The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has regulated on Regulation No. 18/POJK.03/2020 of 2020 on Written Orders for the Mitigation of Bank Problems (“Regulation 18/2020”) various provisions relating to the issuance of written orders to banks instructing them to initiate and/or accept mergers, consolidations, acquisitions and/or integrations (“Corporate Actions”) to stabilize the financial system during the ongoing COVID-19 pandemic and/or to deal with the threat of an economic/financial crisis. Aforesaid provision shall address the following matters:

1. Criteria for banks which may be ordered to implement Corporate Actions;

In general, in accordance with OJK assessments, banks that are suffering from financial issues shall implement Corporate Actions.

2. Follow-up measures for banks that have received written orders;

Banks that are instructed to undertake Corporate Actions shall prepare Corporate Actions plans and ensure its implementation.

3. Requirements and procedures for the implementation of ordered Corporate Actions; and

There are specific procedures to implement Corporate Actions in regards of Covid-19 pandemic, aside from the existing regulations.

4. Administrative sanctions.

Sanctions such as reprimands, change of bank status, business activities suspension, and prohibition may be imposed.

For further inquiries and assistance relating to Corporate Actions’ Obligation upon banks shall be available through contact to our associate specializing in banking law, Ms. Lydia Ester Sibarani ([email protected] or [email protected]).

Source  :     ‘Imposition of Mandatory Corporate Actions upon Banks: An Attempt to Mitigate the Impact of the Covid-19 Pandemic upon the Stability of the Financial System’, Indonesian Legal Brief, 18 May 2020, Accessed 19 May 2020, (www.hukumonline.com).