LPS Issues Regulations on the Allocation of Bank Restructuring Funds

Indonesia Deposit Insurance Corporation (“LPS”) is preparing the Regulation of LPS (“PLPS”) as a technical implementing regulation, following the issuance of Regulation of the Government (“PP”) No. 11 of 2026 on Placement of Funds in Banks and Implementation of Authority in Implementing Banking Restructuring Program by the Deposit Insurance Corporation (“PP 11/2026”). This regulation serves as a new foundation for the LPS to carry out its new mandate of maintaining the stability of the national financial system. 

“This step is intended to ensure the readiness of the regulatory framework for the implementation of the LPS’s duties and functions in the banking sector,” said Chairman of the Board of Commissioners of LPS Chairman Anggito Abimanyu.

The PLPS is expected to provide legal certainty on the mechanisms, procedures, criteria, and risk mitigation in fund placement to avoid moral hazard in the banking sector. Moreover, the LPS is currently pushing for a reduction in bank deposit interest rates to align with the Guarantee Interest Rate (“TBP”).