Bank Indonesia Regulation Concerning the Emergency Financing Facility

This regulation stipulates terms for the emergency financing facility (EFF) of commercial banks in Indonesia.

The document states that:

• Banks may experience liquidity difficulties endangering their survival and generating systemic impact that could jeopardize the stability of the financial system;
• In such a case, Bank Indonesia (BI), in its capacity as lender of the last resort, may provide emergency financing capital to commercial banks;
• The funding would be provided at the expense of the Government.

The regulation begins with general provisions that explain the meaning of the terminology that it uses.

The regulation sets out terms for:

• The conduct of the bank and the maintenance of adequate liquidity;
• Liquidity difficulties and the application for EFF;
• The written application for the EFF and the necessary documentation;
• The meeting between the Finance Minister and the Governor of the BI to discuss the resolution of the financial problem of the bank;
• The ceiling of the EFF and the EFF collateral,;
• The EFF loan agreement and the disbursement of EFF;
• Expenses for provision of EFF;
• Maturity and payment of the EFF;
• Supervision;
• Submission of application and reports;
• Sanctions.