OJK Considers Lowering the Minimum Core Capital Requirement for Bullion Business

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is considering a review of the minimum core capital requirement for entities conducting bullion business activities. Agusman, Chief Executive of Supervision for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions (“KE PVML”) at OJK, explained that bullion business activities are currently governed by Regulation of the Financial Services Authority No. 17 of 2024 on the Implementation of Bullion Business Activities (“POJK 17/2024”). Under the regulation, a Financial Services Institution (Lembaga Jasa Keuangan – “LJK”) intending to establish a bullion business must maintain a minimum core capital of IDR 14 trillion. 

"OJK has taken note of feedback from industry stakeholders regarding the need to adjust the capital requirements applicable to bullion business operators. These proposals require further assessment, including an evaluation of opportunities for broader participation by other business actors, including private pawnshops," Agusman said.

OJK aims to broaden market access by enabling more business actors, including private pawnshop companies, to participate in the bullion business. The proposed adjustment is expected to encourage greater industry participation, particularly by allowing private pawnshops to enter the bullion market without being constrained by an excessively high minimum capital threshold.

"We are still conducting further assessment to ensure an appropriate balance between facilitating business access and maintaining the stability of the financial system," he added.