Laws Governing Indonesian Banks
The banking industry in Indonesia is regulated by Bank Indonesia (BI). It executes numerous monetary policies and ensures the rupiah’s stability.
Law No. 7 of 1992 governs banks in Indonesia, which has since been revised by Law No. 10 of 1998. Law No. 7 was enacted to encourage Islamic banking where commercial and rural banks can both operate on Islamic banking principles under Law No. 10. The monetary policy regulations are governed by Law No. 21 of 2011. It also controls and supervises banking institutions, monitors the solvency of banks, and conducts bank examinations.
The Bureau of Industry and Security (BI) has issued Regulation No. 14/24/PBI/2012, which addresses the Single Presence Policy (SPP). This rule increases the competitiveness of the Indonesian banking industry by improving supervisory standards and streamlining bank ownership.
Indonesian banks are supervised by the Bank of Indonesia (BI) and are required to disclose international loans and foreign currency influxes to the BI. Aside from the BI and the OJK, there are a number of other authorities in Indonesia that are responsible for bank regulation, which are:
Common Violations of Bank Laws in Indonesia
Indonesia’s government has enacted a number of new banking-related regulations and has also begun to prosecute persons who break the new legislation.
Some of the common violations of bank laws in Indonesia include:
1. Exporters who do not keep foreign exchange gains from natural resources in Indonesian banks
Exporters must deposit their foreign exchange gains received from natural resources in Indonesian banks, according to current bank legislation in the country.
2. Carrying large sums of foreign currency while crossing the border
One of Indonesia’s banking rules currently prohibits the importation of foreign currencies on behalf of either Indonesians or foreigners. Some banks have even been accused of exposing depositors’ personal information. Banks are only allowed to reveal customer personal information when a government agency or court orders it.