners as well
financial relationships and family relationships
members of the Board of Commissioners with members of the Board of Directors,

other members of the Board of Commissioners and/or holders

controlling shares of the Bank as referred to
in Article 39;
d. frequency of meetings of the Board of Commissioners;

e. the number of irregularities (internal fraud) that occurred

and settlement efforts by the Bank;
f. the number of legal issues and settlement efforts by the Bank;

g. transactions that contain conflict of interest;

h. share buy back and/or
Bank bonds; and
i. granting of funds for social activities and activities
politics, both nominally and recipients of funds.
(3) Report on the implementation of governance as referred to in
paragraph (1) related to the implementation of remuneration
refers to the Regulation of the Financial Services Authority
regarding the Implementation of Governance in Giving
Remuneration for Commercial Banks.
(4) Further provisions regarding the procedures for preparation
governance implementation reports are further regulated in
Financial Services Authority Circular Letter.

Article 65

(1) Banks are required to submit reports on the implementation of procedures

manage as referred to in Article 64 to
Financial Services Authority and Bank shareholders
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no later than 4 (four) months after the financial year

end.

(2) Report on the implementation of governance as referred to

in paragraph (1) must be published on the Bank's website
no later than 4 (four) months after the financial year
end.

(3) Banks are considered late in submitting reports

implementation of governance and/or publish
governance implementation report on the Bank's website
if the Bank submits and/or publishes a report on the implementation
of governance beyond the deadline
the time of submitting the report as intended
in paragraph (1) and/or publication deadline on
Bank website as referred to in paragraph (2)
but has not exceeded 1 (one) month since the deadline
the time of submitting the report on the implementation of governance.

(4) The Bank is deemed not to have submitted a report on the

implementation of governance and/or published a report on the
implementation of governance on the Bank's website
if the Bank has not submitted and/or
publish reports on the implementation of internal governance
deadline for delays as referred to in
paragraph (3).

Article 66
Submission of reports on the implementation of governance to the Authority
Financial Services as referred to in Article 65
paragraph (1) letter a addressed to:
a. The relevant Bank Supervision Department for Banks that
head office or branch office of that bank
domiciled abroad in the region
Province of the Special Capital Region of Jakarta; or
b. Regional Office of the Financial Services Authority or the local
Financial Services Authority Office according to the area of location
the position of the Bank's head office.
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The second part

Self-assessment by the Bank on the Implementation of Governance

Article 67

(1) Banks are required to carry out a self-assessment

on the implementation of Bank Governance which includes matters
as regulated in Article 2 paragraph (2) at most
at least 2 (two) times in 1 (one) year.
(2) Results of self-assessment by the Bank (self-assessment) on
implementation of Governance as referred to in
paragraph (1) is an integral part of
governance implementation report.

Article 68

(1) In order to evaluate the application

Governance as referred to in Article 3,
The Financial Services Authority may conduct an assessment or evaluation

of the results of a self-assessment by the Bank (self-assessment) on the

implementation of Good Corporate Governance as referred to in paragraph (1)

referred to in Article 67 paragraph (1).

(2) Based on the results of self-assessment by the Bank (self
assessment) or evaluation as referred to in
paragraph (1), the Financial Services Authority may request the Bank
to submit an action plan that contains corrective steps that must
be carried out by the Bank with a certain target time.

(3) If necessary, the Financial Services Authority can

request the Bank to make adjustments to the plan
action (action plan) as referred to in paragraph (2)
and/or carry out special checks on the results
improvement of the implementation of Governance that has been carried out
by Banks.
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CHAPTER XII

GOVERNANCE IMPLEMENTATION

AT A BRANCH OFFICE OF A DOMICILED BANK

ABROAD

Article 69

(1) Branch offices of banks domiciled outside

The state is obliged to comply with the provisions regarding implementation

Governance as regulated in Authority Regulations

This Financial Services.
(2) Implementation of the functions of the Board of Commissioners and formation

committee adapted to the organizational structure

applies to the Bank.
(3) The adjustments as referred to in paragraph (2) are mandatory
fulfill all the functions required in
implementation of Governance as stipulated in
This Financial Services Authority Regulation.

Article 70

The Financial Services Authority has the authority to request adjustments

branch office organizational structure of the bank
domiciled abroad to ensure implementation
Governance in accordance with this Financial Services Authority Regulation.

CHAPTER XIII

PENALTY

Part One

Governance Implementation Sanctions

Article 71

Banks that do not comply with the provisions referred to

in Article 2 paragraph (1), Article 4, Article 5, Article 6 paragraph (2),
Article 7 paragraph (1), Article 7 paragraph (3), Article 8, Article 9, Article 10
paragraph (2), Article 11, Article 12, Article 13, Article 14, Article 15,
Article 16 paragraph (1), Article 17, Article 18, Article 20 paragraph (1),
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Article 20 paragraph (2), Article 20 paragraph (4), Article 20 paragraph (5),

Article 21, Article 22, Article 23, Article 24 paragraph (1), Article 24 paragraph (2),

Article 24 paragraph (3), Article 26 paragraph (2), Article 27 paragraph (2),

Article 28 paragraph (1), Article 29, Article 30, Article 31 paragraph (1),

Article 31 paragraph (2), Article 31 paragraph (3), Article 31 paragraph (4), Article 32,

Article 33, Article 34 paragraph (1), Article 34 paragraph (3), Article 34 paragraph (4),

Article 34 paragraph (5) Article 35, Article 36, Article 37 paragraph (1),

Article 37 paragraph (2), Article 38 paragraph (1), Article 38 paragraph (4), Article 38

paragraph (5), Article 39, Article 40, Article 41 paragraph (3), Article 41

paragraph (5), Article 42 paragraph (3), Article 42 paragraph (5), Article 43 paragraph (1),

Article 44 paragraph (3), Article 45, Article 46, Article 47, Article 48,

Article 49, Article 51 paragraph (1), Article 51 paragraph (3), Article 51 paragraph (4),

Article 52, Article 53 paragraph (2), Article 53 paragraph (3), Article 55 paragraph (2),

Article 62, Article 63, Article 67 paragraph (1), Article 69 paragraph (1)

and/or Article 69 paragraph (3) is subject to administrative sanctions,

among others in the form of:

a. written warning; b.

downgrade of the Governance factor in the assessment

health level;

c. freezing of certain business activities;

d. dismissal of members of the Board of Directors and/or members of the Board

Commissioner of the Bank as well as the appointment and appointment

replacement for members of the Board of Directors and/or members of the Board

Temporary commissioner until GMS or equivalent to GMS

appoint replacement members of the Board of Directors and/or members

Permanent Board of Commissioners with the approval of the Authority

Financial Services; and/or

e. inclusion of members of the Board of Directors and/or members of the Board

Commissioners, employees, shareholders of the Bank in the Register

Failed through the ability assessment mechanism

and propriety.

Article 72

(1) Banks that do not comply with the provisions as

referred to in Article 52 and/or Article 53 paragraph (1)

subject to sanctions as referred to in

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regulations regarding the implementation of the bank's compliance function

general.

(2) Banks that do not comply with the provisions as

referred to in Article 54 shall be subject to sanctions as follows
referred to in the regulations regarding the assignment of directors
compliance (compliance director) and application of standards
implementation of the bank's internal audit function.

(3) Banks that do not comply with the provisions as

referred to in Article 55 paragraph (1) and Article 55 paragraph (3)
subject to sanctions as referred to in
regulations regarding procedures for using the service
public accountants and public accounting firms for institutions
supervised by the Financial Services Authority.

Article 73

Banks that do not comply with the provisions regarding implementation

risk management as referred to in Article 56 shall be subject to sanctions
as regulated in the Regulations
Financial Services Authority regarding Implementation of Management
Risk for Commercial Banks.

Article 74

Banks that do not comply with the provisions regarding implementation

the principle of prudence in providing funds to parties
related and/or provision of large funds as
referred to in Article 57 and Article 58 shall be subject to sanctions

as stipulated in the provisions regarding limits

maximum lending to commercial banks.

Article 75

Banks that do not comply with the provisions regarding preparation

strategic plan as referred to in Article 59
paragraph (1) shall be subject to sanctions as stipulated in the provisions
governing public bank institutions
and Regulations of the Financial Services Authority concerning Plans
Banking Business.
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Article 76

(1) Banks that do not comply with provisions related to transparency of

financial and non-financial conditions
as referred to in Article 60 shall be subject to sanctions
as stipulated in the Service Authority Regulations
Finance regarding Transparency and Report Publication
Bank.

(2) Banks that do not comply with related provisions

transparency of information about products and
the use of Bank customer data as referred to in Article 61 shall be
subject to sanctions as regulated
in the provisions regarding information transparency
bank products and use of customer personal data and
provisions regarding consumer protection in the service sector
finance.

The second part

Reporting Sanctions

Article 77

(1) Banks that are late in submitting reports

implementation of governance as referred to in
Article 65 paragraph (3) is subject to administrative sanctions in the form of

a fine of Rp. 1,000,000.00 (one million rupiah) per day

lateness.

(2) Banks that publish reports late

implementation of governance as referred to in
Article 65 paragraph (3) is subject to administrative sanctions in the form of

a fine of Rp. 1,000,000.00 (one million rupiah) per day

lateness.

(3) Banks that do not submit implementation reports

governance as referred to in Article 65 paragraph
(4) subject to administrative sanctions in the form of a fine of Rp.
100,000,000.00 (one hundred million rupiah) and a warning
written by the Financial Services Authority.
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(4) Banks that do not publish on the Bank's website

as referred to in Article 65 paragraph (4) shall be imposed with an
administrative sanction in the form of a fine of
Rp. 100,000,000.00 (one hundred million rupiah) and a warning
written by the Financial Services Authority.
(5) Banks that submit reports that are considered not
significantly correct and/or incomplete
as referred to in Article 64 shall be subject to sanctions
administrative in the form of a fine of IDR 250,000,000.00
(two hundred and fifty million rupiah) and administrative sanctions,
among others, in the form of:
a. decline in the level of health in the form of a decrease
management factor ranking in the level assessment
health;
b. freezing of certain business activities;
c. dismissal of the management of the Bank and so on
appoint and appoint a temporary replacement
until the GMS or Cooperative Member Meeting
raised a replacement that remained with
approval from the Financial Services Authority; and/or
d. inclusion of board members, employees, holders
Bank shares in the Failed List through

fit and proper test mechanism.

(6) Imposition of administrative sanctions in the form of fines
as referred to in paragraph (5) is carried out after
The Bank was given 2 (two) warning letters by the Authority
Financial Services with a grace period of 7 (seven) days
work for any reprimand and the Bank does not repair
report within 7 (seven) working days after
last warning letter.
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CHAPTER XIV

TRANSITIONAL PROVISIONS

Article 78

For Independent Commissioners who have served

for 2 (two) consecutive periods or more at the time
the enactment of this Financial Services Authority Regulation,
fulfillment of the provisions referred to in
Article 26, carried out when the person concerned will
reappointed as Independent Commissioner.

CHAPTER XV

CLOSING

Article 79

Further provisions of the Financial Services Authority Regulation

This is regulated in a Circular Letter of the Financial Services Authority.

Article 80

With the enactment of this Financial Services Authority Regulation

so:

a. Bank Indonesia Regulation Number 8/4/PBI/2006

January 30, 2006 concerning Implementation of Good
Corporate Governance for Commercial Banks (Gazette
Republic of Indonesia of 2006 Number 6,
Supplement to the State Gazette of the Republic of Indonesia
number 4600); and
b. Bank Indonesia Regulation Number 8/14/PBI/2006 dated
5 October 2006 concerning Amendments to Bank Regulations
Indonesia Number 8/4/PBI/2006 concerning Implementation
Good Corporate Governance for Commercial Banks (Gazette
Republic of Indonesia of 2006 Number 71,
Supplement to the State Gazette of the Republic of Indonesia
Number 4640),

revoked and declared invalid.

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Article 81

This Financial Services Authority Regulation comes into force on the date of promulgation.

So that everyone knows about it, ordered

promulgation of this Financial Services Authority Regulation with

placement in the State Gazette of the Republic of Indonesia.

Set in Jakarta

on December 7, 2016

CHAIRMAN OF THE BOARD OF COMMISSIONERS

FINANCIAL SERVICES AUTHORITY,

signed

MULIAMAN D. HADAD

Promulgated in Jakarta

on December 9, 2016

MINISTER OF LAW AND HUMAN RIGHTS

REPUBLIC OF INDONESIA,

signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA OF 2016 NUMBER 286

Copy according to the original

Legal Director 1
Legal Department

signed

Yuliana