EXECUTIVE SUMMARY OF FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 11/POJK.03/2020 CONCERNING NATIONAL ECONOMIC STIMULUS AS A COUNTERCYCLICAL POLICY AGAINST THE SPREAD OF CORONAVIRUS DISEASE 2019 (POJK STIMULUS AGAINST THE SPREAD OF COVID-19)
The development of the spread of coronavirus disease 2019 (COVID-19) has a direct or indirect impact on the performance and capacity of debtors including micro, small and medium business (UMKM) debtors, thus potentially disrupting banking performance and financial system stability that can affect economic growth. Therefore, to encourage the optimization of the banking intermediary function, maintain financial system stability, and support economic growth, an economic stimulus policy is needed as a countercyclical policy against the spread of COVID-19.
The main points of the POJK Stimulus against the spread of COVID-19 include:
a. This POJK applies to Conventional Commercial Banks, Sharia Commercial Banks, Sharia Business Units, Rural Credit Banks, and Sharia People Financing Banks.
b. Banks can implement policies that support economic growth stimulus for debtors affected by the spread of COVID-19, including UMKM debtors, while still observing the precautionary principle.
c. Debtors affected by the spread of COVID-19 including UMKM debtors are debtors who have difficulty fulfilling obligations to the Bank because debtors or debtors’ businesses are affected directly from the spread of COVID-19 either directly or indirectly in the economic sectors including tourism, transportation, hospitality, trade, processing, agriculture and mining.
d. The stimulus policy consists of:
1) Assessment of the quality of credit/financing/other provision of funds based only on the accuracy of principal and/or interest payments for credit/financing/other provision of funds with a ceiling of up to Rp. 10 billion; and
2) Improving the quality of credit/financing to become performing after being restructured during the validity period of POJK. The terms of this restructuring can be applied by the Bank regardless of the credit/financing ceiling limit or type of debtor.
e. The method of credit/financing restructuring is carried out as stipulated in the OJK regulations regarding the assessment of asset quality, including by:
1) decrease in interest rates;
2) extension of the term;
3) reduction of principal arrears;
4) reduction of interest arrears;
5) addition of credit/financing facilities; and / or
6) conversion of credit/financing to Temporary Equity Participation.
f. Banks can provide new credit/financing/other provision of funds to debtors who have received special treatment in accordance with this POJK by the quality of such credit/financing/other provision of funds being determined separately from the quality of the previous credit/financing/other provision of funds.
g. Banks submit periodic reports on the application of this POJK for Supervisor monitoring from the data position at the end of April 2020.
h. This provision applies to debtors affected by the spread of coronavirus disease 2019 (COVID-19) including micro, small and medium business debtors from its enactment until March 31, 2021.