Admin / Friday, 24 July 2020, 09:17

The Financial Services Authority ("OJK") issued Regulation No. 11/POJK.03/2020 concerning National Economic Stimulus as a Countercyclical Policy on the Impact of the Corruption Virus Disease 2019 ("POJK 11/2020") and Regulation No. 14/POJK.04/2020 concerning Countercyclical Policy on the Impact of Corruption Virus Disease 2019 for Nonbank Financial Services Institutions ("POJK 14/2020") to maintain financial system stability, and support economic growth as a result of the spread of Coronavirus Disease 2019 (COVID-19). One of the countercyclical policies on POJK 11/2020 and POJK 14/2020 as an economic stimulus is the granting of credit/finance restructuring to debtors.

Debtor's Criteria

Debtors who can apply for credit/finance restructuring are debtors which have difficulty to comply with obligations of Banks/Nonbank Financial Services Institutions (LJKNB) due to the impact of COVID-19 spreads, both directly and indirectly, such as:

  1. Debtors are individuals who are stated as positive patients infected with COVID-19, patients under surveillance (PDP), or people under surveillance (ODP);
  2. Debtors own businesses in the economic sector which directly affected by COVID-19 spreads, such as motorcycle taxi driver and a street vendor with significant decreasing business income during the implementation of large-scale social restrictions, including debtors who working at hotels in tourism areas encounters termination of employment;
  3. Debtors own businesses in the economic sector which indirectly affected by COVID-19 spreads so that the Debtor has difficulty fulfilling obligations to the Bank/LJKNB according to the agreement, such as the significant decrease in export and import volume due to the linkages of supply and trade chains, as well as the obstructing infrastructure development projects carried out by Debtors due to the cessation of the supply of raw materials, labor, and machinery from other countries that have been affected by the spread of COVID-19.

OJK provides authority for Banks and LJKNB which implement credit/finance restructuring policy to set up guidelines containing criteria for determining debtors and the economic sector affected by the COVID-19 spreads. Thus, the criteria for determining the debtor affected by each Bank/LJKNB can differ from one another.

Credit/Finance Restructuring Scheme

Credit/finance restructuring can be done according to OJK regulations related to asset quality assessment, with the following scheme:

  1. Decrease in interest rates;
  2. Extension of time period;
  3. Partial payment delay;
  4. Reduction of principal arrears;
  5. Reduction of interest arrears;
  6. Addition of credit/financing facilities;
  7. Conversion of sharia financing contracts;
  8. Conversion of financing to temporary equity participation.

The choice of the credit/finance restructuring scheme is left entirely to the Bank /LJKNB and depends on the results of the identification of the debtor's financial performance or the assessment of the business prospects and the debtor's repayment capacity. The period of restructuring depends on the results of the Bank's assessment of the debtor with a maximum term of 1 (one) year.

Submission Period

The application of credit/finance restructuring policy for COVID-19 affected Bank debtors is valid until 31 March 2021, while for LJKNB debtors will be valid until 17 April 2021. Submission of credit/finance restructuring for the COVID-19 spreads impacts can be made within those abovementioned time period.

Requirements and Implementation Mechanism

The implementation of credit/finance restructuring is prioritized for debtors who have good faith and are affected by COVID-19 spreads, with such requirements and implementation mechanism as follows:

  1. The debtor is required to submit a restructuring application by completing the data requested by the Bank/LJKNB which can be submitted online (email/website determined by the Bank/LJKNB) without having to come face to face;
  2. The Bank/LJKNB will conduct an assessment of the debtor including the fulfillment of COVID-19 affected debtor criteria, historical principal/interest payments, clarity of collateral control;
  3. The Bank/LJKNB grants restructuring based on the debtor profile to determine the restructuring scheme or the extension of time and the amount that can be restructured based on the assessment and/or discussion, by considering the income of debtors affected by COVID-19. Information on restructuring approval from the Bank/ LJKNB is submitted online or via the relevant Bank/LJKNB’s website.


Credit/finance restructuring policy for Bank/LJKNB debtors on POJK 11/2020 and POJK 14/2020 is aimed for debtors which directly or indirectly affected by the COVID-19 spreads based on the guidelines owned by each Bank/LJKNB in accordance with OJK regulations concerning asset quality assessment.


For more information and details, do not hesitate to contact our lawyers.