New banking regulation introduced<\/p>\n
JAKARTA (JP): Bank Indonesia, the central bank, yesterday
\nenforced a new ruling on the uniform practice for documentary
\ncredits imposed on local trading activities as part of the
\ngovernment's effort to accelerate non-oil and gas exports.<\/p>\n
\"The new ruling, which has just been completed today
\n(yesterday), should be seen as a concerted part of the new
\nderegulatory measures which were introduced by the government
\nlast week,\" Bank Indonesia Governor Soedradjad Djiwandono told
\nreporters at a briefing at the central bank's headquarters here
\nyesterday.<\/p>\n
The ruling authorizes banks to make payments to third parties
\nwhich usually act as suppliers of goods at the behest of
\napplicants who act as buyers of goods in the transactions, he
\nexplained.<\/p>\n
\"The documentary credit scheme is actually the same as that
\nintroduced by the Paris-based International Chamber of Commerce
\nlast year,\" he said. That involved a new payment scheme, called
\nthe Uniform Customs and Practice for Documentary Credits, which
\nrequired traders to use the code for their export and import
\nactivities. The new code, popularly known as UCP-500, took effect
\nin January this year.<\/p>\n
\"But the core of our decree is to standardize the system of
\npayment to be used by local traders for their transactions,\"
\nSoedradjad said, adding that the central bank thus far adjusted
\nthe UCP-500 code in line with the country's business climate.<\/p>\n
With the new ruling, applicants can instruct the banks to
\nissue letters of credit (L\/C) in either rupiah or foreign
\ncurrency, he said.<\/p>\n
\"But, the L\/C payment in foreign currencies is only permitted
\nfor foreign exchange banks, while L\/C payments in rupiah can be
\nhandled by any bank,\" he added.<\/p>\n
\"Like the UCP-500 scheme, the local documentary credit is
\nirrevocable, meaning that the credit cannot be canceled or
\namended without the permission of all parties involved,\" he said.<\/p>\n
Bill of lading<\/p>\n
He said that the shipment of goods, which also requires a bill
\nof lading,covering port-to-port shipments through any couriers or
\nshippers, is subject to negotiations between buyers and
\nsuppliers.<\/p>\n
Documentary studies on the shipment should be made by the
\nbanks, which are responsible for the payment, within seven days
\nafter receiving the bill of lading, the governor said, adding
\nthat the new decree only applies to the trade of goods and not
\nfor transaction of services.<\/p>\n
\"Service transactions can be thus far covered by the existing
\nprocedures,\" he added.<\/p>\n
Like UCP-500, the banks will also accept an insurance document
\nwhich contains all risk notations or clauses, he said.<\/p>\n
\"For the purpose, the central bank has instructed all related
\nministries and institutions, such as the ministries of
\ntransportation, tourism, post and telecommunications, and finance
\nto realign their provisions which are expected to facilitate the
\nimplementation of the local documentary credit scheme,\" he
\npointed out.<\/p>\n
\"You can see that the new ruling on documentary credit will
\nhelp facilitate not only the delivery of goods, but also payments
\nto suppliers, who are always vulnerable to delays of payment,\" he
\nadded.<\/p>\n
He noted that suppliers, most of whom are small-scale
\nproducers, received payment three months after delivery. \"With
\nthe new scheme, they can receive the money as soon as they
\ncomplete the shipment,\" he added.<\/p>\n
According to Soedradjad, the decree will therefore help speed
\nup the country's exports, since most products exported are
\nsupplied by manufacturers located on distant islands.<\/p>\n
The central bank will soon introduce the new payment scheme to
\nbankers, entrepreneurs, exporters and importers so that they are
\nprepared to enforce the new 23-chapter ruling, Soedradjad said.<\/p>\n
\"Thanks anyway to some buyers and banks, which have thus far
\ntapped the documentary credit scheme, for their payments to local
\ntrade,\" he said. (fhp)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-banking-regulation-introduced-1447893297",
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