The head of the Indonesian Financial Transactions Report and Analysis Centre has issued a new regulation on the procedure for the submission of reports on suspicious financial transactions. Among other things, the regulation is intended to prevent and eventually abolish money laundering, and to improve the reporting system used by financial providers.
Bank Indonesia's Regulation on Monetary Operations is in effect. Among other things, the regulation stipulates the mechanics and instruments that the bank uses in its open market operations, including the purchase and sale of securities and foreign currencies. A key provision regulates the administration and trading of Bank Indonesia certificates.
Bank Indonesia recently issued a number of regulations as part of a new monetary policy package, including the Regulation on Commercial Banks' Obligation to Apply the Prudential Principles in their Activities as Agent for Overseas Financial Products. Among other things, the new regulation broadens the scope of what Bank Indonesia considers to be agency activities in foreign financial products.
A new Bank Indonesia circular implements the Regulation on Risk Management Application for Commercial Banks, which seeks to address the ever-growing risks arising from the increased complexity of banking products and services. In essence, the circular states that all banks must obtain Bank Indonesia's confirmation before issuing a new product or engaging in a new activity.
Bank Indonesia has introduced an intra-day liquidity facility to ensure smoother payments for banks that operate on the basis of Islamic and shariah principles. It is hoped that the facility will help to prevent payment gridlocks in money transfers or securities transfers that could cause wider instability in Indonesia's financial system.
The governor of Bank Indonesia recently issued the Regulation on the Conversion of a Conventional Bank to a Shariah Bank. The main effect of the regulation allows conventional banks to convert to shariah banks and community credit banks to convert to shariah community credit banks, but not vice versa.
In order to address developments in the use of electronic money as a payment instrument, Bank Indonesia has issued two comprehensive regulations on the subject. They apply not only to banking institutions, which are traditionally under the watch of Bank Indonesia, but also to other institutions that act as principals, issuers, acquirers, clearing entities or settlement agencies for payment card business.
In keeping with its statutory duty to stabilize Indonesia's currency, the Bank of Indonesia has taken measures to control speculative rupiah transactions, capping purchases of foreign currency from a bank at $100,000 a month. An individual or legal entity, whether foreign or Indonesian, must demonstrate the economic necessity of a transaction that exceeds the threshold.