Indonesia's Financial Services Authority (OJK) issued two new regulations to strengthen capital, liquidity and longer-term funding resilience in the Islamic banking sector, aligned with Basel III and Islamic Financial Services Board standards. The measures require Islamic commercial banks (Bank Umum Syariah, BUS) and Sharia business units (Unit Usaha Syariah, UUS) to maintain a minimum Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) of 100%, and require BUS to maintain a minimum leverage ratio of 3%. Under POJK 20/2025, BUS and UUS must calculate and monitor LCR and NSFR regularly at both solo and consolidated levels, with reporting and public disclosure to be phased in from 2026 to 2028. Under POJK 21/2025, which applies to BUS from 17 September 2025, the first leverage ratio reporting obligation applies for end-Q1 2026 positions and publication starts from September 2026; BUS that cannot meet the minimum threshold may submit an action plan to OJK, and breaches may be subject to administrative sanctions including monetary and non-monetary measures.
OJK 2025-10-31
Indonesia's Financial Services Authority issues 100% LCR and NSFR and 3% leverage ratio rules for Islamic banks
Indonesia's Financial Services Authority (OJK) introduced regulations to enhance capital, liquidity, and funding resilience in Islamic banking, aligning with Basel III and Islamic Financial Services Board standards. Islamic commercial banks (BUS) and Sharia business units (UUS) must maintain a minimum Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) of 100%, with BUS also required to maintain a minimum leverage ratio of 3%. Reporting and public disclosure will be phased in from 2026 to 2028, with non-compliance potentially resulting in sanctions.