New OJK Regulation on Licensing of Guarantee Institutions and Business Operation of Guarantee Institutions

The Financial Services Authority (Otoritas Jasa Keuangan– “ OJK ”) is finalizing two draft regulations of OJK (Rancangan PeraturanOJK –“ RPOJK ”) on the Licensing of Guarantee Institutions and Business Operation of Guarantee Institutions. Ogi Prastomiyono, Chief Executive of Insurance, Guarantee, and Pension Fund Supervision at OJK, confirmed that both RPOJKs will be issued soon.

“Currently, harmonization with the Ministry of Law has been carried out, and the regulations are targeted to be issued in the first quarter of 2025,” said Ogi to Hukumonline.

The substantive points in the RPOJK include increasing equity in existing guarantee companies through the amount of paid-in capital to gradually establish a Guarantee Institution.

In addition, the gearing ratio limit for guarantee companies in the productive business sector will also be relaxed. Previously, each guarantee institution was required to maintain a maximum gearing ratio of 20 times the guarantee institution's capital.

"This RPOJK is expected to strengthen guarantee business activities through improved governance in the implementation of credit guarantees," he concluded.