On 30 July 2021, the Financial Services Authority/Otoritas Jasa Keuangan ("OJK") issued (i) OJK Regulation No. 12/POJK.03/2021 on Commercial Banks ("OJK Reg 12/2021"), and (ii) OJK Regulation No. 13/POJK.03/2021 on the Administration of Commercial Bank Activities ("OJK Reg 13/2021") which covers (i) Digital Bank and (ii) Commercial Bank, these newly issued regulations will come into effect three months after its issuance or on 30 October 2021.

The main purpose of the issuance of OJK Reg 12/2021 and OJK Reg 13/2021 would be to enable a more competitive, adaptive, and efficient banking environment in responses to the dynamic global economy and technology development.

The adoption of the Digital Bank concept into the banking legal framework is very significant, given that there are a number of players that are looking to transform its conventional banks into fully digitally operated banks.

In this article, we will focus our analysis on Digital Bank operations from the perspective of the new OJK provisions.

Legal Frameworks:This Legal Insight will cover the following regulations:

1. OJK Reg 12/2021,which revokes and replaces the following regulatory frameworks:

  1. Central Bank of Indonesia ("BI") Regulation No. 11/1/PBI/2009 on Commercial Banks and amendments thereof;
  2. Art. 17 (a) of OJK Regulation No. 5/POJK.03/2016 on Bank Business Plans;
  3. OJK Regulation No. 6/POJK.03/2016 on Business Activities and Office Networks of Commercial Bank based on the Initial Capital and its relevant implanting regulation and amendments thereof;
  4. Board of Directors of BI Decree No. 32/37/KEP/DIR of 1999 on Requirements and Procedures for the Opening of Branch Offices, Assistant Branch Offices, and Representative Offices of Banks Located Overseas; and
  5. Board of Directors of BI Decree No. 32/53/KEP/DIR of 1999 on Procedures for the Revocation of Business Licenses, Dissolution, and Liquidation of Commercial Banks.

2. OJK Reg 13/2021, which revokes the following provisions:

  1. Art. 16 of OJK Regulation No. 5/POJK.03/2016 on Bank Business Plan;
  2. Art. 33 of OJK Regulation No. 16/POJK.03/2017 on Intermediary Bank;
  3. Art. 20, 21, 22, and 24 of OJK Regulation No. 18/POJK.03/2016 on the Organization of Risk Management of Commercial Bank;
  4. BI Regulation No. 9/19/PBI/2007 on the Organization of Sharia Principle in Fundraising and Fund Distribution Activities and Sharia Bank Services; and
  5. OJK Circular Letter No. 36/SEOJK.03/2015 on Product and Activity of Sharia Commercial Bank and Sharia Business Unit.

I. Digital Bank under OJK Reg 12/2021

A. Definition of Digital Bank: Before the issuance of OJK Reg 12/2021, Digital Bank has not been specifically defined. OJK Reg 12/2021 now provides the definition of Digital Bank which reads as follows:

"an Indonesian bank that provides and carries out business activities primarily through electronic channels without a physical office apart of its headquarter or a limited physical office." (Art. 1 Point 22 of OJK Reg 12/2021)

The above definition provides a clear recognition to the Digital Bank concept which will pave ways for fully digital bank such as Bank Jago to have significant presence in the Indonesia banking spectrum.

B. Digital Bank Requirements:OJK Reg 12/2021 also provide the requirement for Digital Bank which includes the following:

  1. Carry out a business model that utilizes innovative and safe technologies to meet the customers' needs;
  2. Have the ability to manage a prudent and sustainable digital banking business;
  3. Provide adequate risk-management processes and procedures;
  4. Must satisfy various governance aspects, including having a board of director with sufficient IT and other competence as assessed by OJK;
  5. Ensure adequate protection and security of all customer data; and
  6. Make an active contribution to the development of a digital financial ecosystem and/or to financial inclusion (Art. 24 of OJK Reg 12/2021)

(together referred to as "Digital Bank Requirements")

C. Establishment of Digital Bank: A Digital Bank can either be a newly established bank or an existing commercial bank that transforms into a digital bank. In general, the establishment prerequisites of Digital Bank are the same as other commercial banks, except for certain special conditions (Art. 26 (1) of OJK Reg 12/2021).

OJK Reg 12/2021 stipulates the following requirements for a establishing a new Digital Bank:




Minimum issued and paid-up capital of IDR10 Trillion Rupiahs, with 30% of which must be deposited before applying for in-principle license to the OJK (Art. 12 (1) jo. Art 26 (2) (a) of OJK Reg 12/2021).


The shareholders of Digital Bank can consist of:

  • Indonesian individual or legal entities; or
  • A joint venture between Indonesian and foreign parties (individual/legal entities) with maximum ownership of foreign party of 99% of total paid-up capital.

Banking Business Plan

A prospective digital bank must at least include the following on its banking business plan:

  • Efforts to fulfill Digital Bank Requirements;
  • Plans to open an office network in the form of Branch Offices/Kantor Cabang and/or Function Offices/Kantor Fungsional.


Digital bank licensing is carried out in 2 steps, which are:

  1. Issuance of in-principle license: a license to enable preparations to establish the bank, which valid for 6 months; and
  2. Issuance of bank business license: a commercial license to carry out banking operations which will be issued upon the completion of in-principle license (Art. 14 of OJK Reg 12/2021).

II. Banking Operation Plan Reporting & Banking Product Classification

A. Banking Operations Plan Reporting: OJK Reg 13/2021 requires the bank to include new banking products in its Banking Product Implementation Plan/ Rencana Penyelenggaraan Produk Bank ("RPPB"). Such plan must be submitted to OJK at the end of November before the year of planned product launching. If the relevant bank has no development plan, the relevant bank shall inform the same to OJK.

B. Banking Product Classification: Generally, banking products are classified into two categories (i.e., basic and advanced products (Art. 4 (1) of OJK Reg 13/2021)). Below are the scope and the organization of each banking products classifications:


Basic Product

Advanced Product

Scope of Product/Service

  1. fund collection (i.e., current accounts, savings accounts, time deposit, etc.);
  2. fund distribution, (i.e., lending, factoring, issuance of guarantees, and trade finance); and
  3. other basic operations stipulated by the OJK (Art. 4 (2) of OJK Reg 13/2021)
  1. IT-based products/services;
  2. products related to another financial services institution;
  3. Products/services which require approval or permission from another institution; and/or
  4. Products/services that are complex in nature (Art. 4 (3) of OJK Reg 13/2021).

OJK license

Not required


(Note: Please refer to Art. 11 -14 of OJK Reg 13/2021 for the complete procedure of license issuance)

Realization report

Must be submitted within 5 business days of product launch

Must be submitted within 5 business days of product launch

Sanction of violation

Failure to submit realization report may subject to fine of IDR1 Million Rupiahs per delayed day up to maximum of IDR50 Million Rupiahs (Art. 9 (5) of POJK 13/2021).

  • Non-compliance to licensing obligation may subject to written warning and fine of IDR100 Million Rupiahs per product (Art. 10 (3) of POJK 13/2021).
  • Failure to submit realization report may subject to fine of IDR1 Million per delayed day up to maximum of IDR50 Million (Art. 21 (1) of POJK 13/2021).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.