The legislation in Indonesia has facilitated legal entities and individuals to apply for loans or credits in foreign currency from non-Indonesian residents. Therefore, Indonesian companies in need of capital to expand their businesses can apply for loans from foreign banks.
Transactions in applying for loans or credits with foreign banks are referred to as Foreign Exchange Transactions. This is further regulated through PBI No 21/02/PBI/2019 Regarding Monitoring of Bank and Customer Foreign Exchange Transactions (PBI 21/2019). Referring to Article 11 paragraphs (1) and (2) of PBI 21/2019, Bank Indonesia has a role in indirectly inspecting and supervising Foreign Exchange Transactions. Bank Indonesia’s supervision takes the form of receiving and analyzing reports submitted periodically by debtors.
The types of Foreign Exchange Transaction reports that debtors must submit include:
- transactions of trade in goods, services, and other transactions between Residents and non-Residents
- basic data of Foreign Debt and/or Risk Participation Transactions
- plans for withdrawal and/or payment of Foreign Debt and/or Risk Participation Transactions
- realization of withdrawal and/or payment of Foreign Debt and/or Risk Participation Transactions
- position and changes of Foreign Financial Assets, Foreign Financial Liabilities, and/or Risk Participation Transactions; and/or
- new Foreign Debt plans and/or changes thereto.
In conducting supervision of Foreign Exchange Transaction Reports, Bank Indonesia may appoint other parties to conduct such research. Debtors who cannot provide explanations for the evidence and supporting documents of their reports will have their reports considered inaccurate. Meanwhile, Debtors who fail to submit Foreign Exchange Transaction reports will be declared as not submitting reports.