BI sets range for forex exchange report
BI sets range for forex exchange report
JAKARTA (JP): Bank Indonesia (BI) deputy governor Achjar Iljas
said on Wednesday the minimum amount of foreign exchange
transactions required to be reported under the newly enacted
foreign exchange monitoring law would be between US$5,000 and
$10,000.
He said the exact amount awaiting the conclusion of an
intensive evaluation by the central bank.
"We are trying to find an amount level which is just
significant enough economically, but not too low as to
operationally burden the institutions who will do the reporting,"
he said.
The foreign exchange monitoring law, enacted in May this year,
and attendant regulations require banks and nonbank financial
institutions in the country to report foreign exchange
transactions to the central bank starting next April.
Achjar said BI was talking with a number of banks to discuss
an appropriate minimum amount level for reporting forex
transactions.
He said a level which was too low would burden banks and other
reporting institutions with administrative work because of the
high volume of transactions.
BI has until April to evaluate and determine the reasonable
minimum amount, Achjar said.
"We are now studying the past forex transaction statistics. We
put a series of hypothetical numbers as the minimum amount and
will see what the volume of the forex transaction report would
turn out to be."
Achjar said the forex monitoring system would mainly provide
the central bank with more accurate and timely statistical data
for the country's balance of payments and the flow of capital
records.
"All these data are used as the basis for BI to make
decisions, particularly on the monetary and banking sector," he
said.
In implementing the forex monitoring law, BI issued Regulation
No. 1/9/1999 on Oct. 28
Banks and nonbank financial institutions must report the
amount and type of transactions, the purpose of transactions, who
ordered the transaction, the name of the counter parties and the
countries where the counter parties are located.
Bank and nonbank financial institutions must also report
rupiah transactions with non-Indonesian residents.
Achjar said institutions failing to comply with the ruling
would risk incurring penalties. He stressed that BI did not
expect to issue the penalties and hoped all parties would report
their forex transactions voluntarily.
According to the ruling, a delay in the reporting is liable to
a penalty of Rp 5 million per day for banks and Rp 1 million per
day for nonbank financial institutions.
Banks which do not report their forex transactions risk a
penalty of Rp 100 million, and Rp 20 million for nonfinancial
institutions, plus a penalty for each day of the delay.
Achjar said BI would not publish individual reports of forex
transactions because they were confidential.
"But an aggregate amount of transactions for all transaction
groups were not confidential and thus will be published by BI
regularly," he said.
The ruling also stipulates that banks which do not report
correct or complete information will be sanctioned with a penalty
of Rp 100 million, and Rp 20 million for nonbank financial
institutions.
The ruling says that a bank which fails to report its forex
transactions for six consecutive periods or a maximum of six
months would risk having its license suspended by the central
bank.
It also stipulates that if a similar omission is committed by
a nonbank financial institution, Bank Indonesia will recommend
its closure.
Another BI deputy governor, Miranda Goeltom, said previously
that the forex transaction reporting system would not discourage
foreign investors from entering the country because it would
lessen Indonesia's risk as the monetary and banking policy design
would be better.
"In the past the risk was higher because investors perceived
that we didn't have good data for policy design," she said. (udi)