Indonesia central bank beefs up requirements for large outgoing forex transfers

[JAKARTA] Indonesia's central bank told banks on Monday to attach an underlying document for any large outgoing transfer of foreign currencies starting in November.

Indonesian banks routinely report their foreign exchange traffic to Bank Indonesia (BI). The new regulation requires them to add a supporting document detailing the purpose of every transfer of foreign currencies worth more than US$100,000.

Therefore, banks must ask customers for such a document before processing a transfer.

BI said in a circular letter that the new regulation was issued "to support more transparency and to increase the amount of information available regarding foreign exchange traffic".

BI listed the documents it would accept, which include export and import documents, purchase agreements, loan agreements, invoices for various transactions, proof of a deposit account in an offshore bank and an estimate of living costs abroad.

In case a client does not have such documents, they must write a letter stating the purpose of the transaction.

Banks are to attach the documents along with their routine report to the central bank starting in December, which would detail their foreign exchange traffic in November.

A bank which accepts an order for a large transfer without proper supporting documents faces a fine of 5 million rupiah (S$531.34) for every transfer. Customers who do not attach a supporting document may be fined a maximum 50 million rupiah.

The penalties will not apply until April 2017.

REUTERS