Bank Indonesia Regulation Concerning Rural Banks

This regulation, governing rural banks (RB) in Indonesia, states that RBs, which are part of the national banking system, need strengthening so that they:

• Become a strong, productive and competitive industry;
• Improve services to micro- and small-scale businesses;

The regulation explains the terms that it uses and then sets out provisions for:

• The legal incorporation of an RB;
• The establishment of an RB and its business activities, its ownership and the minimum capital needed for its establishment;
• The submission of the application for the ‘approval in principle, as well as the approval or rejection of this application;
• The application for the operating license, its approval or rejection and the date from which the RB has to operate once it obtains the license;
• The incorporation of the name of the national bank in front of the name of the RB;
• Ownership and changes in rural bank capital;
• The board of directors, the board of commissioners and executive officers;
• The opening of RB offices, the opening of cash units, outdoor cash services;
• Changing the office address, name and legal incorporation;
• The closure of office;
• The conversion of business;
• Punitive measures in case of the violation of report obligation;
• Various sanctions;
• Transitional provisions;
• Concluding provisions.