Forex transactions must be reported
Forex transactions must be reported
JAKARTA (JP): Commercial banks will be required from March 1
to submit monthly reports to the central bank on their foreign
exchange transactions, Bank Indonesia deputy governor Achjar
Iljas said on Wednesday.
He argued the requirement was a measure to provide Bank
Indonesia with accurate, comprehensive and timely data on foreign
exchange transactions to allow the central bank to devise better
monetary policies.
"This has nothing to do with forex control. This is simply a
measure to collect better data on foreign exchange flows so that
we can design better policies," he said.
The reporting requirements were contained in Bank Indonesia
regulation No. 1/9/PBI/1999 dated Oct. 28 and Bank Indonesia
circular letter No. 1/9/DSM/1999 dated Dec. 28.
The rules implement Law No. 24/1999 on the compulsory
reporting of foreign exchange transactions, which was enacted
last April.
Achjar said the regulations stipulated the banks must report
all forex transactions both on their behalf and on behalf of
their customers that affected the position of their foreign
assets and obligations.
Transactions which must be reported include transfers of
either foreign exchange or rupiah into Indonesia or abroad,
transfers of either foreign exchange or rupiah to or from non-
Indonesian residents in the country, and all transactions
involving foreign exchange, including bank notes, traveler's
checks and export drafts.
The banks are also required to report the position of their
foreign assets and obligations to nonresidents, denominated
either in foreign exchanges or rupiah, both in Indonesia and
overseas.
In the report, banks must report in detail individual
transactions of US$10,000 or more, including the amount and type
of the transactions, the purpose, plus explanations about
relations among the counter parties.
"However, the identity of the parties, their names and
addresses, are not required to be reported. We don't need that
data to design monetary policies," Achjar said.
Nevertheless, he said if the central bank found suspicious
transactions, it could still trace the transactions through the
reporting institutions.
Penalties
Transactions below $10,000 could be reported in a lump sum.
The banks' head offices are required to file monthly forex
transaction reports to the central bank for the preceding month.
Achjar said banks failing to comply with the ruling would risk
incurring penalties.
Under the ruling, a delay in the reporting is liable to a
penalty of Rp 5 million per day.
Banks which do not report their forex transactions risk a
penalty of Rp 100 million, plus the daily penalty.
The ruling also stipulates that banks which do not report
correctly or completely would be sanctioned with a penalty of Rp
100 million.
A bank which fails to report its forex transactions for six
consecutive periods, or a maximum of six months, would risk the
suspension of its license.
Achjar acknowledged that the central bank was still
determining the reporting requirement for forex transactions
conducted through nonbanking financial institutions and others.
He said the central bank required commercial banks first to
report forex transactions because they covered some 80 percent of
all forex transactions in the country.
Nonbanking financial institutions account for some 10 percent
of all forex transactions.
Achjar vowed the central bank would soon implement the
reporting requirement for nonbanking institutions.
"We will issue within the next two month to three-month period
a regulation requiring nonbanking financial institutions to
report forex transactions."
However, Achjar could not provide a specific date on when the
regulation would be released. (rid)