OJK Sets Direction for Bank Business via New Risk-Based Regulation
Amidst steadily rising credit growth, the Financial Services Authority (OJK) has issued new regulations demanding that banks formulate their business plans with a greater focus on risk management. The regulator has also added provisions regarding the management of country risk and transfer risk for commercial banks.
This policy was announced by OJK’s Chief Executive of Banking Supervision, Dian Ediana Rae, during a press conference for the monthly Board of Commissioners Meeting held online on Monday (5/10/2026).
Dian explained that OJK is undertaking several policy steps to strengthen the banking sector. First, POJK Number 17 of 2026 concerning the Business Plan of Commercial Banks. This regulation strengthens the formulation of bank business plans (RBB) based on risk, aligns business plans with bank strategies, and regulates the scope of the business plan’s content.
Second, the Regulation of the Member of the Board of Commissioners (PADK) Number 10 of 2026 regarding the application of country risk and transfer risk for commercial banks. This PADK was drafted in accordance with the mandates for risk management implementation and the corporate governance of commercial banks.
In general, country risk refers to the potential for bank losses due to exposure to parties in a specific country affected by that country’s economic, political, or social conditions. Transfer risk is the risk incurred when an overseas debtor is unable to remit foreign exchange funds due to restrictions imposed by their home country.
The timing of these regulations is noteworthy. In August 2026, banking credit grew by 13.65% year-on-year to Rp9,178 trillion, continuing an acceleration from 13.58% in July and 9.49% in March. Investment credit grew by 25.11% yoy, and corporate credit by 22.18% yoy. Conversely, MSME credit grew by only 2.38% yoy.
While asset quality remains stable, with a gross NPL of 2.11% and an LAR of 8.56%, the Return on Assets (ROA) for banks decreased to 2.43%, and the NPL crept up slightly from 2.09% in June. With the risk-based business plans, bank expansion is expected to remain aligned with capital capacity and risk profiles.
Discussions regarding the business plan regulations have actually been ongoing since April. At that time, OJK prepared a revision of POJK Number 5/POJK.03/2016 concerning Business Plans, which was linked to the push for banks to participate more actively in government priority programmes. The Chair of the OJK Board of Commissioners, Friderica Widyasari Dewi, mentioned programmes such as Free Nutritious Meals, the three million houses programme, and the Red and White Village Cooperatives, emphasising that all must remain consistent with the bank’s risk management and risk appetite. Dian noted at the time that including government programme credit in the business plan is not mandatory, and bank credit decisions remain based on business judgement as banks manage public funds. In May, Kiki targeted the completion of the regulation revision by the third quarter of 2026.