OJK Tightens Rules for Rural Banks, Capital Below IDR 6 Billion Faces Sanctions
The Financial Services Authority (OJK) has officially issued OJK Regulation (POJK) Number 7 of 2026 concerning Minimum Capital Requirements and Core Capital Fulfilment for Rural Banks (BPR). The new rule tightens capital oversight for BPRs, including the threat of sanctions for banks that fail to meet the minimum core capital requirement.
Dian Ediana Rae, Chief Executive of Banking Supervision at OJK, stated that the policy was issued to encourage the BPR industry to enhance its competitiveness through capital strengthening, enabling them to achieve economies of scale amid increasingly fierce competition.
“Through strong capital, BPRs are expected to improve their competitiveness, properly perform their intermediary function, and absorb risks arising from their operational activities,” Dian said in a written statement on Friday (3/7/2026).
POJK Number 7 of 2026 replaces POJK Number 5/POJK.03/2015 and adjusts BPR capital provisions to align with the latest regulatory developments and accounting standards. Under the new rules, the OJK stipulates that the fulfilment of the minimum core capital requirement can be achieved through additional paid-in capital or donated capital in the form of fixed assets, specifically land and buildings, subject to certain conditions.
The OJK also provides a relaxation on the deadline for completing administrative requirements for additional paid-in capital and adjusts capital components, including incorporating the revaluation surplus balance of fixed assets as part of core capital.
Beyond updating capital provisions, the OJK has also reinforced the enforcement mechanism for BPRs that fail to meet the minimum core capital obligation. Article 24 of the POJK specifies that BPRs which have never met the minimum core capital of IDR 6 billion before this regulation took effect will be subject to administrative sanctions as stipulated in Article 17.
Meanwhile, Article 25 stipulates that BPRs which had previously met the IDR 6 billion minimum core capital requirement but subsequently saw their capital fall below this threshold must restore their core capital to at least IDR 6 billion within a maximum period of six months from the submission of the relevant monthly report to the OJK, or from the date of the OJK examination report indicating the capital shortfall.
If the obligation remains unmet by the deadline, the BPR will face administrative sanctions as outlined in Article 17. These sanctions include not only a written warning but also the temporary suspension of part of its operational activities, a ban on business expansion, a ban on raising new funds and extending new credit, a ban on distributing dividends, and restrictions on allowances or facilities for commissioners, directors, and executive officers.
POJK Number 7 of 2026 has been effective since 30 June 2026.