Jakarta. As many as 20 rural banks (BPR) were shut down by the Financial Services Authority (OJK) in 2024 after shareholders and management failed to implement effective recovery efforts.

“OJK is currently bound by the Financial Sector Development and Strengthening Law (UU P2SK), which states that a bank under recovery cannot maintain that status for more than one year,” said OJK's Executive Head of Banking Supervision, Dian Ediana Rae, on Tuesday in Jakarta.

Dian explained that the revocation of operating licenses for these banks was not done arbitrarily. The regulator has consistently monitored the recovery plans implemented by the BPRs and their controlling shareholders. Corrective actions such as capital injections, corporate restructuring, and consolidations were among the recovery efforts made.

“The success of these recovery plans by BPRs and their controlling shareholders determines whether a bank under recovery can return to normal status or transition into a resolution phase,” Dian said.

OJK reported that most BPRs in Indonesia are in normal condition. However, Dian emphasized the importance of detecting early signs of trouble that could threaten their viability.

As of Dec. 17, the following BPRs had their licenses revoked: BPR Arfak Indonesia, BPR Kencana, BPR Pakan Rabaa Solok Selatan, BPR Duta Niaga, BPRS Kota Juang Perseroda, BPR Nature Primadana Capital, BPR Sumber Artha Waru Agung, BPR Lubuk Raya Mandiri, BPR Bank Jepara Artha, and BPR Dananta.

Additionally, BPRS Saka Dana Mulia, BPR Bali Artha Anugrah, BPR Sembilan Mutiara, BPR Aceh Utara, BPR EDCCASH, Perumda BPR Bank Purworejo, BPR Bank Pasar Bhakti, BPR Madani Karya Mulia, BPRS Mojo Artho, and Koperasi BPR Wijaya Kusuma also had their licenses revoked.

By September 2024, the Deposit Insurance Corporation (LPS) had disbursed a total of Rp899.37 billion in deposit payouts to customers of 15 BPRs, covering 108,288 customer accounts. Following verification, LPS confirmed that 99.23 percent of the accounts, or 107,457 accounts, were eligible for payouts, with a total of Rp 719.37 billion in eligible deposits.