11 Aug 2014
NEW REGULATIONS BY OJK ON GUARANTEE INSTITUTIONS (LEMBAGA PENJAMIN)
Three new regulations were issued in April 2014 by the Indonesian Financial Services Authority (Otoritas JasaKeuangan or "OJK"), being the implementing regulations for Presidential Regulation No. 2 year 2008 regarding Guarantee Institutions ("Regulation No. 2"). The three regulations are as follows:
- OJK Regulation No. 5/POJK.05/2014, regarding Business Licensing and Institutional Structure of Guarantee Institutions.
This regulation among others stipulates a minimum issued and paid-up capital requirement of Rp.100 billion for guarantee institutions with a national scope, and minimum issued and paid-up capital requirement of Rp25 billion for guarantee institutions with provincial scope. It also restricts foreign subscription of the capital to 49% (forty nine percent). Guarantee institutions which have obtained a business license from OJK must commence their business operation at the latest 4 (four) months as of the issue date of the business license.
- OJK Regulation No. 6/POJK.05/2014, regarding Conduct of the Business of Guarantee Institutions.
This regulation stipulates the business activities which may be carried out by a guarantee institution, such as guaranteeing surety bonds, letters of credit and custom bonds, and regulates activities which are prohibited for a guarantee institution, such as providing or receiving loans, unless for the restructuration purposes of micro, small, and medium size enterprises.
- OJK Regulation No. 7/POJK.05/2014 regarding Inspection of Guarantee Institutions.
This regulation No. 7 stipulates guidelines for the inspection of guarantee institutions to ensure that they comply with the requirements and with their obligations. The examination by OJK is to be performed periodically, at least once a year or at any time as needed.
All three regulations have been in effect as of 7 April 2014. (by: Novario Asca Hutagalung)