OJK to Issue New Regulation on Minimum Capital Requirements for BPR

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently refining the regulation concerning the minimum capital requirement for Rural Banks (Bank Perkreditan Rakyat – “BPR”). The new regulation will align the definitions of core capital and supplementary capital with the latest standards and the BPR classification under Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“P2SK Law”).

“OJK consistently encourages and supports BPR to undertake corporate actions, including providing flexibility in sources of capital, such as land and buildings,” stated Dian Ediana Rae, Chief Executive of Banking Supervision at OJK.

OJK will also update the sanction mechanism for BPR that fails to meet the minimum core capital requirement. This includes improvements to the calculation of Risk-Weighted Assets (Aset Tertimbang Menurut Risiko – “ATMR”) to make it more accurate while remaining applicable to the scale of BPR business operations.

“It is currently under process and is targeted to be completed no later than the end of the first semester of 2026,” he added.