The Financial Services Authority (OJK) is still reviewing the plan to\nabolish the KBMI 1 (Bank Group Based on Core Capital) category to\nencourage consolidation and strengthen the capitalisation of the\nnational banking industry. It has not yet been confirmed whether this\npolicy will be implemented this year or in a subsequent period.<\/p>\n
OJK Executive Head of Banking Supervision, Dian Ediana Rae, stated\nthat strengthening KBMI 1 banks is a strategic agenda to fortify the\nbanking industry structure and maintain financial sector resilience\namidst global economic dynamics. \u201cOJK views the strengthening of KBMI 1\nbanks as part of a strategic agenda that must be pursued in a directed\nand prudent manner to strengthen the structure and resilience of\nnational banking and support sustainable economic growth,\u201d Dian said in\na statement on Sunday (17\/05\/2026).<\/p>\n
According to Dian, this step is increasingly relevant given the\nacceleration of banking digitalisation, developments in information\ntechnology, global economic uncertainty, and the rising risk of\ncyberattacks, all of which demand that banks possess larger business\nscales and stronger capital.<\/p>\n
OJK assesses that KBMI 1 banks still have room to strengthen their\ncapital and increase their business scale, through both organic growth\nand inorganic measures such as consolidation. OJK previously issued an\nappeal to KBMI 1 banks in October 2025 to conduct a thorough evaluation\nof business performance, asset quality, governance, business models, and\nlong-term prospects.<\/p>\n
\u201cAn inorganic approach through consolidation is necessary to provide\na boost to the performance of banks deemed to be experiencing\nstagnation. This certainly requires honesty and a visionary attitude\nfrom controlling shareholders and bank management to assess future\nperformance prospects in relation to their current capital position,\u201d\nsaid Dian.<\/p>\n
Following this appeal, since December 2025, OJK has invited KBMI 1\nbanks to focus group discussions to draft a roadmap for industry\nstrengthening. Periodic evaluations will be conducted to assess the\neffectiveness of the efforts to strengthen fundamentals and\nconsolidation, which currently remain advisory in nature.<\/p>\n
Dian emphasised that OJK is also preparing an appropriate policy\nframework and mechanism to ensure that capital strengthening occurs in a\nprudent, measurable, and sustainable manner, while considering financial\nsystem stability, customer protection, and the continuity of the\nintermediation function. \u201cTherefore, its implementation will not be\nrushed and will remain in line with the capacity of each bank,\u201d she\nadded.<\/p>\n
Previously, Dian revealed that OJK is encouraging KBMI 1 banks to\nexplore merger options as a step to strengthen economies of scale. She\neven mentioned the plan to abolish the KBMI 1 category within a certain\ntimeframe. \u201cI am currently encouraging KBMI 1 banks to start discussing\nthe possibility of mergers among themselves. Because in a time that may\nnot be too far in the future, I will abolish KBMI 1,\u201d Dian said after\nattending the 2025 Annual Sharia Banking Meeting in Surabaya.<\/p>\n
KBMI is a classification of banks based on the amount of core\ncapital, serving as the primary buffer for absorbing risk and\ndetermining a bank\u2019s business expansion capacity. Based on OJK\nRegulation Number 12\/POJK.03\/2021 concerning Commercial Banks, the KBMI\ncategory consists of four groups: KBMI 1 with core capital up to IDR 6\ntrillion, KBMI 2 from IDR 6 trillion to IDR 14 trillion, KBMI 3 from IDR\n14 trillion to IDR 70 trillion, and KBMI 4 above IDR 70 trillion.<\/p>\n
If the abolition of KBMI 1 is realised, the bank classification\nstructure will be simplified into three groups. KBMI 2 would become KBMI\n1, KBMI 3 would become KBMI 2, and KBMI 4 would become KBMI 3. \u201cSo there\nwill only be KBMI 1, 2, and 3, and no KBMI 4. To be honest, in a country\nas large as ours, regarding economies of scale and other matters, it is\nimpossible not to do this. Therefore, mergers must be carried out,\u201d said\nDian.<\/p>\n
This step is expected to increase the competitiveness of the national\nbanking industry and expand economic financing capacity amidst the\ndemands for efficiency and digital transformation in the financial\nsector.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/ojk-still-reviewing-plan-to-abolish-kbmi-1-category-1780933266", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }