“The Overseas Bank Representative Office in Indonesia has limited activities, only as a liaison between the bank overseas and its customer in Indonesia. Furthermore, in conducting its activities, there are some mandatory reports to the OJK.“
The Financial Services Authority (“Otoritas Jasa Keuangan/OJK“), through their website, mentioned that currently, there are 25 (twenty-five) OverseasBank Representative Offices located in Indonesia, consisting of 23 (twenty-three) of the conventional OverseasBank Representative Office and the others are the sharia OverseasBank Representative Bank.
Likewise, the general representative office in Indonesia, The OverseasBank Representative Office, also has limited activities: only as a liaison between the bank overseas and its customer in Indonesia. However, unlike the general representative office, the OverseasBank Representative Office has a mandatory report to the OJK related to some of its activities.
A. Definition
Pursuant to Financial Services Authority Regulation No. 12/POJK.03/2021 of 2021 regarding Commercial Banks (“POJK 12/2021”),, the OverseasBank Representative Office (Kantor Perwakilan Bank yang Berkedudukan di Luar Negeri or “KPBLN”)is an office of the bank with an overseas head office that is acted as liaison between the bank with overseas head legal entity and its customer in Indonesia. The KPBLN is prohibited from doing bank business activities in general.
With regard to its definition, KPBLN is not an Indonesian Legal Entity Bank (Bank Berbadan Hukum Indonesia or “Bank BHI”). Furthermore, its activities in Indonesia is only as a liaison between the bank overseas and its customer in Indonesia.
B. Limitation Activities of KPBLN
As its definition on POJK 12/2021, KPBLN is only acted as a liaison between the bank overseas and its customer in Indonesia. The activities that allowed for KPBLN pursuant to Article 118 paragraph (1) POJK 12/2021 are as follows:
- provide information to third parties regarding the provisions and procedures in having a relationship with the bank’s head office or branch office domiciled abroad;
- supervise collateral credit in Indonesia;
- as a power holder in contacting the agencies with regard to head office’s or branch office’s domiciled abroad needs;
- acted as supervisor of the project that was partially or entirely financed by head office or branch office domiciled abroad;
- doing promotion activities in order to introduce the bank domiciled abroad;
- provide the information regarding Indonesia’s financial economy, and/or trade to the overseas parties and otherwise;
- assist the Indonesian exporters to have overseas market access through international networks that have KPBLN or otherwise;
- increasing Indonesian project financing from overseas to financing priority sectors and regions; and/or
- other activities following the OJK considerations and/or its virtue.
C. Obligation to Submit the Activity Report to OJK
In conducting its activities, KPBLN is obligated to submit the report to OJK regarding the following aspects:
| No. | Report Aspects | Date | Description |
| 1. | KPBLN leader appointment. | 10 (ten) business days after effective appointment. | Along with appointment documents from the authorized functionary of the bank domiciled abroad. |
| 2. | The KPBLN leader that terminated, resigned, or dead. | 10 business days since the date of the termination letter, resignation letter, and/or that declared dead. | Along with the supporting documents of termination, resignation, and/or that declared dead. |
| 3. | The debtor in Indonesia received a loan and/or got the bank guarantee from the head office or branch office domiciled abroad. | 5 (five) business days in the next months after March, June, September, and December. | Submitted every quarter (position at the end of March, June, September, and December). |
| 4. | Work plan for next 1 (one) year. | The end of November. | The work plan is referred to KPBLN activities as stated in Article 118 paragraph (1) POJK 12/2021. Signed by KPBLN leader. |
| 5. | KPBLN changes of address. | 10 (ten) business days after the effective date of the change of address realization. | Along with a new KPBLN address. |
| 6. | The changes of name and/or legal entity forms of the KPBLN head office. | 30 (thirty) business days after the changes have been approved by the local authority where the head office is domiciled. | Along with supporting documents of an article of association changes (or the similar), changes of name documents, and/or legal entity forms. |
The submission of that kind of information and report must be conducted online through the OJK Reporting System. If the obligation to submit those reports in a timely manner, then KPBLN can be imposed with administrative sanctions such as limitations and/or prohibitions to conduct KPBLN activities.
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