Policy

Jakarta, 16 December 2024 – Indonesia Financial Services Authority (OJK) has issued OJK Regulation (POJK) Number 19 of 2024 concerning Liquidity Coverage Ratio (LCR) Requirements for Commercial Banks and POJK Number 20 of 2024 concerning Net Stable Funding Ratio (NSFR) Requirements for Commercial Banks.

POJK 19/2024 is an amendment to POJK 50/POJK.03/2017 concerning NSFR requirements for commercial banks, while POJK 20/2024 is an amendment to POJK 42/POJK.03/2015 concerning Liquidity Coverage Ratio requirements for commercial banks.

These two POJKs are based on the need for banks to maintain strong and adequate liquidity to create a healthy banking system capable of growing and competing both nationally and internationally while aligning with evolving international standards.

In these regulations, OJK recognizes that to assess liquidity adequacy, it is necessary to have liquidity ratios that are equivalent, reliable, and comparable for evaluating the adequacy of the quantity of high-quality financial assets to anticipate net cash outflows.

Furthermore, these POJKs expand the scope of monitoring, calculation, and reporting obligations for LCR and NSFR to apply to all Conventional Commercial Banks (BUK). Previously, BUKs categorized under Core Capital Bank Groups (KBMI) 1, excluding foreign banks, were not subject to LCR and NSFR regulations.

This expansion has been made to strengthen banking liquidity. As a result, there is a need for liquidity ratios that are equivalent, reliable, and comparable across all BUK.

In addition to the scope expansion, the amended POJK on LCR also regulates adjustments to the criteria for High-Quality Liquid Assets (HQLA), reporting procedures, and the framework for obligations related to the Internal Liquidity Adequacy Assessment Process (ILAAP). Meanwhile, the amended POJK on NSFR regulates, among other things, adjustments to Allowance for Impairment Losses (CKPN) that can be included, as well as reporting procedures.

These POJKs are part of OJK's commitment to maintaining prudential principles in the banking sector, particularly in strengthening liquidity resilience. It is expected that these regulations will enhance the banking sector's ability to manage both short-term and long-term liquidity, thereby strengthening its intermediation function and supporting the national economy.

Both POJKs come into effect on the date of enactment.

Click here for OJK Regulation Number 19 of 2024 concerning Liquidity Coverage Ratio (LCR) 

Click here for OJK Regulation Number 20 of 2024 concerning Net Stable Funding Ratio (NSFR) Requirements for Commercial Banks.