Circular Letter of Bank Indonesia No. 18/42/DKSP on Non-Bank Foreign Exchange Business Activities - Bank Sentral Republik Indonesia
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November 20, 2019
SUMMARY OF REGULATION OF BANK INDONESIA
 
Regulation
:
Circular Letter of Bank Indonesia No. 18/42/DKSP on Non-Bank Foreign Exchange Business Activities
Effective Date
:
From 30 December 2016
Summary
:
 
 
1.         This Circular Letter is issued by considering that it is necessary to stipulate implementing provisions for Regulation of Bank Indonesia Number 18/20/PBI/2016 on Non-Bank Foreign Exchange Business Activities.
2.         This Circular Letter stipulates the following:
a.      settlement of buying and selling of foreign banknotes against Rupiah;
b.      criteria for buying foreign banknotes with documents for underlying transactions;
c.       restriction for Money Changers to impose any fees in buying and selling foreign banknotes from and to Customers;
d.      procedures for handling and settlement of Customer’s complaints;
e.      document requirements and procedures for license application as a Money Changer;
f.       license validity and procedures for license validity extension application;
g.      training or certification materials for the Board of Directors;
h.      inclusion of logo, certificate, and trade name;
i.        process of branch office and counter opening, change of address, and branch office closing;
j.        termination of business activities;
k.       procedures for implementation of cooperation with any parties other than Money Changers; and
l.        requirements for selling and buying foreign banknotes in border areas.
3.         Money Changers must apply the following principles in customer protection: fairness and reliability, transparency, protection of customer’s data and/or information, and effective handling and settlement of customer’s complaints.
4.         Bank Indonesia takes the following phases in license grant processing:
a.       examination of fulfillment of institutional requirements and financial condition;
b.       examination of fulfillment of requirements as members of the Board of Directors, members of the Board of Commissioners, and shareholders of prospective Money Changers;
c.       examination of business premises of Money Changers; and
d.       dissemination of provisions.
5.         Upon obtaining their licenses, Money Changers must carry on their business activities within 30 (thirty) days as of the notice date.
6.         License as a Money Changer is valid for 5 (five) years as of the license grant date and may be extended by submitting an application to Bank Indonesia.
7.         Bank Indonesia may revoke the business license as a Money Changer if:
a.       the Money Changer is no longer in operation or conducting any business activities;
b.       the Money Changer no longer has active and responsible management; and/or
c.       the Money Changers changes their business address without the approval of Bank Indonesia.
8.         In the event of any change of members of the Board of Directors, members of the Board of Commissioners, and/or shareholders, the replacement candidates must obtain prior approval of Bank Indonesia.
9.         Members of the Board of Directors of Money Changers must attend any training/certification program supporting the implementation of Non-Bank Foreign Exchange Business Activities; among others are materials on Anti-Money Laundering and Prevention of Terrorism Funding, financial (business) management, general management, risk management, or any other materials relating to foreign exchange business activities.
10.       In carrying on their business activities, a Money Changer must include:
a.       logo of authorized Money Changer;
b.       business license certificate issued by Bank Indonesia; and
c.       signage bearing ”Authorized Money Changer”, company name, trade name, and the number and date of Business License Grant Decision.
11.       Any Money Changers intending to open their branch office must carry on their business activities for at least 2 (two) years as of the license issuance date and meet the requirements for paid-up capital.
12.       Counters may be opened in order to support certain activities, such as international fairs or activities, in the headquarters and/or branch office areas of the relevant Money Changers and may be conducted for 1 (one) month at the maximum and may be extended 1 (one) time only.
13.       Money Changers must submit the following reports to Bank Indonesia:
a.       Periodic Reports, consisting of:
1)       Business Activity Report
Business Activity Report means report on selling and buying of foreign banknotes and purchase of traveler’s checks; and
2)       Financial Statement
Financial Statement means Balance Sheet (Financial Statement), Income Statement, and Equity Statement at the end of the year.
b.       Incidental Reports, consisting of:
1)       report on appointment of the Board of Directors, Board of Commissioners, and/or change of shareholders;
2)       report on participation of members of the Board of Directors in training/certification;
3)       report on branch office opening;
4)       report on counter opening;
5)       report on change of office address;
6)       report on change of Limited Liability Company’s name;
7)       report of change of subscribed capital and/or paid-up capital;
8)       report on problems in foreign exchange business activities, including the mitigation efforts;
9)       report of force majeure, which means any events beyond the control of a Money Changer resulting in the failure in carrying on business activities, the events of which include but not limited to fire, riot, sabotage, and natural disasters, such as earthquake and floods, declared by the local authority or competent official, including Bank Indonesia;
10)    report on cooperation with hotels or companies similar to hotels; and
11)    other reports, which may be requested at any time by Bank Indonesia, such as report on foreign exchange rate on a certain date, report on a certain financial transaction, and report on cooperation plan.
14.       Bank Indonesia supervises Money Changers directly by examining their business activities in order to examine and evaluate their compliance with the regulations, and indirectly by monitoring and analyzing reports they submit and information from other parties.
15.       Money Changers may cooperate with any parties other than Money Changers (hotels or companies of accommodation services) to buy foreign banknotes with the approval of Bank Indonesia.
16.       Any parties other than Money Changers, which sell and buy foreign banknotes in border areas, must be companies carrying on their business activities in border areas of Indonesia and must obtain prior approval of Bank Indonesia.
17.       Any Money Changers in breach of the provisions in this Circular Letter will be imposed with the following administrative sanctions:
a.       written warning;
b.       mandatory payment;
c.       termination of business activities; and/or
d.       license revocation.
18.       This Circular Letter starts to take effect from 30 December 2016.
 
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