The ongoing outbreak of the Coronavirus Disease 2019 (“COVID-19”) has disrupted the stability of the financial system and economic growth, which particularly include the performance and capacity of the credit. As a response to this situation, the Financial Service Authority (Otoritas Jasa Keuangan “OJK”) has issued POJK 11/20, as an effort to stimulate the affected debtors, including micro-small-and medium scale enterprises (Usaha Mikro, Kecil dan Menengah ”UMKM”). The policy sets out under POJK 11/20 shall be applied to conventional banks, sharia banks, and rural banks (“Banks”).
The stimulus policy is mainly focused on allowing banks to implement (i) asset quality determination policy and (ii) credit or financing restructuring policy, as a credit relaxation for affected debtors. In addition to such stimulus policy, POJK 11/20 also regulates providing of new credit by bank to its debtors.
The stimulus policy is not mandatory, and it will be based on each of bank’s self-assessment. There have been more than 50 conventional banks that have declared their statement to support the implementation of POJK 11/20. The banks that are implementing this policy must initially have their own guidance before implementing the credit relaxation policy. Implementing guidance of the credit relaxation policy must contain at least: (1) debtor criteria to be determined as the affected party of COVID 19; and (2) sectors affected by COVID 19.
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