Perka BPKM stands for “Peraturan Bank Perkreditan Rakyat Mengenai Kegiatan Usaha dan Jasa yang dapat Dilakukan oleh Bank Perkreditan Rakyat”. In English, it can be translated to “Bank for People’s Credit Regulation Regarding Business Activities and Services that Can be Conducted by People’s Credit Banks”.
Overview of Perka BPKM
Perka BPKM is a regulation issued by the Financial Services Authority of Indonesia (OJK) to regulate the activities and services that can be provided by People’s Credit Banks (BPR) in Indonesia. The regulation was first issued in 2016 and has been revised several times since then to keep up with the changing business environment and customer needs.
Perka BPKM covers a wide range of topics related to BPR operations, including licensing, capital requirements, risk management, product development, customer protection, and governance. The regulation aims to promote the growth and competitiveness of BPRs while ensuring that they operate safely and soundly in accordance with the principles of prudence, transparency, and accountability.
Key Provisions of Perka BPKM
Some of the key provisions of Perka BPKM include:
Licensing Requirements
BPRs must obtain a license from OJK before they can start operating. The license is valid for five years and can be renewed if the BPR meets certain criteria, such as maintaining adequate capital, complying with prudential regulations, and having a good track record of customer service.
Capital Requirements
BPRs must maintain a minimum capital requirement of IDR 2 billion ($140,000) to ensure that they have sufficient resources to absorb losses and operate sustainably. The capital can be in the form of equity, retained earnings, or other eligible instruments.
Risk Management
BPRs must implement a comprehensive risk management framework to identify, measure, monitor, and control the risks associated with their business activities. The framework should cover credit risk, market risk, liquidity risk, operational risk, and compliance risk.
Product Development
BPRs can offer a wide range of products and services to meet the needs of their customers, such as savings accounts, loans, remittances, insurance, and payment services. However, they must ensure that the products are appropriate, transparent, and affordable for their target market, and that they comply with the relevant regulations and customer protection standards.
Customer Protection
BPRs must treat their customers fairly and responsibly, disclose all relevant information about their products and services, and resolve any complaints or disputes promptly and fairly. They must also comply with the anti-money laundering and counter-terrorism financing regulations to prevent any illegal or unethical activities.
Governance
BPRs must have a sound and effective governance structure, including a board of directors, internal audit, risk management, and compliance functions. They must also maintain a good reputation and integrity, and avoid any conflicts of interest or unethical practices.
Benefits of Perka BPKM
Perka BPKM has several benefits for BPRs, customers, and the wider community, including:
Promoting Financial Inclusion
Perka BPKM encourages BPRs to serve the underserved and unserved segments of the population, such as micro, small, and medium-sized enterprises (MSMEs), farmers, fishermen, and low-income households. This can help to promote financial inclusion, reduce poverty, and stimulate economic growth and development.
Improving Financial Stability
Perka BPKM strengthens the prudential regulations and risk management standards for BPRs, which can help to improve their financial stability and resilience. This can reduce the risk of systemic failures and contagion in the financial sector, and enhance the confidence of depositors and investors in BPRs.
Enhancing Customer Protection
Perka BPKM sets high standards for customer protection and service quality for BPRs, which can help to enhance the trust and loyalty of their customers. This can lead to increased customer satisfaction, retention, and referrals, and can also reduce the risk of reputational damage and legal disputes for BPRs.
Challenges of Perka BPKM
Perka BPKM also faces several challenges that need to be addressed to ensure its effectiveness and sustainability, such as:
Compliance Costs
Complying with the complex and evolving regulations of Perka BPKM can be expensive and time-consuming for BPRs, especially the smaller and less sophisticated ones. This can create a barrier to entry and expansion for some BPRs, and may result in higher prices or lower quality of services for customers.
Supervision Capacity
OJK needs to have sufficient resources and capacity to supervise and enforce the compliance of BPRs with Perka BPKM. This requires well-trained and experienced staff, advanced technology and data analytics, and effective coordination with other regulatory authorities and stakeholders.
Market Competition
Perka BPKM aims to promote competition and innovation among BPRs, but it also faces competition from other financial institutions, such as commercial banks, digital financial services providers, and peer-to-peer lending platforms. This can create challenges for BPRs in terms of differentiation, customer acquisition, and profitability.
Conclusion
Perka BPKM is a key regulation that governs the activities and services of BPRs in Indonesia. It provides a framework for promoting the growth, stability, and customer protection of BPRs, while also addressing the challenges of compliance costs, supervision capacity, and market competition. BPRs and other stakeholders need to understand and comply with the provisions of Perka BPKM to ensure the sustainability and success of the BPR sector in Indonesia.
