05 Mar 2013
REGULATION ON BANK'S TRANSPARANCY AND PUBLICATION OF BANK'S REPORTS
With the current development of banking products and activities in Indonesia, the demand for transparency of the financial condition and performance of a bank is increasing. Banks are expected to disclose their risk exposures as well as their risk management practices, so that the public and the relevant market can better assess their products and performance. Bank Indonesia addresses the demand by issuing, on 18 October 2012, Regulation No. 14/14/PBI/2012 of 2012 regarding Bank Transparency and Report Publication (“Regulation No. 14/14/2012”).
Generally, Regulation No. 14/14/2012 requires a Bank to:
• issue its financial reports, consisting of:
- Annual Report;
- Quarterly Financial Report;
- Monthly Financial Report;
- Consolidated Financial Report; and
- Other Reports.
• make its reports available for public access. If the Bank has a subsidiary or if the Bank is a part of a group, its consolidated financial report must also be made public.
The Annual Report, other than to the shareholders, must also be submitted to at least:
a. Bank Indonesia;
b. Indonesia Consumer Agency Foundation (Yayasan Lembaga Konsumen Indonesia or “YLKI”);
c. Rating Agencies in Indonesia;
d. Banking Associations in Indonesia;
e. Indonesia Banking Development Agency (Lembaga Pengembangan Perbankan Indonesia or “LPPI”);
f. 2 (two) research agencies in the field of economy and finance;
g. 2 (two) economy and finance magazines.
The submissions must have been completed at the latest 5 (five) months after the end of the fiscal year.
In addition to the above, a Bank is also required to publish its Annual Report on its website and must do so at the latest 1 working day as of the date of the above mentioned submission. The publication of the Annual Report in the website must be maintained for at least 2 respective periods of reporting.
Quarterly Financial Report
Banks are required to publish Quarterly Financial Reports as at the end of each March, June, September and December. In addition, Bank Indonesia can require a Bank to also publish:
a. financial reports for periods other than the above; and/or
b. other information as determined by Bank Indonesia.
The Quarterly Financial Report must be signed by at least 2 Directors of the Bank. For the end of December quarterly report, the Bank must state the name of the public accountant office which audited the Annual Financial Report as well as the name of the accountant who is responsible for the audit and the opinion provided.
The Quarterly Financial Report must be published at least in an Indonesian language daily newspaper which has a wide circulation at the domicile of the Bank. The publication must be made at the latest on:
a. the 15th of the second month after the end of the reporting month, for the the end of March, June and September reports;
b. the 15th of April of the following year, for the end of December report.
Bank Indonesia will announce the Quarterly Published Financial Reports submitted by Banks on Bank Indonesia’s website.
The Quarterly Financial Report must also be published on the website of the Bank concerned. This publication must be done at the latest 1 working day as of the date of the publication of the Quarterly Financial Report in the newspaper, and be maintained on the website for at least 2 respective periods of reporting.
Monthly Financial Report
The Monthly Financial Report must be prepared based on the data of the Commercial Bank Monthly Report (Laporan Bulanan Bank Umum or “LBU”) which has been reclassified by Bank Indonesia based on the Standard Financial Accounting Statement (Pernyataan Standar Akuntansi Keuangan) and Bank Indonesia’s rules. Prior to the publication, BI will send online the reclassified LBU to the Bank through the Headquarters Commercial Bank Monthly Report for examination of the accuracy and for necessary adjustment and information addition for the purpose of the monthly publication.
Bank Indonesia will announce the publication of the Monthly Financial Report which has been sent by the Bank to Bank Indonesia’s website. The announcement by Bank Indonesia will be made at the latest 60 days after the reporting month.
Consolidated Financial Report
A Bank which has a subsidiary or which is a part of a business group must present its Consolidated Financial Report in its Annual Financial Report and Quarterly Financial Report. Bank’s temporary share participations which cause the Bank to become a controlling shareholder are exempted from the Consolidated Financial Report.
The “Other Reports” to be published as meant under this Regulation No. 14/14/2012 consist of:
a. Report on the Credit Base Interest Rate (Suku Bunga Dasar Kredit or “SBDK”); and
b. Other to be published reports.
The above “other to be published reports” must be made periodically. Bank Indonesia is entitled to request Banks to submit other to be published reports as needed. As for SBDK, the publication must be made in a newspaper having a wide circulation at the latest 7 working days after the end of March, June, September and December.
Sanctions for non compliance of the requirements under this regulation range from monetary sanctions and announcement of the names of the non complying bank to written warnings, administrative sanctions and downgrading of the bank’s health rating.
Upon the enactment of this Regulation No. 14/14/2012, articles 1 to 15 and articles 24 to 38 as well as articles 40 to 41 of Bank Indonesia Regulation No. 3/22/PBI/2001 regarding Transparency of Bank’s Financial Condition (“Regulation No.3/22”) are revoked and become invalid. However, its implementing regulations remain to be applicable for as long as they do not contradict the provisions of Regulation No. 14/14/2012. (by: Ammalia Prama Putri)