New Rules in Force, These Banks Face Operational Shutdown
The Financial Services Authority (OJK) has officially tightened capital regulations for Rural Banks (BPR) through OJK Regulation (POJK) Number 7 of 2026.
Effective from 30 June 2026, the regulation requires BPRs to maintain a minimum core capital of Rp6 billion, with the threat of heavy sanctions or limitations on business activities for non-compliant banks.
OJK Executive Head of Banking Supervision, Dian Ediana Rae, stated that this policy was issued to strengthen the competitiveness of the BPR industry by improving capital quality. “Through strong capitalisation, it is expected that BPRs can increase their competitiveness, perform their intermediary functions effectively, and absorb risks arising from their operational activities,” Dian said in a written statement.
According to Dian, capital strengthening is expected to provide BPRs with greater economies of scale, enabling them to survive amidst increasingly intense competition within the banking industry. This new rule also aligns capital provisions with recent regulatory developments and current accounting standards.
POJK Number 7 of 2026 replaces POJK Number 5/POJK.03/2015. In this latest policy, the OJK provides several options for BPRs to meet the minimum core capital requirement, including through additional paid-in capital or capital contributions in the form of fixed assets, such as land and buildings, that meet the necessary criteria.
Furthermore, the regulator has provided relaxation in the form of extended deadlines for completing the administrative requirements for increasing paid-in capital. The OJK has also updated capital components by including the surplus balance of fixed asset revaluations as part of the core capital.
On the other hand, the OJK has clarified the enforcement mechanism against BPRs that have not met the minimum core capital obligation. Based on Article 24 of POJK Number 7 of 2026, BPRs that have never met the minimum core capital of Rp6 billion before this regulation came into effect will be subject to immediate administrative sanctions as regulated in Article 17.
Meanwhile, Article 25 stipulates that BPRs that previously met the Rp6 billion minimum core capital but subsequently saw their capital fall below this threshold must restore their core capital to the minimum level of Rp6 billion within a maximum period of six months. The deadline calculation begins from the submission of monthly periodic reports to the OJK or from the minutes of OJK inspection results showing that core capital is below the requirement.
If these obligations are not met by the specified deadline, BPRs will face administrative sanctions. These sanctions include not only written warnings but can also involve the temporary suspension of certain operational activities, prohibitions on business expansion, bans on collecting new funds and disbursing new credit, prohibitions on dividend distribution, and restrictions on providing allowances or facilities to commissioners, directors, and executive officers.
With the implementation of POJK Number 7 of 2026, the OJK hopes that all BPRs will promptly strengthen their capital structures to remain compliant with regulatory requirements, maintain business resilience, and perform their intermediary functions optimally within the national banking sector.