Act No. 7 of 1992 Concerning Banking


(amended through 1998)

Act No. 7 of 1992 Concerning Banking provides a regulatory framework for banking in Indonesia and was later amended by Act No. 10 of 1998.

The act is organized in ten chapters:

  • Chapter 1 General Provisions;
  • Chapter 2 Principle, Function, and Objective;
  • Chapter 3 Categories and Operations of Banks;

  • Chapter 4 Licensing, Form of Legal Entity, and Ownership; 
  • Chapter 5 Supervision;
  • Chapter 6 Board of Commissioners, Board of Directors, and Expatriates;
  • Chapter 7 Bank Secrecy;
  • Chapter 8 Penal Provisions and Administrative Sanctions;
  • Chapter 9 Transitional Provisions;
  • Chapter 10 Concluding Provisions.

In particular, the act permits two categories of banks: commercial banks and rural banks, and details the types of activities to be performed by each type. The act stipulated in 1992 that all non-bank financial institutions with licenses must transform into banks within a one year period. The act was a marked shift from banking regulation of the past as it repealed prior bank related acts from the 1960s. Amendments to the act in 1998 allow for a dual banking system which includes Syariah (Islamic) principles.

DISCLAIMER: The attached document is an unofficial translation of Bank Indonesia Regulation No. 8/5/PBI/2006. An official translation is unavailable.