Regulation Watch · Business Licensing · Indonesia. The amendment applies nationally to conventional commercial banks, sharia commercial banks and sharia business units. The underlying GWM framework includes Indonesian branches of banks headquartered outside Indonesia.
Bank Indonesia Cuts Rupiah Reserve Requirements in Two Stages
PADG 36/2026 reduces average rupiah reserve requirements for conventional and sharia commercial banks from 1 November and again from 1 December 2026, while also reducing the remunerated or incentivised portion from December.
- Published
- Bank Indonesia established and officially published PADG 36/2026 on 30 October 2026. Bank Indonesia does not identify a separate State Gazette promulgation date for this PADG.
- Effective
- 1 November 2026. The first reduction applies on that date, followed by a second reduction and revised remuneration or sharia incentive limits from 1 December 2026.
- Added to Watch
- 31 October 2026
Who is affected
Conventional and sharia commercial banks, sharia business units and Indonesian branches of foreign banks; foreign bank head offices and controlling shareholders; directors, commissioners and sharia supervisory boards; and treasury, asset-liability management, finance, risk, regulatory reporting and compliance teams.
Practical impact
The average rupiah GWM for conventional commercial banks falls from 9 percent to 8 percent on 1 November and to 7 percent on 1 December 2026. For sharia commercial banks and sharia business units, it falls from 7.5 percent to 6.5 percent and then to 5.5 percent on the same dates. From 1 December, the portion eligible for remuneration for conventional banks falls from a maximum of 7 percent to 5 percent. The portion eligible for the sharia GWM incentive falls from a maximum of 5.5 percent to 3.5 percent. The change releases part of the liquidity previously maintained as average reserves, but does not remove the bank's daily monitoring, calculation, reporting, prudential or sanction controls under the consolidated GWM framework.
Bank Indonesia established and published PADG 36/2026 on 30 October 2026 and made it effective on 1 November. The regulation is the fifth amendment to PADG 24/8/2022 on rupiah and foreign-currency reserve requirements for conventional commercial banks, sharia commercial banks and sharia business units.
The scope includes Indonesian branches of banks headquartered outside Indonesia under the underlying definition of a bank. The immediate compliance work therefore reaches local treasury and reporting teams as well as the foreign head office or group function responsible for liquidity, capital and risk oversight.
The average rupiah reserve requirement for a conventional commercial bank falls from 9 percent to 8 percent on 1 November and then to 7 percent on 1 December. The corresponding requirement for a sharia commercial bank or sharia business unit falls from 7.5 percent to 6.5 percent and then to 5.5 percent.
The December stage also changes the economics of the reserve balance. For conventional banks, the part of average rupiah GWM eligible for remuneration falls from a maximum of 7 percent to 5 percent. For sharia banks and sharia business units, the part eligible for the sharia incentive falls from a maximum of 5.5 percent to 3.5 percent.
The lower percentages can release liquidity that was previously maintained as average reserves. They do not determine how a bank should deploy that liquidity, and they do not displace capital, liquidity, asset-liability, concentration, credit, market, consumer-protection or governance requirements. Any redeployment should remain within the bank's approved business plan, risk appetite and prudential limits.
Implementation requires more than a policy note. Treasury engines, regulatory reports, internal dashboards and first-line monitoring should be effective-dated for both stages. Finance and asset-liability teams should separately calculate the effect on reserve balances and remuneration, while compliance should verify any macroprudential incentive or special-case treatment before the first live calculation.
The amendment changes percentages but does not remove the consolidated calculation, reporting and sanction framework. A bank should continue daily and average GWM controls, preserve evidence of parameter approval and first-cycle reconciliation, and escalate any shortfall or data error under the existing Bank Indonesia process.
Required action
- Update rupiah GWM parameters, daily liquidity dashboards, treasury forecasts and regulatory calculations before the 1 November and 1 December implementation dates.
- For conventional banks, model the reduction from 9 percent to 8 percent and then 7 percent, together with the 1 December reduction in the maximum remunerated portion to 5 percent.
- For sharia commercial banks and sharia business units, model the reduction from 7.5 percent to 6.5 percent and then 5.5 percent, together with the 1 December reduction in the maximum sharia incentive portion to 3.5 percent.
- Reconcile the revised percentages with any applicable macroprudential liquidity incentive, excluded deposit component, merger, conversion, liquidity-facility or other special treatment before calculating the actual reserve obligation.
- Complete maker-checker testing for treasury and regulatory-reporting systems and preserve evidence of parameter approval, effective dating and first-cycle reconciliation.
- Report the liquidity and earnings effect to directors, commissioners and the relevant group or foreign head office, and keep any redeployment of released liquidity within approved risk appetite and prudential limits.
- Continue testing daily and average reserve compliance and the applicable sanctions under PADG 24/8/2022 as amended rather than treating the lower percentage as a general exemption.