OJK Sets Foreign Worker Controls for Commercial Banks

OJK established POJK 1/2026 on 6 February 2026. It was promulgated and took effect on 23 February in State Gazette No. 3/OJK, replacing POJK 37/POJK.03/2017. The rule applies to conventional and sharia commercial banks, sharia business units, Indonesian branches of foreign banks and foreign-bank representative offices, while preserving the separate manpower and immigration requirements that govern foreign employment and stay permits.

Eligibility depends on ownership and control. A bank with at least 25 percent ownership by foreign individuals or legal entities may use foreign workers as directors, commissioners, executive officers, in certain special-competency positions, and as experts or consultants. A bank below 25 percent is generally limited to experts or consultants. The broader director and commissioner route remains available where a foreign party is a controlling shareholder or foreign control otherwise exists. A bank must maintain an Indonesian majority among directors and executive officers and at least 50 percent Indonesian representation among commissioners.

Foreign-bank branches may use foreign workers only as branch leaders and experts or consultants, and at least one branch leader must be Indonesian. A foreign-bank representative office may use foreign workers only as its head and as experts or consultants. Permitted work functions include treasury, risk management, information technology, credit or financing, investor relations, marketing, finance and internal audit. Human resources and compliance functions are prohibited, except for an overseas office owned by the bank. OJK can approve another position or function for special conditions.

The approval sequence is important. A foreign director, commissioner, foreign-bank branch leader or representative-office head needs OJK approval before taking office and before the RPTKA application. Foreign executive officers and employees in specified special-competency positions also require OJK approval before RPTKA. OJK decides a complete application within 30 working days. Banks should not treat a corporate appointment, employment contract or immigration filing as a substitute for that prior approval.

Foreign executive officers, special-competency employees, experts and consultants are generally subject to a cumulative five-year limit in the same bank or office for the same role and function. A break counts toward that limit unless it lasts at least three years. An extension beyond five years requires OJK approval and depends on satisfactory performance, a highly specific competency unavailable domestically and overseas assignments for Indonesian employees. The extension filing is due at least 30 working days before expiry.

Knowledge transfer is mandatory. A bank must appoint at least two internal Indonesian counterparts for each covered foreign worker, while a foreign-bank representative office must appoint at least one. The program must include counterpart training and teaching or training delivered by the foreign worker. A bank using foreign workers must also send Indonesian employees abroad continuously for competency development and talent exchange. Performance, counterpart evaluation, knowledge-transfer results and the intended Indonesian successor form part of the realisation reporting.

Reporting is split by role. An approved foreign executive officer or special-competency employee must be reported within 10 working days after the effective appointment, with the contract, limited stay permit, approved RPTKA and other required evidence. Expert and consultant information is included in the business-plan realisation report. Banks must report foreign-worker realisation at least annually at the fourth-quarter position and update it in the nearest quarter if the position changes sooner.

The transition protects existing approvals only for their stated term. A bank may continue using a foreign worker under an OJK approval granted before 23 February 2026 until that approval expires. An application pending on that date follows the former approval mechanism. A qualifying foreign executive officer, expert or consultant who had served for less than five years may seek an extension up to the five-year limit under the new procedure. Banks should therefore classify each existing worker by approval date, role, cumulative service, counterpart record and next filing deadline.

Enforcement reaches both the institution and responsible principal parties. OJK can issue written warnings, lower a bank's governance assessment, restrict a representative office, fine a bank between IDR 500 million and IDR 2 billion, or fine a representative office between IDR 10 million and IDR 100 million. Directors, commissioners, branch leaders and representative-office heads may also be barred under fit-and-proper reassessment rules. A controlled register linking OJK approval, RPTKA, stay permit, term, counterpart evidence and reporting dates is the practical compliance baseline.