Indonesia: New e-money regulation

Two coins of one thousand Indonesia Rupiah money and black leather wallet on brown floor with digital board of currency exchange background.

Nine years after it first stepped in to regulate the e-money sector in Indonesia, the central bank (Bank Indonesia) has responded to technological change by issuing a new regulation to supersede Bank Indonesia Regulation 11/12/BIR/2009 on electronic money (BIR 11/12). Besides making the necessary changes to encompass the latest developments in the e-money sector, the new regulation – Bank Indonesia Regulation 20/6/BIR/2018 (BIR 20/6) – also places restrictions on foreign ownership and introduces new minimum capitalisation requirements for all e-money issuers.

While BIR 11/12 was silent on foreign investment in the e-money sector, BIR 20/06 now limits foreign participation, whether direct or indirect, to a maximum of 49% in an e-money issuer. Further, any foreign investment must be made in the form of a limited liability company established under Indonesia's foreign direct investment regime (locally known as a PMA company). E-money issuers that obtained a licence before BIR 20/6 entered into force must comply with the foreign ownership restrictions if they experience a change of ownership that results in foreign shareholding or an increase in foreign shareholding.

In addition, BIR 20/6 requires every e-money issuer (whether a local or PMA company) to have paid-up capital of at least IDR 3 billion ($204,300), and to gradually increase its minimum paid-up capital in line with any increase in its floating fund during the previous year (January to December).

The required capital increases are regulated as follows: minimum paid-up capital of IDR 6 billion for a floating fund of between IDR 3 billion and IDR 5 billion; IDR 10 billion for a floating fund of between IDR 5 billion and IDR 9 billion; and, IDR 10 billion plus three percent of the floating fund, in the case of a floating fund that exceeds IDR 9 billion.

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Elsie F Hakim

Rully Hidayat


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