Statutory Reserve Requirement Fulfillment Calculations for the Banking Sector

With the ultimate goal of improving the effectiveness of Indonesia’s monetary policy in order to maintain economic stability, [1] Bank Indonesia (“ BI ”) has issued Regulation of the Bank Indonesia Board of Governors No. 20/10/PADG/2018 on Statutory Reserve Requirements in Rupiah and Foreign Currencies for Conventional Banks, Sharia Banks and Sharia Business Units (“ Regulation 10/2018 ”).In essence, Regulation 20/2018 sets out a number of guidelines which address the statutory reserve requirements (Giro Wajib Minimum –“ GWM ”) that must be met by conventional banks (“ Banks ”), sharia banks (Bank Umum Syariah– “ BUS ”) and Sharia Business Units (Unit Usaha Syariah– “ UUS ”). However, for the purpose of concision, this edition of Indonesian Legal Brief will confine its discussion to the following matters: