09 Nov

OJK Focus On Implementation Of Sharia People's Economy Bank Products

By Admin Regulation

SEOJK regarding the Implementation of Sharia People's Economic Bank Products (BPRS Product SEOJK) was issued in order to create a Sharia People's Economic Bank that is highly competitive and contributes significantly to the national economy and social development, as well as aligning with the provisions of laws and regulations to encourage the development of the implementation of Sharia People's Economic Bank products while still paying attention to the principles of adequate capital, implementing effective risk management and implementing the precautionary principle.

SEOJK BPRS Products is an implementation provision of POJK Number 25/POJK.03/2021 concerning the Implementation of BPR and BPRS Products. SEOJK This BPRS product replaces the previous provisions, namely SEOJK Number 37/SEOJK.03/2015 concerning Products and Activities of Sharia Rural Financing Banks.

 

PRINCIPAL REGULATIONS

SEOJK BPRS products consist of 10 sections with the main provisions as follows:

 

A. Part I – General Provisions

In administering Products, BPRS ensures that the implementation of risk management and governance for the administration of Products is carried out in accordance with the Financial Services Authority Regulations regarding the implementation of risk management and implementation of governance for BPRS.

 

B. Part II – BPRS Products

BPRS products are grouped into:
Basic products, namely products, services, services, and/or other activities attached to the BPRS business license in the form of raising funds, distributing funds, placing funds, and/or other basic activities as stated in Attachment I-SEOJK.

Advanced products, namely products, services, services and/or other activities to support BPRS businesses based on information technology, related to the implementation of activities or products of non-bank financial services institutions or influencing the assessment of BPRS risk profiles, and which require permission and/or approval from other authorities. Advanced products are products that are not listed in Attachment I-SEOJK.

​A BPRS product is categorized as a new product if: 

  1. has never been held previously by the relevant BPRS; 
  2. or had previously been held by the relevant BPRS but the Product development was carried out resulting in changes to the inherent risks of the Product and the risk profile of the BPRS.
  3. BPRS products that are categorized as new products must be included in the BPRS business plan.

 

C. Part III – Principles of Implementation of BPRS Products

BPRS ensures that the implementation of risk management includes compliance with Sharia Principles and the implementation of governance over Product operations is carried out, among other things, in accordance with: 

  1. Financial Services Authority Regulations regarding the implementation of risk management for BPRS; and
  2. Financial Services Authority regulations regarding the implementation of governance for BPRS.

BPRS providing advanced products must pay attention to the principles of: 

  1. adequate capital; and
  2. implementing risk management effectively.

 

D. Part IV – New Product Implementation Mechanism

The BPRS Sharia Supervisory Board submits opinions regarding new products, which, among other things, refer to fatwas and/or statements of sharia conformity issued by institutions that have the authority to determine fatwas in the field of sharia and provisions governing the implementation of Sharia Principles (opinion format as stated in the attachment in the POJK for the Implementation of BPR and BPRS Products, as well as as stated in Attachment II-SEOJK).

BPRS that organize new basic products in the form of other basic activities, are required to submit a report on the realization of the implementation of new basic products (report format as stated in the attachment in the POJK for Organizing BPR and BPRS Products).

BPRS that will administer advanced products are required to obtain approval for the implementation of new advanced products from the Financial Services Authority, with the following mechanism:

  1. Approval with a limited trial project (piloting review);
  2. Approval without going through a limited trial project; or
  3. Approval in the form of notification of plans to implement new follow-up products (instant-approval).

In the event that according to the Financial Services Authority's assessment there is a non-compliance with the provisions of laws and regulations and/or the potential to create significant risks in the mechanism for administering new products, the Financial Services Authority has the authority to take certain actions including:

  1. request BPRS to fulfill the requirements and/or adjust the implementation mechanism to a limited trial project;
  2. ask BPRS to fulfill the requirements and/or adjust the implementation mechanism to be approved without going through a limited trial project; or
  3. stop plans to implement new follow-up products.

 

E. Part V – Adjustment of New Product Implementation Plan

BPRS can make adjustments to new Product implementation plans other than those submitted in the business plan, including adding new Product implementation plans and/or improvements to new Product implementation plans that have previously been included in the business plan.

 

F. Part VI – Discontinuation of BPRS Products

Termination of BPRS products can be carried out on the basis of an initiative from the BPRS or on the basis of an order from the Financial Services Authority.

 

G. Part VII – Consumer Protection

BPRS is obliged to apply the principles of consumer and community protection in administering products in accordance with the provisions of laws and regulations regarding consumer and community protection in the financial services sector. In the event that a BPRS provides products that require permits and/or approval from other authorities, the BPRS is also obliged to comply with the provisions regarding consumer and public protection issued by the competent authority.

In the event that Product implementation is carried out in collaboration with a third party, the BPRS must ensure that the third party in question also applies the principles of consumer and community protection as stated in the cooperation agreement.

 

H. Part VIII – Reporting

BPRS submits reports on the realization of the implementation of new Products, reports on plans for implementing limited trial projects, reports on the realization of Product discontinuation, and/or applications for approval for the implementation of new Products online through the Financial Services Authority's integrated reporting system and/or licensing and registration system.

In the event that a reporting system and/or licensing system is not yet available, the BPRS submits a report and/or request for approval to:

  1. the regional office of the Financial Services Authority for BPRS whose head office is in the working area of the regional office of the Financial Services Authority; or
  2. the Financial Services Authority office for BPRS whose head office is in the working area of the Financial Services Authority office.

 

I. Part IX – Transitional Provisions

BPRS products and/or activities that have been implemented in accordance with Appendix IV of the Financial Services Authority Circular Letter Number 37/SEOJK.03/2015 concerning Sharia Rural Bank Products and Activities prior to the enactment of this Financial Services Authority Circular Letter are adjusted or terminated with the following provisions:

  1. Adapt the terms and conditions to the basic Product characteristics as stated in Attachment I-SEOJK; or
  2. In the event that the terms and conditions cannot be adjusted to the characteristics of the basic product as stated in Appendix I in relation to the binding agreement, BPRS will discontinue the product at the end of the term. If the BPRS still wants to re-distribute the product in question with characteristics that do not comply with Attachment I to the basic product as per this SEOJK, then it will follow the follow-up product mechanism through approval.

 

J. Chapter X – Conclusion

This Financial Services Authority Circular Letter comes into effect on the date of stipulation.

Source : ojk.go.id