Bank Indonesia’s move to improve timeliness of monitoring
This comment piece outlines the impacts of Indonesia’s LBU 2008 announcement and its approaching deadline
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Bank Indonesia (BI), the country’s central bank responsible for formulating monetary policy and supervising payment and banking systems announced an update to the Laporan Bulanan Bank Umum (LBU) banks’ monthly reports regulation on the 5th February 2010. The LBU regulation is part of the financial reporting series. It comprises of balance sheets (LBU_01), income statistics (LBU_02) and details of the items on LBU_01 & LBU_02 i.e. cash, placement to BI, placement to other banks etc.
BI stated that from the end of January 2011 all reports must be submitted within 5 days of the deadline and that failure to do so will result in fines
Shawn Paul, Product And Services Director, FRSGlobal commented:
“The recent Laporan Bulanan Bank Umum (LBU) update issued by Bank Indonesia is another example of how regulators around the world are pushing for timely and accurate reporting in support of a more robust governance framework.
It is very likely that this regulator could require fully automated regulatory reporting with minimal human intervention in the near future. We have seen similar moves in the APJ region with the RBI in India asking banks to fully automate their reporting in the 6-24 month time frames. These more stringent requirements, while beneficial for the financial sectors stability, will cause the smaller banks primarily constructed with foreign banks and branches substantial challenges to comply.
FRSGlobal understands the head count and cost challenges faced by small branches and foreign bank operations around the region and will look to partner with them over the coming months to solve these challenges.”
