INDONESIA - BANKING - BI to Apply Minimum Down Payment Regulation to Islamic Banks

www.bisnis.com - JAKARTA: After a minimum down payment credit policy applied to conventional banks and multifinance since mid-June, Bank Indonesia will ensure to apply similar regulation to Islamic banking.

Bank Indonesia (BI) Islamic Banking Department Executive Director Edy Setiadi said the preparation of minimum down payment regulation for Islamic Bank needs more time because this type of bank has limited data resources compared to conventional banks.

"The principle is BI also has to make similar regulation for Islamic banks," he said yesterday (8/13).  (source)

INDONESIA - REGULATIONS - BI: Bank Syariah Not Treated Special

www.bisnis.com - JAKARTA: Bank Indonesia said it was reviewing the amount of loan to value for the rule of Islamic banking.

Governor of Bank Indonesia (BI) Nasution said the provisions of loan to value (LTV) sharia should not be treated differently from the conventional banking regulations.

"Yes, it should be one of the main reasons it is actually that there be no arbitrage, do not then there is a difference. Should have the same direction. However, whether the latter [the amount] exactly the same, or how, we'll examine is," he said after a ceremony Aug. 17 in the BI, today (17/08/2012).  (source)

INDONESIA - REGULATONS - BANK INDONESIA to issue new loan to value ratio for Islamic Banks

www.bisnis.com - JAKARTA: Bank Indonesia will release a regulation to limit ratio of credit value that bank can be provided to maximum collateral. The regulation will be imposed to Islamic Banking industry as part of microprudential policy.

Loan to value ratio might be applicable this year, said Executive Director of Bank Indonesia's Islamic Banking Department Edy Setiadi.

"Since the first rule was out for a conventional bank, BI principle should also be set up for Islamic banks however time and date are still unclear," he said on Monday (8/13/2012).  (source)

INDONESIA - BANKING - Shariah Included in Indonesian Bank Rule

www.thejakartaglobe.com - The country’s central bank will soon issue a regulation requiring Shariah banks to toughen down payments on housing and automotive loans, a deputy governor said on Sunday.

The requirement will be similar to the implementation of the loan-to-value level applied to conventional lenders for housing and vehicle loans issued on March 15 and took effect on June 15.

Under the new regulation, down payments of 25 percent for two-wheeled vehicles are required and 30 percent for four-wheeled vehicles. There were no rules before, but sellers often asked for about 15 percent. Loans typically account for 70 percent of car purchases in Indonesia.

Shariah lenders were excluded from the regulation as in Islamic finance, lending does not require down payments.   (source)

INDONESIA - BANKING - Foreign Banks Facing Paid-Up Capital Rule From Indonesian Government

www.thejakartaglobe.com -The central bank plans to impose a regulation on foreign lenders operating branch offices here that will require them to meet a similar minimum paid-up capital sum that locally incorporated lenders must pay.

Indonesia allows foreign lenders to operate branch offices here without establishing a locally incorporated company, a policy often criticized by local lenders as paving the way for unfair competition and increased risk for Indonesian deposit holders.

Halim Alamsyah, a deputy governor at Bank Indonesia, said the minimum paid-up capital requirement for local banks — currently set at Rp 3 trillion ($318 million) for the establishment of a new conventional bank — would be applied in some form to foreign branch operators as well.  (source)

INDONESIA - CAPITAL MARKETS - Small issuance, new regulations

www.ibpa.co.id - JAKARTA. Aka Islamic sukuk issuance in 2012 also continued to grow. Citing data from the Capital Market and Financial Institutions Supervisory Agency (Bapepam LK), sukuk issued until late July, a total of 52 products, with a value of Rp 9.39 trillion emissions.

A total of 37 new products were classified as ijara sukuk. While the rest is kind of mudaraba sukuk. Etty Retno Wulandari, Bureau Chief Accounting Standards and Disclosure of Bapepam-LK, said that so far this year reached Rp 1.47 trillion.  (source)

INDONESIA - REGULATIONS - OJK Shariah Committee at the level of Commissioners

WWW.REPUBLIKA.CO.ID, JAKARTA - The Committee to integrate Islamic sharia units in each commissioner shall be at the same level with the commissioner. It is intended that sharia be the same priority as other conventional financial institutions.

Deputy Treasurer of the Indonesian Ulema Council (MUI), Nadratuzzaman Hosen, said although sharia is not mentioned in the OJK law, this system still can not be forgotten. By establishing a unit in each directorate and the integrating committee, will continue to develop sharia assessed.

"OJK could establish its own policy on a proposal by the commissioner," said Hosen, Wednesday (8/8).  (source)

INDONESIA - FINANCE - DP hit, move to sharia financing FIF

www.kontan.co.id - JAKARTA. PT Federal International Finance (FIF) is planning to increase the share of contribution of Islamic finance in the second semester. If throughout the first half ago, the composition of Islamic finance in the new FIF 10%, then in the second semester, FIF target of Islamic finance contributing 50% of the total value of financing.
Suhartono, Director of FIF admitted it lost market share with a DP below 10% when the market demand for a down payment (DP) is still relatively high cost. Do not want to finance the motor continues to decline, then change the composition of the FIF 50% financing from conventional and 50% of the sharia. Of the target unit motorcycle financing as much as 560 000 units, nearly half are from Islamic.
"The demand for cheap DP FIF is still high at almost 30%. Therefore we provide a choice for Islamic finance," said Suhartono last night, Tuesday (31/7).  (source)

INDONESIA - FINANCE- After downpayment regulation, Multi Finance became backbone of Islamic finance

www.kontan.co.id - JAKARTA. After the enactment of the rules of deposit or down payment (DP) in multi-vehicle loans by 20% -25%, the finance company menggeber Islamic services. In fact, the main stronghold of Islamic finance business.

At PT Adira Multifinance (Adira Finance), has a new business unit of sharia (UUS) since mid-June 2012. Nevertheless, only a month to operate a direct channel of financing of about USD 20 billion in loans motorcycles and cars. "Now the new UUS concentrated in Greater Jakarta, but the future will be spread to other areas that could contribute 10% of the company's business," said Willy S. Dharma, Director of Adira Finance, yesterday.  (source)

INDONESIA - BANKING - Maybank Optimistic It Will Maintain Control of BII

www.thejakartaglobe.com - Kuala Lumpur. Malayan Banking is convinced that it will be able to keep its controlling stake in Bank Internasional Indonesia despite the recent change in bank ownership rules in Indonesia.

Maybank, which bought BII in 2008, owns 97.3 percent of Indonesia’s eighth-largest lender.

Last Tuesday, BII reported that it recorded a 61 percent increase in net income during the first half.

Three weeks ago, Indonesia’s central bank issued new rules limiting ownership in domestic banks at 40 percent. However, it said it would allow waivers if the owners were listed banks that maintained high levels of corporate governance and were in sound financial health. (source)

INDONESIA - BANKING - Indonesia to Allow Currency Hedging for Banks: Islamic Finance

www.thejakartaglobe.com - Indonesia will let Shariah-compliant banks hedge against exchange-rate movements to spur growth in Islamic financial assets and narrow the gap with Malaysia’s industry, which is seven times larger.    

Bank Indonesia, the National Shariah Board and the Indonesia Institute of Accountants have approved the instruments, available in Malaysia since 2006, Adiwarman Azwar Karim, Jakarta-based vice chairman of the board’s Islamic capital market working committee, said in an Aug. 3 interview. The central bank said it is working on regulations, declining to say when they would be finished.     (source)

INDONESIA - REGULATIONS - Capital Markets : contract of Istisna and Musharaka

www.bapepam.go.id - PRESS RELEASE - ISSUANCE OF REGULATIONSSUPERVISORY BOARD CAPITAL MARKET AND FINANCIAL INSTITUTIONSOn this day, Wednesday, August 1, 2012, Bapepam-LK issued a regulation is Regulation No. IX.A.14, attachment, and the Chairman LK Number: KEP-430/BL/2012 dated August 1, 2012 of the Agreement, the Agreement Used in the issuance of Islamic securities in the capital market. This regulation is Rule Number IX.A.14 improvements, attachment, and the Chairman LK Number: KEP-131/BL/2006 dated 23 November 2006 concerning the Agreement, the Agreement Used in the issuance of Islamic securities in the capital market.Completion of these regulations, especially related to the addition of contract Musharaka is a new contract and the contract Istishna. It aims to support Islamic Capital Markets industry needs with a wider range of variation of the contract and potential that can be used in the issuance of Islamic securities in the capital market. (source)

INDONESIA - BANKING - OJK Must Keep Developing Islamic Banking

www.investor.co.id - JAKARTA - Economic Observer Indonesian Institute of Sciences (LIPI) Eko Agus said the Financial Services Authority (OJK) as the new financial industry oversight should try to improve the prudential aspects of the Islamic banking business, while maintaining growth in the financial industry."Currently the number of Islamic banking is only about 20 to 30% of total national banking system, so the OJK should keep trying to push the performance of Islamic banking to be able to advance the financial industry, while maintaining the aspect of prudence," he said when contacted here on Tuesday .He said that Indonesia adheres to the dual banking system is a conventional bank and islamic bank, so that the OJK must provide supervision equal portions of both the financial industry is like a Bank Indonesia has done so far.  (full story)

INDONESIA - REGULATIONS - Bank Indonesia’s Ownership Rule May Speed Up Mergers

www.thejakartaglobe.com - Fitch Ratings says the central bank’s new rule on bank ownership will likely expedite banking consolidations but will pose challenges for smaller lenders.

A day after Bank Indonesia announced its new rule to cap the ownership of banks to 40 percent from 99 percent, Fitch said in a report on Thursday that “the risk of failing to maintain the Bank Indonesia criteria may be more pronounced at small- to medium-sized banks facing undue business pressure.”

“This is notably because of a concentrated shareholding structure, especially family-owned, which has been cited as one factor behind bank failures in Indonesia in the past,” the rating agency wrote.

The rule is expected to set a clear platform for future bank acquisitions, as Indonesia has been coaxing its 120 commercials lenders to consolidate through mergers and acquisitions, hoping to help them better compete with regional peers. (source)

INDONESIA - BANKING - OJK Commissioners Officially Installed

www.theindonesiatoday.com - JAKARTA (Indonesia Today) - Supreme Court Chief Hatta Ali has sworn in nine commissioners of Financial Services Authority (OJK) Friday (July 20).

They are Muliaman Hadad as OJK chief, Anny Ratnawati as ex-officio from ministry of finance, and Halim Alamsyah as ex-officio commissioner from Bank Indonesia.
Muliaman Hadad was deputy governor of Bank Indonesia, while Anny Ratnawati is vice minister of finance. Halim is still deputy governor of Bank Indonesia.  (source)

INDONESIA - REGULATIONS - Indonesia's new bank rules may not hit Maybank, CIMB

www.btimes.com.my - KUALA LUMPUR:Indonesia's central bank has issued new rules limiting single ownership in domestic banks at 40 per cent but allows exemptions that could let Malaysia's top two lenders hold on to their controlling stakes in banks there. Bank Indonesia, in a statement on Wednesday, said public-listed financial institutions will be allowed to keep their current ownership structures in Indonesian banks, provided they maintain high levels of corporate governance and financial health, including a tier-1 capital ratio of over six per cent.

From December 2013, those that see their corporate governance and financial health ratings fall to unacceptable levels for three consecutive reporting periods will have to sell their stakes down to the new limit.  (source)

INDONESIA - REGULATONS - Indonesia’s New Bank Ownership Rules Leave Door Open for DBS Deal

www.thejakartaglobe.com - Jakarta/Singapore. Indonesia’s central bank will cap single ownership of domestic banks at 40 percent under new rules but allow exemptions that could pave the way for DBS Group’s $7.2 billion bid for Bank Danamon to proceed.

The long-awaited regulation announced on Wednesday is aimed at preventing lenders in the fast-growing G20 country falling captive to single interests and ensuring a diverse shareholder base to hold management accountable.

But the rules, which come on the back of ownership restrictions on mining companies, have fueled concerns Indonesia is becoming tougher on foreign investment.(source)

INDONESIA - IMF - Country report - Implementation of the IOSCO Objectives and Principles of Securities Regulation

Date:	July 18, 2012
Electronic Access:	Free Full text (PDF file size is 721KB). Use the free Adobe Acrobat Reader to view this PDF file
Series:	Country Report No. 12/189
Subject(s):	Indonesia

INDONESIA - REGULATIONS - BI tightened sanctions fit & proper test Islamic banking

www.kontan.co.id - JAKARTA. Bank Indonesia (BI) issued new rules to tighten sanctions and consequences for those who did not pass the fit and proper test (Fit & Proper Test) Islamic Banking and Sharia.
Beleid 14/6/PBI/2012 a numbered regulation is mentioned, the period of sanctions was not associated with the actions that assessed the impact of the loss or potential loss of Islamic banks, but were associated with the type and frequency of offenses committed. In addition, there is an increase for the period of sanctions that do not comply with the Graduated no consequence.
Assessment is divided into two. Controlling Shareholders (PSP) BI is based on integrity and financial viability for the Controlling Shareholders (PSP). While for the Board of Commissioners, Board of Directors, Director of UUS, Leader of Foreign Bank Representative Office, and Executive Officers of the criterion is integrity, competence and financial reputation.  (source)

INDONESIA - REGULATIONS - Bank Indonesia Spells Out Three Requirements for Bank Ownership

www.thejakartaglobe.com -Bank Indonesia has spelled out three main requirements for investors to be able to own more than 40 percent and up to 90 percent of stakes in banks.

Bank Indonesia deputy governor Halim Alamsyah said in the Bank Indonesia Regulation on Banking Ownership Structures, BI differentiated three categories — ownership of up to 40 percent, up to 30 percent and up to 20 percent.

However, Halim said exceptions were permitted, and investors could have more than 40 percent of the shares in a bank but the central bank would first study how the bank managed itself, whether it was capable and whether there were benefits to the economy.  (source)