“However, PBI 20/06/2018 also specifically mentioned that aside from the representation and warranties from the board of director, applicants are also obliged to enclose a professional statement (Legal Opinion) from an independent and professional legal consultant (“Lawyer”), based on the results of their Legal Due Diligence (“LDD”) to the applicant company as required.”
The dramatic growth and development on Information Technology sector (“IT”) nowadays has affected and change many business and personal interaction landscape, nonetheless on the financial and monetary sector.
Since 2008, Indonesia has fully aware with the phenomenon and issued a specific regulation trough Law No.11 of 2008 on Information and Electronic Transaction (“Law No.11/2008”).
Money as one of transaction instrument also has evolved into many shapes, from coin, paper and later in accordance with the rapid growth of IT sector, Money also has transformed into an electronic shape (E-Money).
Nowadays, E-Money has steadily increased both in terms of volume and nominal transactions per year here in Indonesia. The use of small, fast and relatively secure payment transactions is an E-Money characteristic, that makes it as a popular choice for non-cash payment instruments that are in demand by the public.
We all know that based on the economic theory of supply and demand, the mentioned demand above had also attracted many business entities (either bank or non-bank) to enter the business as E-Money issuer or operator here in Indonesia.
Therefore, in order to specifically regulate the implementation of E-Money, Bank Indonesia just recently issued Regulation Number 20/6/PBI/2018 (‘PBI 20/06/2018”) on E-Money.
Before we move forward, in order to give a better understanding on E-Money, it is important for us to see the definition of E-Money first as it stipulated by PBI 20/06/2018:
E-Money is a payment instrument that meets the following elements:
- issued on the basis of the value of money paid in advance to the publisher;
- the value of money is stored electronically on a media server or chip; and
- the value of E-Money managed by the issuer is not a deposit as referred to in the Act governing banking.
After we acknowledged the official definition of E-Money, further question which party is eligible to become E-Money operator?
The eligible party to apply for permission as the Operator of E-Money must be in the form of:
- Bank; or
- Non-Bank Institutions (Non-Bank Institutions must be formed as limited liability companies or PT).
However, aside from the fundamental requirement mentioned above, PBI 20/06/2018 stipulated another specific requirements, such as Feasibility aspects which includes:
- institutional and legal;
- business feasibility and operational readiness; and
- governance, risk and control.
In addition to fulfilling eligibility on institutional and legal aspects, Banks or Non-Bank Institutions submitting applications for licenses as Providers must submit representations and warranties in writing to Bank Indonesia and signed by the board of directors authorized to represent Banks or Non-Bank Institutions.
However, PBI 20/06/2018 also specifically mentioned that aside from the representation and warranties from the board of director, applicants are also obliged to enclose a statement (Legal Opinion) from an independent and professional legal consultant (“Lawyer”), based on the results of their Legal Due Diligence (“LDD”) to the applicant company as required.
We hope the information above could give you a brief understanding on how to establish or enter your E-Money operator company here in Indonesia.
Gaffar & Co.
Gaffar & Co. is an Indonesian Boutique Law Firm that Focus on Commercial Law Area (corporate and dispute resolution).
For further queries and information, contact us:
+62-21 5080 6536 | info@gaffarcolaw.com | www.gaffarcolaw.com
Author: Belle Risca Junia / Arif Gaffar
