Indonesia Legal Frameworks on Electronic Money Issuance
On 4 May 2018, Bank Indonesia (“BI”) issued BI Regulation No. 20/6/2018 regarding Electronic Money (“PBI 20/18”). This regulation replaces the previous BI regulations on the same subject;
- PBI 11/12/PBI/2009;
- PBI 16/18/PBI/2014, and
- PBI 18/17/PBI/2016.
The following are some of the essential provisions introduced by PBI 20/18:
E-money issuer license application: PBI 20/18 provides that a company may apply for e-money issuer license directly to BI, without firstly obtaining a business license from the Online Single Submission (OSS).
Foreign ownership limitation: PBI 20/18 expressed that maximum foreign ownership – either directly or indirectly – in an e-money issuer company is 49 %. During the licensing application process, BI will assess the ownership of the e-money issuer company up to the ultimate shareholder level.
Fit and proper test requirements: Any controlling shareholder (i.e shareholder who owns a shareholding of at least 25 % in the e-money issuer company, or, any shareholder who owns less than 25 % shareholding but has direct/indirect control over the e-money issuer company), director and commissioner of the e-money issuer company is subject to fit and proper test conducted by BI.
Change of control restriction: PBI 20/18 restricts any change of control of the e-money issuer company within 5 (five) years since the issuance of the e-money issuer license. Nevertheless, in certain conditions, such restriction may be waived with prior approval from BI.
Minimum capital requirements: An e-money issuer company is required to have its issued and paid-up capital of at least IDR 3,000,000,000 (around USD 205,000). The company is also required to increase its issued and paid-up capital depending on the increase of the float funds it manages.
We believe that BI will be issuing the implementing regulations for this PBI 20/18 to replace the existing BI circular letter(s) on e-money. I assume that BI will process the new licensing applications after the issuance of the implementing regulations of PBI 20/18.
The article above was prepared by Marshall S. Situmorang (Partner).