OJK Amends Provision on the Restriction of the Granting of Credit and Financing for Land Procurement and Land Tillage

The Financial Services Authority (Otoritas Jasa Keuangan/OJK) has issued Regulation (“ Amendment ”) which amends Regulation on Restrictions on the Granting of Credit or Financing by Commercial Banks for Land Procurement and/or Land Tillage (“ Regulation 44/2017 ”).The Amendment has been issued in order to bolster the development of the housing sector and the banking intermediation function by making adjustments to various restrictions which are in place regarding the granting of credit/financing for land procurement and/or land tillage purposes. [1] As a general rule, commercial and sharia banks (“ Banks ”) are prohibited from granting credit/financing to developers (either directly or indirectly) and/or from purchasing/guaranteeing securities (including sharia securities) from developers for the purposes of land procurement and/or land tillage. [2] However, the following activities are exempted from the abovementioned prohibitions: [3]