The Financial Services Authority (OJK), under the mandate of Law No. 7 of 1992*, has issued a new regulation** requiring conventional general banks, including foreign bank branches in Indonesia (Banks), to ensure transparency in setting interest rates. The regulation, effective 12 August 2024, requires transparency in disclosing the components of the basic credit interest rate (SBDK), including the cost of funds, overhead costs, and profit margin.
Under this regulation, Banks must prepare the following two types of credit interest rate reports.
- Publication Report:
- The Publication Report should include details such as cost of funds, overhead costs, profit margin, and SBDK.
- This report must be available to the public via the bank’s website, physical offices, and digital or electronic media (if available).
- This report must be updated whenever changes occur.
- Banks must keep these reports for at least five years or progressively build records to meet full compliance by October 2029.
- Details Report:
- The Details Report should include details such as cost of funds, overhead costs, profit margin, SBDK, risk premium estimation, credit interest credit (SBK) and weighted average of SBK realization.
- Banks must submit this report to OJK through its reporting system or offline if the system is unavailable.
- Updates must be submitted monthly.
The obligation to submit these reports begins with data from October 2024. Banks that fail to comply may face administrative sanctions, ranging from written warnings to fines of up to IDR 15 billion.
Banks are advised to prepare for these requirements, as timely compliance will help avoid penalties and build customer trust through improved transparency.
*Law No. 7 of 1992 on Banking, as last amended by Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector.
**Financial Services Authority Regulation No. 13 of 2024 on Transparency and Publication of Basic Credit Interest Rates for Conventional Commercial Banks.
