New OJK Regulation for Rural Banks Strengthens Capital, Mitigates Operational Risk

The Financial Services Authority (OJK) has issued OJK Regulation (POJK) Number 7 of 2026 in an effort to encourage the rural bank (BPR) industry to increase competitiveness through capital strengthening. The aim is to achieve economies of scale in facing increasingly tight challenges and competition.

Dian Ediana Rae, Chief Executive of Banking Supervision at OJK, explained that POJK Number 7 of 2026 concerning the Minimum Capital Adequacy Requirement and Minimum Core Capital Fulfilment for BPRs will come into effect on 30 June 2026. This POJK is a refinement of the previous OJK regulation governing capital, namely POJK Number 5/POJK.03/2015.

“Through strong capital, BPRs are expected to increase their competitiveness, perform their intermediary function well, and absorb risks arising from their operational activities,” he said in a statement in Jakarta, quoted on Monday, 6 July 2026.

POJK 7/2026 also aligns with several prevailing statutory provisions and the latest accounting standards applicable to BPRs, including POJK Number 7 of 2024 concerning BPRs and Sharia BPRs, POJK Number 1 of 2024 concerning BPR Asset Quality, and SEOJK Number 21 of 2024 concerning Banking Accounting Guidelines for BPRs.

This POJK regulates the fulfilment of minimum core capital through additional paid-in capital or donated capital in the form of fixed assets, specifically land and buildings, under certain conditions. Furthermore, POJK 7/2026 provides a relaxation of the deadline for completing administrative requirements in fulfilling paid-in capital conditions, as well as adjustments to capital components, including the adjustment of the fixed asset revaluation surplus balance to become a core capital component.

In order to encourage enforcement of the minimum core capital fulfilment for BPRs, this POJK also regulates the refinement of sanctions for BPRs that violate the minimum core capital fulfilment obligation.