Bank Indonesia Regulation Number 11/25/pbi/2009 Year 2009

Original Language Title: Peraturan Bank Indonesia Nomor 11/25/PBI/2009 Tahun 2009

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Read the untranslated law here: http://peraturan.go.id/inc/view/11e44c4f87d758409a15313232313539.html

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Back COUNTRY SHEET Republic of INDONESIA No. 103, 2009 (Additional explanation in the State Gazette of the Republic of Indonesia Number 5029) BANK INDONESIA REGULATION number: 11/25/PBI/2009 ABOUT CHANGES to the BANK INDONESIA REGULATION No. 5/8/PBI/2003 on the APPLICATION of RISK MANAGEMENT for COMMERCIAL BANKS with the GRACE of GOD ALMIGHTY the GOVERNOR of BANK INDONESIA, Considering: a. that the increasing complexity of products and activities of the Bank then the risk faced by the Bank will be increasing;
b. that the increased risk faced by Banks needs to be balanced with the quality of the implementation of an adequate risk management;
c. that transparency is one of the aspects that need to be noticed in the control of risks faced by the Bank;
d. that the implementation of quality improvement risk management will support the effectiveness of the bank's risk-based oversight framework;
e. that in connection with the matters referred to in letter a up to d, then the perceived need to set back the implementation of risk management for commercial banks in a Bank Indonesia Regulations;
Remember: 1. Act No. 7 of 1992 about banking (State Gazette of the Republic of Indonesia Number 31 in 1992, an additional Sheet of the Republic of Indonesia Number 3472) as amended by Act No. 10 of 1998 (State Gazette of the Republic of Indonesia Number 182 of 1998, an additional Sheet of the Republic of Indonesia Number 3790);
2. Act No. 11 of 1999 on Bank Indonesia (the State Gazette of the Republic of Indonesia year 1999 Number 66, an additional Sheet of the Republic of Indonesia Number 3843) as last amended by Act No. 6 of 2009 about the determination of the Replacement Government Regulations Act No. 2 of 2008 about the second amendment in the Law Number 23 of 1999 on Bank Indonesia into law (State Gazette in 2009 Indonesia number 7 Additional Sheets, the Republic of Indonesia Number 4962);
3. Act No. 21 of 2008 about Islamic banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, an additional Sheet of the Republic of Indonesia Number 4867);
Decide: define: BANK INDONESIA REGULATION CONCERNING CHANGES to BANK INDONESIA REGULATION No. 5/8/PBI/2003 on the APPLICATION of RISK MANAGEMENT for COMMERCIAL BANKS.
Article I a few provisions in the regulation of Bank Indonesia No. 5/8/PBI/2003 on the application of risk management For commercial banks (State Gazette of the Republic of Indonesia Number 56 in 2003, an additional Sheet of the Republic of Indonesia Number 4292) is amended as follows: 1. The provision of article 1 amended to read as follows: article 1 In regulation of Bank Indonesia this is: 1. The Bank is a public Bank as stipulated in Act No. 7 of 1992 about Banking as amended by Act No. 10 of 1998 , including branch offices of foreign banks, and public Bank Syariah as stipulated in Act No. 21 of 2008 about Islamic banking.
2. Public Bank conventional Conventional commercial banks as stipulated in Act No. 21 of 2008 about Islamic banking.
3. Public Bank Sharia is Islamic commercial banks as stipulated in Act No. 21 of 2008 about Islamic banking.
4. Risk is the potential loss due to the occurrence of an event (events).
5. Risk management is a set of methodologies and procedures used to identify, measure, monitor, and control the Risks arising from all business activities of the Bank.
6. Credit risk is a risk due to the failure of the debtor and/or other parties in meeting the obligations to the Bank.
7. Market risk is the risk on its balance sheet position and an administrative account includes transactions of derivatives, due to changes in its entirety from market conditions, including the risk of a price change option.
8. Liquidity risk is the risk due to the inability of the Bank to meet its obligations due from cash flow funding sources and/or of high quality liquid assets that can be diagunkan, without affecting the activity and financial condition of the Bank.
9. Operational risk is a risk due to insufficiency and/or no proper functioning of the internal process, human error, system failure, and/or the presence of external events that affect the operations of the Bank.
10. Compliance Risk is a risk due to the Bank does not comply with and/or does not implement the regulations and conditions.
11. Legal risk is the risk of lawsuits and/or weakness of the juridical aspect.
12. Reputational risk is the risk due to the decrease in the level of stakeholder confidence that stems from the negative perception towards the Bank.
13. Strategic Risk is the risk due to inaccuracies in the taking and/or the implementation of a strategic decision as well as failures in anticipation of changes in the business environment. 14. Board of Directors: a. for a Bank shaped like a limited liability company is the Board of Directors as stipulated in the law on limited liability companies;
b. for the Bank shaped company law Areas is the Board of Directors as stipulated in the law on the regional Companies;
c. Cooperative law shaped for banks is the Executive Board as stipulated in the law on Perkoperasian; d. for branch offices of foreign banks was Chairman of the branch offices of foreign banks. 15. Board of Commissioners: a. for a Bank shaped like a limited liability company is the Board of Commissioners as stipulated in the law on limited liability companies;
b. for the Bank shaped company law Areas supervisory is referred to in the law on the regional Companies;
c. Cooperative law shaped for banks is the supervisor referred to in the law on Perkoperasian.
16. the company is a legal entity or company owned and/or controlled by the Bank, directly or indirectly, both inside and outside the country who do business activities in the field of finance, consisting of: a. Company (subsidiary company) that is the child of the company with ownership of Banks by more than 50% (fifty perseratus);
b. the company participation (participation company) is a company with a Bank's ownership of 50% (fifty perseratus) or less, but the Bank has control of the company;
c. companies with ownership of a Bank of more than 20% (twenty perseratus) up to 50% (fifty perseratus) which meet the requirements, namely: i. the ownership of the Bank and other parties on the company are each as large; and ii. each owner of controlling jointly against the child;
d. Other Entities based on Financial accounting standards applicable to compulsory consolidated.

2. The provisions of article 2, to read as follows: article 2 (1) the Bank is obliged to apply risk management effectively, either individually or for Bank to Bank consolidation by the company.
(2) the application of risk management as referred to in subsection (1) at least the following: a. active supervision of Board of Commissioners and Board of Directors;

b. adequacy of policies, procedures, and the determination of the limit of risk management;
c. the adequacy of the process of identification, measurement, monitoring, and controlling risk, and risk management information systems; and d. a comprehensive internal control system.

3. The provisions of article 4 is modified, so that it reads as follows: article 4 (1) the risk referred to in article 2 include: a. credit risk;

b. market risk;

c. liquidity risk;

d. operational risk;

e. legal risk;

f. reputational risk;

g. Strategic Risks; and h. the compliance Risk;
(2) compulsory Public Conventional Banks apply risk management to the whole Risk as referred to in paragraph (1).
(3) compulsory Public Sharia Banks apply risk management to at least four (4) types of Risk as referred to in paragraph (1) letter a, letter b, letter c, letter d and.

4. Explanation of article 8 is amended as stated in the description.

5. The provisions of article 20 amended to read as follows: article 20 (1) the Bank is required to have written policies and procedures to manage risks inherent in the Bank's new products or activities.
(2) the policies and procedures referred to in subsection (1) at least covers: a. systems and procedures (standard operating procedures) and the authority in the management of a new product or activity;
b. identification of the entire risk inherent in new product or activity is either related to the Bank or the customer;
c. the period of test measurement methods and monitoring risks to new product or activity; d. information systems accounting for new product or activity;

e. analysis of the legal aspects for a new product or activity; and f. the transparency of information to customers.
(3) the product or activity of the Bank is a new product or new activity if it meets the following criteria: a. never published or made earlier by the Bank; or b. have been published or carried out previously by the Bank but done the development change or improve certain Risk exposure of the Bank.
6. Between article 20 and article 21 pasted one article, namely Article 20 A to read as follows: article 20 A Bank prohibited from assigning or approve Trustees and/or Bank employee to market a product or carry out activities that do not constitute a product or activity Bank by using means or banking facilities.

7. The provisions of article 9, to read as follows: article 21 of the Bank is obliged to apply the transparency of product information or the activity of the Bank to the customer as stipulated in article 8 paragraph (2) letter f, both written and oral.


8. The provisions of article 24, to read as follows: article 24 (1) the Bank is obliged to submit a report to Bank Indonesia's risk profile.
(2) the report of the risk profile as referred to in paragraph (1) which is delivered by a work unit risk management, mandatory load of the same substance with a risk profile report submitted by a unit of work to the Director of risk management Committee and risk management.
(3) risk profile Report referred to in subsection (1) is submitted quarterly to the position in March, June, September, and December.
(4) Risk Profile Report referred to in subsection (1) is submitted at least 15 (fifteen) working days after the end of the month reports.
(5) in case it is needed, Bank Indonesia can ask the Bank's risk profile report referred to in subsection (1) are outside the specified time period.

9. The provisions of article 25, to read as follows: article 25 (1) the Bank is obligated to deliver a new product or activity report to Bank Indonesia, which consists of: a. a report publishing product plan or the implementation of new activities; and b. the report realization of publishing product or implementation of new activities.
(2) a report of the plan referred to in subsection (1) letter a compulsory submitted at least sixty (60) days prior to the publication or implementation of new products or activities.
(3) the realization of the Report referred to in subsection (1) letter b mandatory delivered no later than 7 (seven) working days after the new product or activity is performed.
(4) in addition to comply with reporting as referred to in paragraph (1), the plan of publishing product or implementation of new activities that meet the criteria in article 8 paragraph (3) a mandatory inclusion in the business plan of the Bank.
(5) based on the results of the evaluation of the report referred to in subsection (1) letter a, Bank Indonesia can forbid the Bank to issue the product or carry out new activities planned.
(6) in the case at a later date on the basis of the evaluation of Bank Indonesia, the published product or activity undertaken meet the conditions as follows: a. not in accordance with the plan of publishing products or new activity reported to Bank Indonesia;
b. potentially inflicting significant losses against the financial condition of the Bank; and/or c. not in accordance with the applicable provisions, Bank Indonesia may order the Bank to stop publishing products or the execution of the activity in question.
(7) reports plans and realization for publishing product or implementation of specific events can be set individually in the Circulars.

10. The provisions of article 26 amended to read as follows: article 26 (1) the Bank is obligated to deliver another report to Bank Indonesia other than as stipulated in article 24, in case there are conditions that could potentially cause significant losses against the financial condition of the Bank.
(2) the Bank is obligated to deliver to the Bank Indonesia other reports related to the implementation of risk management and/or related to publishing product or implementation of specific activities on a regular basis or at any time when necessary.
(3) the reporting Format and procedures referred to in subsection (2) is set individually in the Circulars.

11. The provisions of article 29 amended to read as follows: article 29 the reports referred to in Article 22, article 23, article 24, article 25, Article 26 and the obligatory submitted to Bank Indonesia with the address: a. Supervision Directorate of the Bank related, JL. M.H. Thamrin No.2, Jakarta 10350 for banks headquartered in the region the headquarters of Bank Indonesia.
b. Office of Bank Indonesia, for banks headquartered outside the working area of the headquarters of Bank Indonesia.

12. The provisions of article 33 amended to read as follows: article 33 (1) report a late Bank as stipulated in article 22, article 23, article 24 and Article 25, paragraph (1) letter b and subsection (7), and article 26 paragraph (2) obligation to pay penalties amounting to Rp RP 1,000,000 (one million rupiah) per day of delay per report.
(2) Banks that have yet to submit a report or report referred to in Article 22, article 23, article 24 and Article 25, paragraph (1) letter b, and subsection (7), and article 26 paragraph (2) after 1 (one) months from the deadline for the submission of the report time penalized to pay liabilities amounting to Rp 50,000,000 (fifty million rupiah) per report.
(3) the Bank has yet to submit a report as referred to in article 22, article 23, article 24 and Article 25, paragraph (1) letter b and subsection (7), and article 26 paragraph (2) and has been penalized to pay obligations as referred to in paragraph (2), remain obligated to report to Bank Indonesia.
(4) the Bank does not report the plan referred to in Article 25 paragraph (1) letter a liability to pay penalties amounting to Rp RP 100,000,000 (one hundred million rupiah).
(5) banks that submit a report as referred to in article 22, article 23, article 24 and Article 25, paragraph (1) letter b and subsection (7), and article 26 paragraph (2) but rated a significantly incomplete or not enclosed with the documents and information material in accordance with the specified format, the obligation to pay penalties amounting to Rp RP 50,000,000 (fifty million dollars) after the Bank provided 2 (two) times a letter of reprimand by Bank Indonesia with the grace period 7 (seven) working days for each reprimand and the Bank did not fix the report within a period of 7 (seven) working days after the letters of reprimand last. class = s120 > 13. The provisions of article 34 amended to read as follows: article 34 banks that do not implement the provisions as set forth in the regulations of Bank Indonesia and other related implementing provisions may incur administrative sanctions referred to in Section 52 Act No. 7 of 1992 about Banking as amended by Act No. 10 of 1998 and section 58 of the Act Number 21 of 2008 about Islamic banking among others in the form of: a. a written reprimand;

b. decrease in the level of health of the Bank;

c. freezing of certain business activities;
d. the inclusion of members of the Executive Board, a Bank employee, and/or shareholders in the list of parties who got the predicate does not pass in the assessment of ability and propriety or in the administration of the Bank Indonesia stipulated in the provisions of Bank Indonesia; and/or e. dismissal of the Executive Board of the Bank.

14. The provisions of article 35 amended to read as follows: article 35 (1) the provisions on the application of risk management for the Bank is controlled by Bank Indonesia circular letter.
(2) with the introduction of the regulation of Bank Indonesia, the Bank is obliged to adjust operational guidelines related to the application of risk management.
(3) the arrangements concerning risk management for the entire risk as referred to in article 4 paragraph (2) and the determination of the Risk rating for Conventional commercial banks which are categorized in 5 (five) rank as referred to in article 8 d of the regulation of Bank Indonesia is effective as of July 1, 2010.
(4) the arrangements concerning risk management as referred to in article 4 paragraph (2) and paragraph (3) PBI No. 5/8/PBI/2003 on the application of risk management For commercial banks, as well as the determination of the Risk rating of the conventional commercial banks that are categorized in 3 (three) rank as referred to in article 8 d PBI No. 5/8/PBI/2003 on the application of risk management For commercial banks remain valid until June 30, 2010.
15. Between Article 35 and article 36 pasted one article, namely Article 35A to read as follows: article 35A (1) Provisions as set forth in article 20, article 21, article 25 and article 26, paragraph (2) and paragraph (3) does not apply to commercial banks.
(2) with the introduction of the regulation of Bank Indonesia, this settings in terms of the implementation of the risk management associated with that conflict with settings in the regulation of Bank Indonesia was declared not applicable and must follow the settings in the regulation of Bank Indonesia.
Article II of the regulation of Bank Indonesia began to take effect on the date set.

In order to make everyone aware of it, ordered the Bank Indonesia Regulations enactment this by its placement in the State Gazette of the Republic of Indonesia.

Established in Jakarta on July 1, 2009 caretaker GOVERNOR of BANK INDONESIA MIRANDA S GOELTOM. Enacted in Jakarta on July 1, 2009 the MINISTER of LAW and HUMAN RIGHTS REPUBLIC of INDONESIA MATTOANGIN fnFooter ();