OJK to Boost Banks' Core Capital

Summary

The Financial Services Authority (OJK) plans to hoist the minimum core capital for the banking sector, targeting to publish the regulation by the end of this year. However, the financial watchdog refused to disclose the details related to the minimum core capital that banks must provide later. OJK’s Deputy Commissioner for Banking Supervision III Slamet Edy Purnomo said on Monday (1/13) said a review had mentioned figures somewhere around Rp 3 trillion, increased from the current core capital requirement of less than Rp 1 trillion for banks in BUKU I category.

The fulfillment of the minimum core capital requirement for banks will be carried out gradually over at least three years to ease banks’ burden. In the initial stage, OJK will focus on increasing the core capital of small banks in the BUKU I category. The regulator assumes that the competitiveness of Indonesian banks, especially small banks, will increase with stronger capital. At present, OJK noted 17 conventional and sharia banks with core capital of under Rp 1 trillion.

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