Strengthening capital aspect is aimed at improving the ability of banks to absorb the risk in the event of a crisis, thus creating a sound banking system and is able to compete nationally and internationally. Bank of Indonesia (BI) to re-adjust the provisions of the CAR (Capital Adequacy of Commercial Banks) set out in Regulation (Regulation of Bank Indonesia) No.15/12/PBI/2013 .
Regulation of Bank Indonesia is intended to strengthen bank capital aspects both in quality and quantity that is adapted to the prevailing international standards, ie Basel III .
In terms of quality, Regulation of Bank Indonesia also provides for adjustment of the components and requirements of capital instruments as well as adjustments to capital ratio. In terms of quantity, regulated the establishment of liability additional capital as a buffer (buffer). Supplementary capital consists of Capital Conservation Buffer, Countercyclical Buffer, and Capital Surcharge (specifically for Domestic Systemically Important Banks / D - SIB) .
In BI press release, in Jakarta, Thursday, December 19, 2013, explained, strengthening the capital aspect is aimed at improving the ability of banks to absorb the risk in the event of a crisis, so as to create a sound banking system and able to grow and compete nationally and internationally, particularly face the Asean Economic Community ( AEC ) in 2015. In addition, the implementation of Basel III is also a form of fulfillment of the commitment of Indonesia as a member of the G - 20 and the Basel Committee on Banking Supervision (BCBS).
Broadly speaking, there are three main points set out in the Regulation which will apply from 1 January 2014. First, improving the quality of capital through changes in the component settings and equity instruments in accordance with the requirements of the Basel III framework. The provision requires that the components of bank capital consists of core capital components (Tier 1) and supplementary capital (Tier 2). Components of Core Capital (Tier 1) was divided into two, namely the main core capital (common equity Tier 1 ) and additional core capital (Additional Tier 1) .
Second, banks are required to provide core capital (Tier 1) minimum of 6% of RWA and the main core capital (Tier 1 Common Equity) minimum of 4.5 % of risk weighted assets, both individually and on a consolidated basis with its subsidiaries.
Third, banks that meet certain criteria required to establish additional capital as a buffer (buffer) above the appropriate minimum capital adequacy risk profile. Banks belonging to the Commercial Bank Business Activity (BOOK 3 , and BOOK 4), are required to establish Capital Conservation Buffer, the additional capital of 2.5 % (two point five percent) of the RWA that serves as a buffer (buffer) in the event of a loss in period of crisis .
In addition, all banks are also required to establish Countercyclical Buffer , additional capital percentage is set by the authorities in the range of 0% to 2.5 % of risk weighted assets that serve to anticipate losses in the event of excessive credit growth and potentially disrupt the stability of the financial system .
As for banks belonging Domestic Systemically Important Banks ( D - SIB ) shall establish a Capital Surcharge . This is an additional capital buffer that percentage is set by the authorities in the range of 1% to 2.5 % of risk weighted assets which serves to reduce the negative impact on the stability of the financial system and the economy in the event of failure on the D - SIB