Bank’s minimum capital requirements and multiple licensing

The Indonesian central bank, Bank Indonesia, has recently issued two regulations that in the future will change how banks in Indonesia do their businesses. The two regulations relate to banks business activities with their capital. As a result of these two regulations, a commercial that may conduct any kind of businesses in the past under Law No. 7/1992 regarding Banking (as amended) will in the future only be able to conduct businesses in accordance with its capital strength. These two regulations are: (i) Bank Indonesia Regulation No. 14/26/PBI/2012 regarding Bank Business Activities and Office Networks Based on Core Capital dated 27 September 2012 (‘BIR 14/26’); and (ii) Bank Indonesia Regulation No. 14/18/PBI/2012 regarding Minimum Capital Adequacy Requirement For Commercial Banks dated 28 November 2012 (‘BIR 14/18’).