INDONESIA FINANCIAL SECTOR ASSESSMENT PROGRAM - DETAILED ASSESSMENT OF OBSERVANCE BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION

Jul 19, 2026

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The report presents a detailed assessment of Indonesia’s observance of the Basel Core Principles for effective banking supervision under the joint IMF-World Bank Financial Sector Assessment Program (FSAP), covering work led in October 2023 and dated August 6, 2024. It structures analysis around preconditions for supervision, key banking supervision principles, main findings, and an extensive compliance assessment, including specific topics such as supervisory cooperation, licensing, corrective measures, consolidated supervision, corporate governance, audit, financial reporting, capital adequacy, risk management, and abuse of financial services. It concludes with recommended actions and authorities’ responses.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages237

Reading Time9 h 57 min

AccessFree to download

Executive Summary

Introduction

Institutional and Market Structure—Overview

Preconditions for Effective Banking Supervision

Soundness and Sustainability of Macroeconomic Policy

Financial Stability Policy Framework

Public Infrastructure

Crisis Management, Recovery, Resolution, and Appropriate Level of Systemic Protection

Systemic Protection and Public Safety Nets

Effective Market Discipline

Main Findings

Principles 1–2 Objectives, Powers, and Independence

Principles 3 and 13 Supervisory Cooperation and Cross-Border Supervision

Principles 4–7 Licensing, Changes in Control, and Major Acquisitions

Principles 8, 9, and 10 Supervisory Approach, Tools, and Reporting

Principles 11 and 12 Corrective Measures and Consolidated Supervision

Principles 14, 26–28 Corporate Governance, Audit, and Financial Reporting

Principle 16 Capital Adequacy

Principles 15, 17–25 Risk Management

Principle 29 Abuse of Financial Services

Detailed Assessment

Summary Compliance with the Basel Core Principles—Detailed Assessment

Recommended Actions and Authorities' Comments

Recommended Actions

Authorities’ Response to the Assessment

Annex

Review of the Principles Specific to Islamic Banking in the Core Principles for Islamic Finance Regulation (Banking Segment) (CPIFR)

Public Disclosure Authorized Public Disclosure Authorized August 6, 2024 INDONESIA FINANCIAL SECTOR ASSESSMENT PROGRAM DETAILED ASSESSMENT OF OBSERVANCE BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION Prepared By Monetary and Capital Markets Department, IMF, and Finance, Competitiveness and Innovation Global Practice, World Bank This report was prepared in the context of a joint IMF-World Bank Financial Sector Assessment Program (FSAP) mission in Indonesia during October 2023, led by Ranjit Singh, IMF and Ilias Skamnelos, World Bank, and overseen by the Monetary and Capital Markets Department, IMF, and the Finance, Competitiveness and Innovation Global Practice, World Bank. Further information on the FSAP program can be found at [http://www.imf.org/external/np/fsap/fssa.aspx](http://www.imf.org/external/np/fsap/fssa.aspx), and [www.worldbank.org/fsap](www.worldbank.org/fsap). CONTENTS Glossary__________________________________________________________________________________________ 4 EXECUTIVE SUMMARY __________________________________________________________________________ 6 INTRODUCTION ________________________________________________________________________________ 10 INSTITUTIONAL AND MARKET STRUCTURE—OVERVIEW 12 ___________________________________ PRECONDITIONS FOR EFFECTIVE BANKING SUPERVISION __________________________________ 15 A. Soundness and Sustainability of Macroeconomic Policy ______________________________________ 15 B. Financial Stability Policy Framework___________________________________________________________ 16 C. Public Infrastructure __________________________________________________________________________ 18 D. Crisis Management, Recovery, Resolution, and Appropriate Level of Systemic Protection ____ 20 E. Systemic Protection and Public Safety Nets ___________________________________________________ 22 F. Effective Market Discipline ____________________________________________________________________ 23 MAIN FINDINGS________________________________________________________________________________24 A. Principles 1–2 Objectives, Powers, and Independence ________________________________________ 24 B. Principles 3 and 13 Supervisory Cooperation and Cross-Border Supervision__________________ 26 C. Principles 4–7 Licensing, Changes in Control, and Major Acquisitions_________________________ 26 D. Principles 8, 9, and 10 Supervisory Approach, Tools, and Reporting __________________________ 27 E. Principles 11 and 12 Corrective Measures and Consolidated Supervision _____________________ 28 F. Principles 14, 26–28 Corporate Governance, Audit, and Financial Reporting __________________ 29 G. Principle 16 Capital Adequacy ________________________________________________________________ 30 H. Principles 15, 17–25 Risk Management _______________________________________________________ 30 I. Principle 29 Abuse of Financial Services _______________________________________________________ 34 DETAILED ASSESSMENT 35 _______________________________________________________________________ SUMMARY COMPLIANCE WITH THE BASEL CORE PRINCIPLES—DETAILED ASSESSMENT ________________________________________________________________________________ 203 RECOMMENDED ACTIONS AND AUTHORITIES' COMMENTS______________________________ 216 A. Recommended Actions ______________________________________________________________________216 B. Authorities’ Response to the Assessment ____________________________________________________223 TABLE 1. Structure of Financial System, End-2022 ______________________________________________________ 12 ANNEX I. Review of The Principles Specific to Islamic Banking in the Core Principles for Islamic Finance Regulation (Banking Segment) (CPIFR) _________________________________________________________226 Glossary AC AML/CFTBCBS BCP BI BoC BoD C CAR CDD CET1 CMP CPF D-SIB EC ICAAP IDR IFR

FAQs

What is the purpose of the FSAP in this report?

It assesses Indonesia’s observance of the Basel Core Principles for effective banking supervision as part of a joint IMF-World Bank Financial Sector Assessment Program mission.

Which supervision areas are covered in the main findings?

The report evaluates objectives, powers, independence, supervisory cooperation, licensing and acquisitions, supervisory approach and tools, corrective measures and consolidated supervision, corporate governance and reporting, capital adequacy, risk management, and abuse of financial services.

How does the report end?

It provides a compliance summary with detailed assessments, followed by recommended actions and the authorities’ response to the assessment.

Jul 19, 2026

Upload by Aurora