OJK Monitors Sumatra Floods, Prepares Mitigation Measures for Banking Sector

Regulatory Response to Natural Disasters

The Financial Services Authority (OJK) is closely monitoring the recent floods in Sumatra and surrounding areas, recognizing the potential impact on economic activities and the banking sector. The authority is particularly concerned about the risk of increased non-performing loans due to the disaster. To address this, OJK has been coordinating internally and preparing mitigation measures to ensure the stability of the financial sector.

Existing Regulatory Framework

OJK has a comprehensive regulatory framework in place, namely POJK 2022, which governs special treatment for financial services institutions in disaster-affected regions. This regulation allows for various support measures, including credit restructuring and asset quality adjustment. The policy can be applied to banking, capital market industry, and non-bank financial institutions.

Implementation and Coordination

The OJK Emergency Response Team, along with representatives from the OJK Head Office, has been deployed to the affected areas to assess the situation and gather necessary data. The findings from this evaluation will inform OJK's further actions and policy decisions. The authority is prepared to implement measures such as credit restructuring for loans up to Rp10 billion and separate assessment for new credit facilities to support affected debtors and businesses.

Maintaining Financial Stability

OJK's proactive approach aims to maintain stability in the financial sector while providing necessary support to communities and businesses affected by the disaster. The authority's preparedness to respond to such events demonstrates its commitment to balancing financial stability with economic support during extraordinary circumstances.