The new Financial Services Authority Regulation on the Single Presence Policy in Indonesian Banking was issued in July 2017. The policy aims to ensure that a single entity does not simultaneously hold a controlling interest in more than one bank. Therefore, a controlling shareholder of more than one bank is required to merge or consolidate its controlled banks, establish a bank holding company or establish a holding function.
The Financial Services Authority (OJK) has introduced rules for the employment of expatriates and the transfer of knowledge in the banking sector, pursuant to which it has taken over the supervisory role previously performed by Bank Indonesia. Therefore, in order to employ an expatriate, a bank must now obtain OJK approval and submit reports on its expatriate staff. An expatriate's work permit will be processed by the Ministry of Manpower only after having been approved by the OJK.
New regulations require the banking and finance industries to comply with heightened supervision by financial authorities and will be welcomed by foreign investors and customers concerned with Indonesia's financial stability. Key developments include intensifying reporting obligations for systemically important banks, introducing tiered supervision and raising safeguard measures.
To support the development of a technology-based financial industry in Indonesia, the Financial Services Authority recently issued Regulation 77/POJK01/2016 regarding technology-based fund-lending services. The regulation is designed to protect consumer and national interests, while at the same time provide opportunities for local providers of financial technology to grow and contribute to the national economy.
Bank Indonesia (the Indonesian central bank) has issued a regulation and accompanying circular letter governing the mandatory use of rupiah for all cash and non-cash transactions. In prescribing the mandatory use of rupiah – with certain exemptions and special considerations – the regulation and circular letter apply the territoriality principle that underlies many of Bank Indonesia's other regulations.