OJK drafting minimum capital requirement for digital banks

Jakarta The Financial Services Authority (OJK) is formulating regulations on the establishment of digital banks, which include a minimum capital requirement of up to Rp10 trillion.

“For the establishment of a new digital bank, the requirement is Rp10 trillion. Accompanied by digital bank requirements such as having the ability to manage prudent and sustainable bank business, protection of customer data,” executive director of banking research and regulation at OJK, Anung Herlianto, said during an online press conference in Jakarta on Thursday.

The provisions regarding digital banks are currently still at the early drafting stage, he added. OJK will consult with industry players to finalize the regulations, he said.

He also said he has received a number of inputs from the public, so the minimum capital requirement may change at a later date.

The establishment of a digital bank can be divided into two types, he informed. The first involves setting up a new entity that fully operates as a digital bank. The second involves transforming an already operational conventional bank into a digital bank.

The Indonesian banking industry has recently switched to digital banking, Herlianto noted. The largest private bank in the country, PT Bank Central Asia Tbk, has acquired Bank Royal to form a digital bank. There are PT Bank Jago Tbk and digital transformation plans of Singapore company Sea Group, which recently acquired Bank of Economic Welfare (BKE), he added.

“From existing to digital, it must have a realistic business model as well as understanding of risk mitigation and management to anticipate risks, including cyber crime, protection of customer data. Directors who are competent in the IT field are also considered,” Herlianto said.

Meanwhile, chief executive of banking supervision at OJK, Heru Kristiyana, said regulations on digital banks are still being discussed. He said he hopes the draft of the regulation can be completed soon.

“We are addressing things like that (new regulations) and of course we will issue them. My hope is that we can arrange it in the near future,” Heru said.

 

 

Source: Antara News

 

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