Regulation on Minimum Capital Requirement for Commercial Banks revised

In an attempt to increase a bank's ability to absorb risks, the improvement of a bank's capital quality and quantity to be in accordance with international standards is deemed necessary. In order to increase a bank's capital quality, it is also considered necessary for the bank to have additional capital which will have the function as a buffer in the event of a financial and economic crisis which may negatively affect the stability of the financial system. For this purpose, on 12 December 2013, Bank Indonesia issued Regulation No. 15/12/PBI/2013 on Mandatory Minimum Capital Requirements for Commercial Banks to amend the provisions regarding the requirements for commercial banks and the representative offices of foreign commercial banks in holding certain funds depending on the risk profile of each bank. Similar to the previous regulation (i.e. PBI Regulation No. 14/18/PBI/2012) this regulation also requires the minimum capital requirement to be determined based on a