OJK Accelerates Consolidation of Rural Banks and Sharia Rural Banks, Prepares Capital Classification

JAKARTA — The Financial Services Authority (OJK) is continuing its agenda to strengthen the rural banking industry (BPR) and Sharia rural banks (BPRS) through accelerated institutional consolidation and the restructuring of capital frameworks. This effort is aimed at improving the resilience and competitiveness of the industry, while supporting the intermediation role of BPR in financing micro and small businesses in the regions. OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, stated that the regulator is currently drafting new regulations on BPR/BPRS capital. “OJK is currently preparing regulations on BPR/S capital as an effort to strengthen the BPR/S industry in accordance with the Roadmap for the Development and Strengthening of the BPR/S Industry (RP2B) which was launched in 2024. These capital regulations for BPR/S will subsequently serve as the basis for preparing the classification of BPR, which is currently still in the process of in-depth review,” said Dian in a written response to the OJK Board of Commissioners Meeting, quoted on Wednesday (18/3/2026). According to her, OJK continuously monitors the implementation of the roadmap, including efforts to strengthen the industry structure through consolidation and increasing the capital capacity of these small-scale financial institutions. In line with the industry strengthening policy, the trend of declining numbers of BPR and BPRS continues in 2026. “OJK observes that the trend of declining BPR numbers continues in 2026 in line with the implementation of BPR consolidation under the same ownership through mergers or business absorptions, or the revocation of business licences, either through self-liquidation or due to entering Bank in Resolution (BDR) status,” said Dian. As of 11 March 2026, 142 BPR and BPRS have effectively consolidated into 50 entities. In addition, there are 22 BPR/S that will become six entities still in process at the Ministry of Law. Meanwhile, 242 other BPR/S are still in the consolidation process at OJK. Through these regulations, OJK mandates that BPR or BPR Syariah under the same controlling shareholder ownership or control within one main island or archipelago region must undergo mergers or business absorptions. The consolidation implementation deadline is set at a maximum of two years for private BPR and up to three years for regional government-owned BPR. Each BPR/BPRS is required to submit an action plan to OJK, which will then monitor its realisation. To support the implementation of the single presence policy (SPP), OJK has also sent letters to regional governments to encourage consolidation and synergy among regional financial institutions, including BPR, BPRS, and regional development banks (BPD), as stated in the industry strengthening roadmap.