New Risk-Management Provision for Rural Banks

The Financial Services Authority (“OJK”) has issued Regulation No. 13/POJK.03/2015 on the Implementation of Risk Management for Rural Banks (“2015 Regulation”). The 2015 Regulation sets out a new risk-management procedure for rural banks with the ultimate aim in mind of empowering and developing the reputation of rural banks.The 2015 Regulation is of relevance to all rural banks across Indonesia.Risk ManagementRural banks are now required to implement risk-management programs by identifying, measuring, supervising, and controlling any possible risks which may arise in the course of their normal business operations. [1] Such risk-management programs must comprise of the following elements at the least: [2]