On 9 October 2024, the Financial Services Authority issued New Regulation* on financial reporting procedures for banks. The New Regulations aim to strengthen governance and internal controls in banks’ financial reporting processes.

The primary objective of the New Regulation is to ensure that banks’ financial reporting is accurate, transparent, and free from fraud or manipulation. Under the New Regulation, commercial banks must establish a department to prevent fraud and manipulation in relation to their financial reporting by 9 April 2025. Rural banks are subject to specific provisions based on their core capital size. Banks do not need to establish a completely separate department, the function can be integrated with other departments, such as risk management, compliance or anti-fraud.

Non-compliance with these provisions will result in administrative sanctions. Banks may receive written warnings, and commercial banks can face fines of up to Rp 50 billion, while rural banks may be fined up to Rp 100 million.

*Financial Service Authority Regulation Number 15 of 2024 on the Integrity of Bank Financial Reporting.