OJK Issues Two Rules for Strengthening People’s Economic Banks and Sharia People’s Economic Banks

Jakarta – The Financial Services Authority (OJK) continues to strive to strengthen and develop the banking sector, especially People’s Economic Banks (BPR) and Sharia People’s Economic Banks (BPRS) by issuing OJK Regulations (POJK) regarding determining the status and follow-up supervision of BPRs and BPRS and POJK quality of BPR assets.


POJK Number 28 of 2023 (POJK 28/202​3) concerning Determination of the Status and Follow-up Supervision of BPRs and BPRSs was issued to support and realize efforts to develop and strengthen BPRs/BPRSs in line with the increasingly complex and diverse development of the financial services industry.


Meanwhile, POJK Number 1 of 2024 (POJK 1/2024) concerning BPR Asset Quality was issued to build a BPR industry that is healthy and has high competitiveness by always paying attention to the principles of prudence and risk management of business activities, especially asset management.

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The two POJKs in question are a follow-up to the mandate of Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (UU P2SK).


POJK 28/2023 is an improvement on POJK Number 19/POJK.03/2017 concerning Determination of Status and Follow-up Supervision of Rural Banks and Sharia Rural Banks as amended by POJK Number 32/POJK.03/2019.


This POJK contains regulatory adjustments regarding, among other things, the status and term of supervision of BPRs and Sharia BPRs, the supervisory duties of the Financial Services Authority, and the placement of funds by the Deposit Insurance Corporation. POJK 28/2023 will come into effect on 31 December 2023.

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POJK Number 1 of 2024


POJK 1/2024 is also an improvement on POJK No.33/POJK.03/2018 concerning the Quality of Productive Assets and the Establishment of Allowances for the Loss of Productive Assets of People’s Economic Banks, which is motivated by several things, namely:


Alignment of regulations regarding Foreclosed Collateral and permitted business activities in accordance with Law No. 4 of 2023 concerning Development and Strengthening of the Financial Sector;

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Issuance of financial accounting standards for private entities which are a replacement for financial accounting standards without public entities which will take effect on January 1 2025;


Results of evaluation of problems and resolution of credit provision after the COVID-19 pandemic; And Alignment with the latest regulations and improvements to principles-based regulations.


The main provisions of POJK 1/2024 consist of expanding the scope of productive assets, adding regulations regarding non-productive assets, quality of productive assets, allowance for assessment of asset quality and allowance for impairment losses (CKPN), credit restructuring, abandoned property, repossessed collateral, write-offs , credit policies and credit procedures.


Anang Fadhilah