OJK Prepares Minimum ILAAP Standards According to Each Bank's Risk

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) will soon issue minimum standards related to prudential conduct in the Internal Liquidity Adequacy Assessment Process (“ILAAP”). Acting Head of the OJK Banking Regulation and Development Department, Indah Iramadhini explained that the provisions were made as part of strengthening risk management by taking into account the adequacy of liquidity in various scenarios faced by banks.

“For liquidity, we already have the Coverage Ratio and Net Stable Finding. But they are all the same 100%. Well, the ILAAP must be adjusted to the conditions of each bank,” Indah explained to Hukumonline.

The regulation will later be issued in the form of a Circular of the OJK as the implementing agency of Regulation of the OJK No. 19 of 2024 on the Amendment to Regulation of the OJK No. 42/POJK.03/2015 on the Obligation to Fulfill the Liquidity Coverage Ratio (“LCR”) for Commercial Banks (collectively referred to as “POJK 42/2015”). It is known that the current banking liquidity condition is still in a fairly well-maintained condition with the LCR ratio at 204.77%.

“It should be issued in the near future,” she concluded.