Bank Indonesia Regulation (PBI) Number 10/29/BI/2008 - Intraday Liquidity Facility for Commercial Bank - Bank Sentral Republik Indonesia
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September 30, 2020
Summary Bank Indonesia Laws

Regulation : Bank Indonesia Regulation (PBI) Number 10/29/BI/2008 - Intraday Liquidity Facility for Commercial Bank
Effective date : 14th November 2008
Summary :

With the issue of PBI No. 10/26/PBI/2008 concerning Short Term Funding Facility which is not re-facilitating the conversion of unfinalized Intraday Liquidity Facility (FLI), then FLI which shall not be able to be finalized by Bank up to the determined time shall be automatically put into effect to become Repurchase Agreement with Bank Indonesia in Secondary Market. The basis of FLI stipulations:

  1. The objectives of FLI provision are:
    1. to avoid gridlock in payment system within BI-RTGS System, which may jeopardize the financial system stability, and
    2. to anticipate the possibility of Bank failure in meeting its obligations as the participant in Bank Indonesia national clearing system and finalization of debit clearing.
  2. Bank requirements in order to obtain FLI:
    1. to sign Agreement of FLI Use and to submit the supporting documents required;
    2. to hold securities which may be repoed to Bank Indonesia in the form of SBI (Bank Indonesia Certificate) and/or SUN (Government Bond);
    3. not being suspended as participant Bank in BI-RTGS System and/or terminated as participant Bank in Clearing system; and
    4. being an active participant of BI-SSSS.
  3. Process of FLI submission
    Process of FLI submission shall be done through BI-SSSS,
    1. For FLI-RTGS, Bank is to transfer securities to the account of FLI-RTGS in BI-SSSS during operational hours of BI-RTGS System; and
    2. For FLI-Kliring, Bank is to transfer securities to FLI-Kliring account in BI-SSSS in the framework of prefund provision.
  4. Process of FLI finalization
    FLI finalization is performed automatically by BI-RTGS System for every incoming transaction which credit the rupiah demand deposit account of related Bank in Bank Indonesia until the end of FLI window time. In the event FLI has been finalized by Bank (balance is nil), Bank may re-transfer the securities from FLI-RTGS account and FLI-Kliring to trading account in BI-SSSS.
  5. Process of FLI Use
    1. The use of FLI-RTGS is automatically when balance of rupiah demand deposit account of Bank in Bank Indonesia shall be insufficient to make outgoing transaction.
    2. The use of FLI-Kliring is automatically when rupiah demand deposit account of Bank in Bank Indonesia is insufficient to meet the Bank obligations for finalization of Debit Clearing.
    3. The use of FLI-RTGS and FLI-Kliring is respectively performed based on the sufficiency of securities value for FLI available in the account of FLI-RTGS and FLI-Kliring.
  6. Bank Indonesia may impose fees to Bank on the use of FLI and/or other fees related to the use of FLI.
  7. Bank is obliged to finalize the FLI up to deadline window time determined by Bank Indonesia.
  8. In the event Bank shall not be able to finalize the use of FLI up to deadline determined, towards the FLI value which is unable to be finalized shall be put into effect as repo transaction with Bank Indonesia with a maturity of 1 (one) day.
  9. In the event FLI shall be put into effect as repo transaction with Bank Indonesia as referred to in number 8, Bank is subject to prevailing Bank Indonesia stipulation concerning repo transaction with Bank Indonesia in secondary market.
  10. With the effectiveness of this Bank Indonesia Regulation, Bank Indonesia Regulation number 7/22/PBI/2005 dated 3rd August 2005 concerning Intraday Liquidity Facility for Commercial Bank is revoked and declared as no longer valid.
  11. Transition Stipulation
    Bank which during the effectiveness of this Bank Indonesia Regulation had signed the Agreement on FLI Use and its Collateral shall replace it with Agreement on FLI Use as regulated in Bank Indonesia Circular Letter.
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