BPR Capital Revamped: Tighter Deductions and Strict Six-Month Recovery Timeline Introduced for Minimum Core Capital Shortfalls

The Board of Commissioners of the Financial Services Authority (Otoritas Jasa Keuangan– “ OJK ”) has issued Regulation No. 7 of 2026 (“ Regulation 7/2026 ”) on Minimum Capital Adequacy Requirements and the Fulfillment of Minimum Core Capital for Rural Banks (Bank Perekonomian Rakyat– “ BPR ”). This new framework has resulted in the revocation of Regulation of the OJK No. 5/POJK.03/2015 (“ Regulation 5/2015 ”). Regulation 7/2026 now mandates that all BPR should strictly maintain a minimum core capital level of Rp. 6 billion and a capital adequacy ratio of at least 12%. Accordingly, BPR should now recalibrate their equity structures to account for new capital deduction factors, including deferred taxes and impairment loss shortfalls.