OJK Regulates Bank Ownership Caps

In a bid to strengthen the banking sector in Indonesia, the Financial Services Authority (“OJK”) has issued Regulation No. 56/POJK.03/2016 on the Ownership of Bank Shares (“Regulation 56/2016”), which sets out a number of provisions addressing ownership structures for both sharia- and conventional-commercial banks (collectively referred to as “Banks”). [1] Previously, this same matter was regulated under Bank Indonesia (“BI”) Regulation No. 14/8/PBI/2012 on the Ownership of Bank Shares (“Regulation 14/2012”). [2] It should be noted that both Regulation 14/2012 and Regulation 56/2016 basically set out similar provisions, with the exception of the authority to regulate and supervise these areas, which has now been changed from BI to the OJK. This transfer of authority was originally mandated under Article 7 and Article 55 (2) of Law No. 21 of 2011 on the OJK.Share Ownership CapsThe OJK stipulates that share ownership caps in Banks should be determined based on the following: [3]