Indonesia Ojk To Supervise Employment Of Expatriates In The Banking Sector.

13 April, 2013 

 

In July 2017, the Indonesia Financial Service Authority (Otoritas Jasa Keuangan – “OJK”) issued regulation No. 37/POJK.03/2017 on the Employment of Expatriates and Transfer of Knowledge Program in the Banking Sector, along with its implementing regulation, the OJK Circular Letter No. 42/SEOJK.03.2017 (“OJK Regulations”). Although these regulations supersede the Bank of Indonesia Regulation No. 9/8/PBI/2007, there have been no substantial changes made to the key provisions (other than the fact that supervision duties have been transferred from the Bank of Indonesia to the OJK). Below are the key provisions introduced by the OJK Regulations: 

 

Expatriate Position

 

1.  For any bank with a minimum of 25% foreign ownership, expatriates are eligible to take the following positions: director, commissioner, executive officer, and/or expert advisor or consultant; 

 

2. For any bank with less than 25% foreign ownership, expatriates may take up the position of expert advisor or consultant. (Note that if a foreign shareholder of such a bank serves as a controlling shareholder or the bank is directly or indirectly controlled by foreign entity/foreign citizen, expatriates may also take up the position of director, commissioner, and/or expert advisor or consultant);

 

3. Expatriates are permitted to be head of a representative office of a bank or expert advisor or consultant to the representative office; 

4. Expatriates are permitted to be head of a branch office of a bank or expert advisor or consultant to the branch office; and 

5. Expatriates are prohibited from holding positions in human resources or any compliance department.

 

Expatriate Function

 

Expatriate employees may only be employed to carry out treasury, risk management, information technology, lending and financing, investor and customer relations, marketing, and finance functions. 

 

Other Key Requirements

 

For the purpose of facilitating the transfer of knowledge, the bank (as the employer) should appoint at least two Indonesian employees for every expatriate who holds a position as executive officer and/or expert advisor or consultant to be his/her working associate. 

 

The employment of expatriates will require the approval of OJK banking (a division/commissioner within the OJK who has regulatory and supervisory authority and functions in respect of the banking business sector). 

 

Other positions or functions may only be carried out after obtaining approval from OJK banking for such position or function.