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Good Corporate Governance
Good Corporate Governance

PREFACE

Good Corporate Governance plays a very essential role in the banking industry, considering risks and challenges faced by banking industry are becoming more complex. In order to improve the Bank’s performance, to protect the interest of stakeholders and to improve compliance with laws and regulations, Bank SBI Indonesia has been carrying out its business activities based on the five basic principles, namely: Transparency, Accountability, Responsibility, Independency and Fairness.

Report of Good Corporate Governance Implementation is a form of transparency of financial and Non-Financial condition to stakeholders, as per OJK Regulation No. 55/POJK.03/2016 dated December 7, 2016 and OJK regulation No. 13/SEOJK.03/2017 dated March 17, 2017 regarding Good Corporate Governance Implementation for Commercial Bank.

In order to ensure the implementation of 5 (Five) basic principles of GCG, Bank SBI Indonesia regularly conduct self-assessment of all aspects of GCG assessment factors, namely:

  1. implementation of Duties and Responsibilities of Board of Directors and Board of Commissioners;
  2. completeness and Implementation of Duties of the Committees;
  3. implementation of compliance function, internal audit, and external audit ;
  4. risk management Implementation including the internal control system;
  5. provision of funds to related party and large exposure;
  6. strategic plan; and
  7. transparency of Bank Financial and Non-Financial Condition.

Bank SBI Indonesia is committed to implement Good Corporate Governance (GCG) on all of its business activities at all levels and structure organization.

Henceforth, we convey the Report of Good Corporate Governance of Bank SBI Indonesia 2016, which is divided into 2 (two) parts:

  1. Transparency of Corporate Governance Implementation.
  2. Self-Assessment Result of Corporate Governance Implementation.

1.1. Number, Composition, Criteria and Independency of the Board of Commissioners and Board of Directors

Based on notary deed of Mohamad Syaiful Azhar no. 06 dated on July 28, 2016, total members of Board of Commissioners of Bank SBI Indonesia are 3 (three), which consist:

President Commissioner

Sujit Kumar Varma (*)

Independent Commissioner

Vincent Nangoi

Independent Commissioner

Nursanto (**)

(*) effective appointed since April, 2016
(**) effective appointed since February, 2016

The Board of Commissioners consists of 3 (three) persons including 2 (two) Independent Commissioners. This is in accordance with the provision that 50% of Commissioners should be independent.

All members of the Board of Commissioners have passed the Fit and Proper Test and have obtained the approval from Otoritas Jasa Keuangan (OJK).

2 (two) from total available Board of Commissioners is Independent Commissioner. 1 (one) of Independent Commissioner has a concurrent position on the non-bank company as per requirements and provisions. Meanwhile, 1 (one) member of the Board of Commissioners (President Commissioner) only conducts supervisory function in Bank as a subsidiary. Appointment of the Commissioner has considered the recommendation of Remuneration and Nomination Committee before it is proposed from General Meeting of Shareholders (GMS).

Appointment of the Commissioner has taken into account the recommendation of Remuneration and Nomination Committee before it is proposed from General Meeting of Shareholders (GMS). Commissioner has no such family kinship among Commissioner and/or Directors.

While the total members of Board of Directors of Bank SBI Indonesia are 5 (five) persons, namely:

President Director

Rizal Yamin

Vice President Director

Naresh Kumar Sharma

Director of Operations and IT

Amitabha Datta *

Director Of Business Development

Hendra Latif Kasmara Simatupang **

Director of Compliance

Sri Hartati ***

 *) effective appointed since June 10, 2016
**) effective appointed since March 28, 2016
(***) effective since September 16, 2016

All member of Board of Directors are domiciled in Indonesia. Board of Directors led by President Director originated from Independence party toward the controlling shareholder. All Members of Board of Directors of Bank SBI Indonesia shall not possess concurrent position as Commissioner, Directors or Executive Officer at Bank, company, and/or other institution as requirements toward provisions of Directors of bank. Board of Directors of Bank SBI Indonesia should also not have a family ties with each members of Directors or Board of Commissioners.  

1.2. Duties and Responsibilities of the Board of Commissioners and Board of Directors

Board of Commissioners

Implementation of Duties and Responsibilities of the Board of Commissioners are arranged in the guidelines and good governance of Board of Commissioners, including arrangement of working ethics, working hour and meeting.

Duties and responsibilities of the Board of Commissioners based on Good Corporate Governance are as follows:

  1. Ensure the implementation of Good Corporate Governance principles on every Bank’s business activity in all levels of organisation.
  2. Supervising the implementation of Directors’ duty and responsibility and providing advice for the Directors.
  3. In conducting supervision, Board of Commissioners shall provide direction, monitors, and evaluates the implementation of Bank’s strategic policy.
  4. In conducting supervision, Board of Commissioners is prohibited to get involved in decision-making of Bank operational activities, except:

    d.1. Provision of funds to concerned party as arranged within the provisions regarding Maximum Limit of Credit Provision (BMPK) for Commercial Banks; and

    d.2. Other matters that determined in the Article of Associations of Bank or prevailing acts.
  5. Decision-making by Board of Commissioner does not negate the responsibilities of Directors upon the implementation of Bank management.
  6. Commissioner ensures the Directors to follow-up all findings of Inspection of Audit Internal/SKAI Division, External Auditor, and Supervision result of Otoritas Jasa Keuangan (OJK) and/or supervision result from other authorities.
  7. Board of Commissioner shall inform to OJK for at least 7 (seven) working days after violation toward regulation or constitutions are found in Financial field and Banking or any that may jeopardize the progress of Bank business.
  8. Board of Commissioners shall possess guidelines and code of conduct, which binds to all members.
  9. Board of Commissioners shall provide sufficient time to perform their duties and responsibilities optimally and independent.
  10. Board of Commissioner shall form a committee to support its supervision, and ensure that formed committee progress effectively.

Conduct monthly coordination meeting between Board of Commissioners and Board of Directors. Board of Commissioners have recommended regarding the following:

  • Comparison of Bank Performance realization with the target from Bank Business Plan.
  • Business Development in Branch.
  • Settlement of NPL of coll 2 to coll 5, Foreclosed Collateral and Recovery of write-off credit.
  • Bank Product.
  • Business Strategy as per Bank Business Plan.
  • Infrastructure including Information Technology. Human resources from the perspective of quantity and quality, adequacy of policy and procedure.
  • Bank Operations Activity from Business, Supporting and Control Units.

Directors


Implementation of Duties and Responsibilities of the Board of Directors, which include the arrangement of working ethics, working hour and meeting.

Duties and responsibilities of the Board of Directors based on Good Corporate Governance are as follows:

  1. Board of Directors is fully responsible toward the implementation of Bank management.
  2. Board of Directors shall manage the Bank in accordance with its authorities and responsibilities as   formulated within Articles of Association and prevailing acts.
  3. Board of Directors shall implement the GCG Principles within every Bank Business Activities at all levels and organizational structure.
  4. Board of Directors shall conduct further action upon audit findings and recommendation from all Internal Audit Working Division, External Audit, Supervision result of Otoritas Jasa Keuangan, and/or Supervision result of other authorities.
  5. In order to implement principles of the Good Corporate Governance, the Board of Directors shall at least, establish Internal Audit Working Unit, Risk Management Working Unit and Risk Management Committee and Compliance Division.
  6. Directors are responsible toward its duties to shareholders in General Meeting of Shareholders (GMS).
  7. Board of Directors shall disclose, to employees, regarding strategic Bank Policies.
  8. Board of Directors are prohibited to utilize individual consultant and/or professional service as consultant, except if able to fulfill the following requirements:
    h.1. Special Project;
    h.2. Based on clear contract, which at least covers the scope of work, responsibilities and time period of working as well as expenses.
    h.3. The Consultant shall be an Independent Party  and possess qualification to work on special project.
  9. Board of Directors shall provide accurate data and information, relevant and timely to Board of Commissioners.
  10. Board of Directors shall possess guidelines and code of conduct, which binds to all members of Board of Directors.
  11. Decision of Board of Directors are conducted as per guidelines and working good governance, binding and become the responsibilities of all members of Directors.

Meeting of Board of Directors

Board of Directors meeting conducted at least weekly to determine, namely, policy and strategic decision. Any meeting decisions by the Board of Directors meeting should be implemented in accordance with the applicable work policy, guideline and prevailing code of conduct. All decision-making process in the Board of Directors meeting should be conducted based on mutual consensus.

All discussion results regarding to the meetings are stated in the minutes of meeting and documented, including the obvious disclosure of dissenting opinions that appeared during the meeting.

1.3.    MEETING OF BOARD OF COMMISSIONERS

To optimize the duties and responsibilities, Board of Commissioners held monthly meeting. Board of Commissioners Meeting required to be physically attended by all Board of Commissioner by minimum of 2 (two) or twice a year. In 2016, Board of Commissioners have conducted 13 (thirteen) Board of Commissioners meetings with presence as follows:

 

No

 

Board of Commissioners

Meeting of Board of Commissioners

Physic

Video Conference

Circulation

Absence

1

Dr. Pramod Kumar Agrawal *

-

2

-

-

2

Sujit Kumar Varma *

2

7

2

-

3

Vincent Nangoi

11

-

2

-

4

Nursanto **

10

-

2

-

 *)Mr. Sujit Kumar Varma(President Commissioner) effectively since 2016, as successor of Dr. Pramod Kumar Agrawal
**)Mr. Nursanto  (Independent Commissioner) effectively appointed since February, 2016.

To support the effectiveness of implementation of duties and responsibilities, Board of Commissioners has formed Audit Committee, Risk Monitoring Committee and Remuneration and Nomination Committee.

2.1. AUDIT COMMITTEE
2.1.a. Structure, Membership, Expertise and Independency of Audit Committee’s members

Members of Audit Committee consist of 2 (two) Independent Commissioners and 2 (two) Independent Parties. Audit Committee is chaired by Independent Commissioner. Members of Audit Committee share good integrity, altruism and morality.

All Independent Parties who become the members of Audit Committee shall not possess any financial relationship, management relationship, share ownership, and/or family relationship with the Board of Commissioners/Directors and/or Controlling Shareholders or the relationship with the Bank, which may affect their capability to act independently. In addition, all Independent Parties are not selected from the former Members of the Board of Directors or Executive Officer from Bank SBI Indonesia.

In accordance with Decree No. 004/KPTS/DIR-SBII/II/2016 dated on February 29, 2016, membership of Audit Committee consist of 2 (two) Independent Commissioners and 2 (two) Independent Parties.

1. Chairperson : Nursanto*         (Independent Commissioner)
2. Member       : Vincent Nangoi   (Independent Commissioner)
3. Member       : Erwin Mardjuni   (Independent Party)
4. Member       : Fathor Rachman (Independent Party)

*)Mr. Nursanto (Independent Commissioner) effectively appointed since February, 2016

Respective Independent Party are experts in financial/accounting field as well as expert in legal/banking.

2.1.b. Duties and Responsibilities of Audit Committee

Audit Committee responsible to provide recommendation toward Board of Commissioner in audit field, with duties as follows:

  1. Monitoring and evaluation of plan and audit implementation, in addition, to monitor toward further action of audit result in order to assess adequacy of internal control including adequacy process of financial report, its discussion is convened in Audit Committee meeting.
  2. Conduct monitoring from evaluation:
    a) Implementation of Internal Audit Working Unit
    b) Suitability of audit implementation performed by Public Accountant with the applicable audit standard
    c) Suitability of financial statement with the applicable financial accounting standard
    d) Implementation of follow up by Board of Directors upon result findings by Internal Audit Working Unit, Public Accounting and supervision result of Otoritas Jasa Keuangan (OJK)/Bank Indonesia.
  3. Audit Committee have provided recommendation in appointing Public Accountant and KAP in accordance to prevailing provisions to General meeting Shareholders (RUPS) via Board of Commissioner as in letter No. 002/SBII-SKAI/IX/2016 dated on September 26, 2016, with the appointment of Public Accountant and KAP Gani Sigiro & Handayani (Grant Thornton) to audit financial report of Bank SBI Indonesia for period of December 31, 2016 and March 31, 2017.

 2.1.c. Frequency meeting of Audit Committee Meetings.

In 2016, Audit Committee has conducted 12 (twelve) meetings. In each meeting, all decisions are conducted based on consensus and composed in minutes of meeting and submitted to the Board of Commissioners.

NO  Meeting Date of Audit Committee Meetings
1  January 28, 2016
2  February 29, 2016
3  March 28, 2016
4  April 28, 2016
5  May 23, 2016
6  June 8, 2016
7  July 27, 2016
8  August 25, 2016
9  September 26, 2016
10  October 26, 2016
11  November 28, 2016
12  December 22, 2016

2.1.d. Working Program of Auditing Committee and its Realizations 

  1. Provide recommendations upon results of inspection audit
  2. Provide recommendations upon commitment results of inspection audit – both internal & external
  3. Provide recommendation upon refinement of Audit Charter Policy as per prevailing provisions.
  4. Provide recommendations related to results of inspection SKN-BI & RTGS
  5. Provide recommendation regarding risk based bank internal audit training to all internal audit staff.
  6. Provide recommendation regarding letter management from KAP Grant Thornton related to audit financial report dated on December 31, 2015.
  7. Internal Control and mechanism of reporting to OJK.
  8. Provide recommendation regarding implementation report of internal audit principles 2016 to OJK.
  9. Provide recommendation in appointing KAP Grant Thornton to conduct annual report of financial audit period December 31, 2016 to March 31, 2017.
  10. Provide recommendation to appoint KAP Elly Noorlistyati to perform review audit of Internal Audit work results and compliance toward SPFAIB for period audit of January 1, 2014 - December 31, 2016.
  11. Provide recommendation based on Risk Based Bank Internal Audit for audit plan 2017.
  12. Provide recommendation in adjusting Policy and Procedure based on Risk Based Bank Internal Audit

2.2. RISK MONITORING COMMITTEE
2.2.a. Structure, Membership, Expertise and Independency of Risk Monitoring Committee’s Members

Members of Risk Monitoring Committee consist of 2 (two) Independent Commissioners and 2 (two) Independent Parties. Risk Monitoring Committee is chaired by Independent Commissioner. Members of Risk Monitoring Committee share good integrity, altruism and moral.

In accordance with Decree No. 003/KPTS/DIR-SBII/II/2016 date 29 February 2016, member structure of Risk Monitoring Committee consist of 2 (two) Independent Commissioners and 2 (two) Independent Party as follows:

1. Chairperson   : Vincent Nangoi (Independent Commissioner)
2. Member        : Nursanto*     (Independent Commissioner)
3. Member        : Erwin Mardjuni (Independent Party)
4. Member        : Fathor Rachman (Independent Party)

*)Mr. Nursanto (Independent Commissioner) effectively appointed since February, 2016

2.2.b. Duties and Responsibilities of Risk Monitoring Committee

Risk Monitoring Committee is responsible to the Board of Commissioners with duties as follows:

  1. Evaluate the suitability between Bank Policy and Risk Management Implementation
  2. Monitoring and evaluate the implementation of duty of Risk Management Committee and Risk Management Working Division.
  3. Monitoring the risk management implementation and policy toward risk exposure or development of Bank Performance related with the condition of risk profile including recommendations that improve the risk control rate, which noted in minutes of meeting.
  4. Monitoring and implementing duties of Risk Management Committee and Risk Management Division from Bank’s risk profile report which covers results of risk management implementation in Risk Taking Unit and system control.

2.2.c. Meeting Frequency of Risk Monitoring Committee

In 2016, Risk Monitoring Committee have conducted 12 (twelve) meetings, discussing risk profile and implementation of Risk Management.

NO Meeting Date of Risk Monitoring Committee
1  January 28, 2016
2  February 29, 2016
3  March 28, 2016
4  April 28, 2016
5  May 23, 2016
6  June 8, 2016
7  July 27, 2016
8  August 25, 2016
9  September 26, 2016
10  October 26, 2016
11  November 28, 2016
12  December 22, 2016

 2.2.d.    Working Program of Risk Monitoring Committee and its Realizations

 Risk Monitoring Committee provides recommendation to the following:

  1. Monitoring and evaluation Risk Management strategy Based on result of Bank Performance.
  2. Monitoring and evaluation of Working Plan of Risk Management in 2016 toward the improvement of Bank self-assessment to conduct assessment and determination of Risk Profile Rating.
  3. Monitoring and evaluation of the result of Bank’s assessment  towards risk profile as well as from Otoritas Jasa Keuangan result related with inherent risk and quality in risk management implementation to all types of risk.
  4. Monitoring and evaluation regarding identification of NPL risk, including Foreclosed Collateral.
  5. Monitoring and evaluation related methodology in decision making and risk assessment from credit process.
  6. Monitoring and evaluation result of RBBR results to follow up.

2.3. REMUNERATION AND NOMINATION COMMITTEE
2.3.a. Structure, Membership, Expertise and Independency of Members of Remuneration and Nomination

In accordance with Decree No. 006/KPTS/DIR-SBII/IV/2016 dated on 14 April 2016, Member of Remuneration and Nomination Committee consist of 1 (two) Independent Commissioners, 2 (one) President Commissioner and 1 (one) Executive Officer from Human Resources Division who have knowledge on remuneration and/or nomination system as well as Bank’s succession plan, as follows:

1. Chairperson  : Vincent Nangoi        (Independent Commissioner)
2. Member        : Sujit Kumar Varma  (President Commissioner)
3. Member        : Nursanto*               (Independent Commissioner)
4. Member        : Dwi Ananta W.         (Executive Officer of HR Division)

*)Mr. Nursanto (Independent Commissioner) effectively appointed since February, 2016

2.3.b. Duties and Responsibilities of Remuneration and Nomination Committee 

Remuneration and Nomination Committee formed to support Board of Commissioner in monitoring toward the policy of Remuneration and Nomination has duties and responsibilities as follows:

  1. Evaluated remuneration policy:
    - Recommendation toward Remuneration policy of Board of Commissioners and Board of Directors has been conducted on October 13, 2015.
    - Remuneration policy for Executive Officer and Employee have been submitted to Board of Directors on August 3, 2016.
  2. Formulated system and procedures of election and/or member replacement of Board of Commissioner and Directors to Board of Commissioner through memo no. 053A/DIR-COM/SKMR/XII/2016 dated on December 14, 2016.
  3. Provide recommendation for candidate of Board of Commissioners and the Board of Directors to be presented before General Meeting of Shareholders. Documentation are conducted accordingly.
  4. To provide recommendations regarding candidacy of Independent Party who will become Committee members to the Board of Commissioners.

2.3.c. Meeting Frequency of Remuneration and Nomination Committee

In 2016, Audit Committee has conducted 3 (three) meetings, namely:

NO Meeting Date of Remuneration and Nomination Committee
1  April 25, 2016
2  July 14, 2016
3  August 3, 2016

2.3.d. Working program of Remuneration and Nomination Committee and its realization

  1. Composing Remuneration Policy as per POJK No.45/POJK.03/2015 and SEOJK No.40 /SEOJK.03/2016 regarding Good Corporate Governance in granting Remuneration for Commercial Banks.
  2. Conduct analysis toward remuneration policy
  3. Provide recommendation regarding resignation and candidacy of Director
  4. Provide recommendation regarding employee salary increment in 2016.
  5. Provide recommendation regarding resignation and candidacy of Commissioner

2.3.e. Remuneration Policy

 1. Duties and Responsibilities of Remuneration and Nomination Committee are as follows:

  1.  Evaluate remuneration policy, which based upon performance, risks, fairness with peer group, target and Bank long-term strategy, fulfilment of             reserves as arranged in acts and Bank potential profit in the future;

  2. Provide evaluation result to the Board of Commissioners regarding:
    b.1. Remuneration policy for the Board of Commissioners and the Board of Directors to be presented before General Meeting of Shareholders;
    b.2. Remuneration policy for Employees in overall to be submitted to the Board of Directors;

  3. Ensure that Remuneration policy is in accordance with the  prevailing provisions; and

  4. Perform periodical evaluation toward the implementation of Remuneration policy.

 2. Remuneration that has been paid to Remuneration Committee Members in 1 year.

Remuneration Types

Members of Remuneration & Nomination Committee

Person

IDR in Million

salary, bonuses, allowance, dividend, and other non-allowance facilities in form of non-natura

 

3

 

615.756.000

Other allowance facilities in form of natura (benefit) (housing, transportation, health insurance, etc) which:

  • Available to be owned;

  • Not available to be owned.

 

 

1

 

 

18.482.100

Total

4

634.238.100

 3. Formulation process of Remuneration Policy consist of 

  1. Review the Background and Purpose of Remuneration Policy:
    a.1. To prevent risks in granting remuneration in numerous amount.
    a.2. maintain Bank’s financial stability
    a.3. ensure the granting of remuneration is accurate and able to be accounted for in the future.
    a.4. bank potential profit in the future

  2. Implementation of Review of Remuneration Policy on the previous year along with its improvement: Bank will review the granting of remuneration, types of remuneration, amount granted and evaluation that based upon performance, risks, fairness with peer group, target and Bank long-term strategy, fulfilment of reserves as arranged in acts and Bank potential profit in the future.

  3. Mechanism to ensure that Remuneration for Employees in control unit is independent in nature from supervised working unit: Upon its implementation of granting remuneration, bank have determine the scale of salary, allowance based on position level to ensure that no intervention or pressure occurred toward control unit related to granting remuneration.

4. Scope of Remuneration policy and its Implementation as per unit business, as per region, Bank SBI Indonesia implements remuneration based on classification or position level. Hence, in the implementation, granting the remuneration will depend on class or position level of employees, either in business unit, regional or branch office.

5. Remuneration related to risks, which covers :

  1. Type of Key risks that were utilized in applying Remuneration. Bank SBI Indonesia has determined 2 types of key risks in implementing remuneration policy, both Credit Risk and Market Risk.

  2. Criteria to determine the type of key risks, including risks that difficult to measure.
    - Credit Risk is a loss risk due to the inability to pay (failure to pay) from debtor toward the obligation to pay debt, either principal debt or interest or both. This Credit Risk will affect the bank strategic risks. Hence it has no effect toward bank rating. Matters that affect credit risk is the increased NPL, Foreclosed Collateral and no improvement in credit lending. Units that assigned to prevent credit risk from occurring including: Unit that in charge of Business, Unit that in charge of Credit Review and Unit that in charge of NPA, Unit that in charge of Treasury.
    - Market Risk is a risk occurs due to the decline of investment value occurred from the movement of market factors. Four market risk standard factors is capital risk, interest risk, currency risk, and commodity risk. Units that assigned to prevent treasury risk from     occurring, namely: Unit that in charge of Treasury.

  3. Impact of risk key implementation toward variable remuneration, including impact of key risk implementation toward fixed remuneration if available: Related the key risk implementation in determining remuneration policy, Bank SBI Indonesia applies the Clawback and Malus mechanism in granting Variable Remuneration.  

 6. Performance Assessment related to Remuneration:

  1. Review regarding Remuneration policy related to the performance assessment : Performance assessment is a measurement tools in evaluating performance results from respective employees. Currently, Bank SBI Indonesia use the quantitative and qualitative method to evaluate performance. For qualitative assessment, Bank SBI Indonesia approaches the Key Performance Indicator. From the assessment result, Bank SBI Indonesia will then assess the amount of salary increment.

  2. Remuneration Method related to individual: To evaluate remuneration, particularly related to gradual salary increment, the amount considers the inflation rate, adjustment to minimum salary and bank performance. Meanwhile, the increment implementation considers the performance results of all individuals.

  3. Description regarding method used by Bank to state that the agreement performance is not achieved, hence an adjustment toward the remuneration is required with the following: In adjusting the remuneration, bank considers the inflation rate of adjustment toward minimum salary and salary position towards the determined scale. Hence, bank will still provide the increment, despite  performance level is not achieved.

 7. Adjustment of Remuneration related to the performance and Risk:

  1. Currently, Bank SBI Indonesia applies the Remuneration, related Performance and Risk on variable remuneration in granting Special Bonus. Special bonus is granted based on results of recommendation from Remuneration and Nomination Committee.
  2. Granting special Bonus will be applied with the Malus and Clawback provisions on Risk Taker Material. In 2016, Bank SBI Indonesia does not provide any special bonus.

8. Adjustment of Remuneration related to the Performance and Risk : In connection with the provision of special bonus so far this year, no deferred remuneration is paid or withdrawn.

9. Bank does not use external consultant in composing Remuneration Policy

10. Remuneration package and facility received by Directors and Commissioners includes remuneration structures and total nominal details. 

Table of Remuneration package and facility received by Directors and Commissioners

Remuneration Types

Amount received within 1 (one) year

Directors

Board of Commissioners

Person

IDR in Million

Person

IDR in Million

salary, bonuses, allowance, dividend, and other non-allowance facilities in form of non-natura

7

2.818.079.008

2

494.458.750

Other allowance facilities in form of natura (housing, transportation, health insurance, etc) which:

Available to be owned;

not available to be owned.

7

1.476.722.872

-

-

Total

7

4.294.801.880

2

494.458.750

 

11. Remuneration package classified in level, which received by Directors and Commissioners in 1 (one) year, as described in the table below: 

Amount of remuneration per person in 1 (one) Year *

Number of Directors

Number of Commissioners

Above IDR 2 billion

 

 

Above Rp. 1 billion to IDR 2 billion

1

 

Above IDR 500 million to IDR 1 billion

2

 

IDR 500 million or below

4

2

 12. Variable Remuneration: In 2016, Bank SBI Indonesia did not provide any Variable Remuneration.

 13. Number of Directors, Board of Commissioners and employees receives variable remunerations in 1 year with total nominal as described in the table below:

Variable Remuneration

Amount received within 1 year

Directors

Board of Commissioners

Employee

Person

IDR in Million

Person

IDR in Million

Person

IDR in Million

 

7

-

2

-

267

-

Total

7

-

2

-

267

-

14. Positions and Number of MRT (Material Risk Takers) party

No

Title of Position

Total

1.

President Director

1

2.

Vice President Director

1

3.

Director Of Business Development

1

4.

Division Head

4

5.

Branch Manager

6

6.

Sub-Branch Manager

6

7.

Official

18

 15. Share options owned by Directors, Board of Commissioners and Executive Officer of Bank SBI Indonesia does not possess policy regarding share option:

Description/Name

Numbers of Shares Owned (Shares)

Number of Options

Option Price (IDR)

Term

 

Granted (shares)

 

Executed (Shares)

Commissioner

-

-

-

-

-

-

Directors

-

-

-

-

-

-

Executive Officer

-

-

-

-

-

-

Total

-

-

-

-

-

-

16. Highest and lowest salary ratio, which covers :

No

E x p l a n a t i o n

R a t i o

1.

Highest and lowest ratio of Employee salary

100,000.00 1

2.

Highest and lowest ratio of Directors salary

1.97: 1

3.

Highest and lowest ratio of Commissioners salary

1.33: 1

4.

Highest salary ratio of Directors and Highest ratio of Employee

1.89: 1

 17. Numbers of beneficiary and total variable remunerations guaranteed with non-requirements given by Bank to Candidate of Directors, Commissioners and/or Employees in 1 year period of working.

No

Position

Numbers of beneficiary and total variable remunerations guaranteed with non-requirements

Person

Total

1.

Candidate Director

-

-

2.

Candidate Board of Commissioners

-

-

3.

Candidate

-

-

 

 18. Number of employee involved from work termination and total severance paid as mentioned in the table below:

Total Nominal of Severance paid per person in 1 year

Total Employee

Above IDR 1 billion

-

Above IDR 500 million to IDR 1 billion

-

IDR 500 million or below

-

 19. Total Remuneration that Variable in nature that deferred, from cash and/or share or instrument in a basis of share issued by Bank.

Type of

Remuneration that Variable in nature that deferred

Person

Total

Cash

-

-

Share

-

-

Instrument with share basis

-

-

 

 20. Total Variable Remuneration that deferred, which paid in 1 (one) year.

Total Variable Remuneration that deferred, which paid in 1 (one) year.

Person

Total

-

-

 21. Detail of total remuneration granted in one year, which covers:

A. Fixed Remuneration

1. Cash

IDR 4.986.641.855

2. Share / Instrument in share basis Issued by Bank

-

B. Variable Remuneration

 

Not Postponed

Postponed

1. Cash

-

-

2. Share / Instrument in share basis Issued by Bank

-

-

 

Compliance functions in charge of Director of Compliance conducted by Compliance Working unit, which is independent from any other units. Appointment, resignation and/or relieved from duty of Board of Directors has been in accordance with the prevailing OJK regulations.

As per Bank Indonesia Regulation Number No. 13/2/PBI/2011 dated on January 12, 2011 regarding to Implementation of Compliance Function, Bank SBI Indonesia have implemented the function including precaution:

  1. Embodiment in implementing Compliance Culture on all levels of organization and Bank Business Activity.
  2. Managing Compliance Risk faced by Bank.
  3. Ensure the policy, provision, system and procedure along with business activity performed by bank is in accordance with the provision of OJK/Bank Indonesia and prevailing acts.
  4. Ensuring the Bank Compliance toward the commitment issued by Bank to Otoritas Jasa Keuangan (OJK) and/or other authorized supervision.

In order to manage the implementation of management to perform adequately and to ensure risk compliance management to be well-coordinated, Bank has appointed one of Member Directors as a Director Compliance in accordance to prevailing provisions. Below are the duties and responsibilities from Director of Compliance are as follows:

Below are the duties and responsibilities from Director Compliance:

  1. Ensuring the Bank compliance toward Otoritas Jasa Keuangan/Bank Indonesia provisions and prevailing regulations with the following:
    a.1 Provide opinion toward credit process, provide approval toward review from composing or revising policy and procedure, which conducted by Compliance working unit and Risk Management. In addition, discussion of audit result from OJK or including external parties, attending meeting of the Board of Directors and the Board of Commissioners in order to discuss Bank’s performance and other related matters.
    a.2    Fulfilling the completeness of internal work policy, guideline and procedure including conducting periodic review adjusted to the applicable provisions.
    a.3    Conduct monitoring and periodical reminder upon Bank agreement/commitment as well as conveying all determined agreement and commitment to OJK or other authorized authority.

  2. Implementation report of Director of Compliance’s duties and responsibilities has been submitted on a quarterly basis to President Director with a copy to the Board of Commissioners as per the applicable provision.

  3. To encourage the creation of Bank Compliance Culture, namely:
    c.1 Arrange socialization/roll out of compliance culture, socialization of AML & CTF and socialization of Anti-Fraud Strategy on May 12, 2016.
    c.2 Compose and convey summary for any new issued regulations from Regulator to all level of organization and cooperated with concerned working unit to propose in changing/revising or creating internal regulations to working unit in charge of System and Procedure.

  4. Every working policy, guideline and procedure have procured approval from the Board of Directors, where the compliance principles have been inherent to work policy, guideline and procedure as well as inherent to every working unit.

  5. System and procedure utilized to formulate Bank’s internal provision and Bank internal guideline as noted on policy and procedure in composing SOP as per letter of Director of Compliance of Bank SBII No. N046/DIR-COM/SKMR/XI/16 dated on November 23, 2016

  6. Bank has owned all policy, provision, system and procedure, as well as Bank’s business activities which have been already adjusted to OJK provisions and prevailing laws and regulations. Review of policy, guideline and internal procedures adjusted with the development of prevailing provisions or review that conducted annually.

  7. Monthly reminder to all working units and Branches regarding the obligation in reporting to regulator are compulsory. Compliance Division perform identification, monitoring and control toward compliance risk as conducted as per memo no. 084/DIR-COM/SKK/XII/2016 dated on December 27, 2016. Based on the compliance risk monitoring on semester II 2016, no compliance violation occurred to regulator in regards to LLL, CAR, PDN, NPL net and Statutory Reserves.

  8. Provide opinion if there is any policy and/or decision, which deviates from OJK provisions and prevailing laws and regulations, where Director of Compliance is usually involved in any management’s decision-making process.

  9. To monitor and to maintain Bank’s compliance with commitment made by the Bank to OJK or any other external parties. 

In addition, the duties and responsibilities of Division of Compliance, which have been conducted are as follows:

  1. Prepared several guidelines to support Compliance Culture in all Bank’s business activities at all levels of the organization, by organizing socialization of Compliance Culture, convey information of the new summary regulations from regulator.

  2. Conduct identification, measurement, monitoring and control towards Compliance Risk by referring to Bank Indonesia regulation regarding Risk Management Implementation for Commercial Bank.

  3. Assess and evaluate the effectiveness, adequacy and compliance of policy, provision, system or procedure owned by Bank against the applicable laws and regulations, among other things by recommending work policy, guideline and procedure adjusted to the prevailing OJK provisions and/or other prevailing laws and regulations.

  4. Review periodically toward policy, provisions, system or procedure possessed by Bank to be in accordance with the prevailing provisions.

  5. Endeavours to ensure the policy, provision, system and procedure, as well as Bank’s business activities have been in accordance with Otoritas Jasa Keuangan/Bank Indonesia provision and prevailing laws and regulations, among other things, by providing opinion on the draft of work policy, guideline and procedure received from Division of System and Procedure. In addition, Bank has formed Internal Control function on every region/city.

  6. Perform other duties related to Compliance Function, among other things, monitoring of commitment realization to Otoritas Jasa Keuangan, conducting socialization of Otoritas Jasa Keuangan provisions, compose and convey the reports related to Bank compliance and as contact person related to implementation of Bank compliance function, either internal or external.

Bank has delivered a report on the implementation of the principal duties of the Director of compliance and related parties each semester and on time, where the scope of the report is already in accordance with the prevailing Otoritas Jasa Keuangan provisions.

To reduce the violation rate in the future, Bank have endeavoured the following:

  1. To prevent errors or delay in reporting, improvement were endeavoured through enhancement of system control that is inherent on working unit that has the obligation in reporting via “four eyes principles” consistently.
  2. Working Units and Branches provide reporting lists weekly/monthly/quarterly/semester/annually).
  3. Create reminder to all working unit/branch to convey report accurately and timely.

The Bank is constantly working to build a culture of compliance in decision making and in the operational activities of the bank, namely conducting management meeting gradually and continuously by involving Director in charge of Compliance.

Function of Internal Audit conducted by Internal Audit working unit, which is independent and responsible directly to President Director and directly to communicate with Board of Commissioner and Audit Committee.

Banks have composed Audit Internal Guidelines, which has been revised to Risk Based Bank Internal Audit guidelines (RBBIA) as implementation of risk-based audit on June 24, 2016 and approved by President Director and Commissioners.

Implementations of review toward the effectiveness of Internal Audit working implementation period of January 1, 2014 to December 31, 2016, Bank have appointed KAP Ellya Noorlistyati & associates.

The duties and responsibilities of the Internal Audit, among others:

  1. Supporting President Director and Board of Commissioners’ duties in supervision by operationally elaborate planning, implementation or monitoring of audit result.
  2. Possess authority to access all activities for more relevant inspection with the performance and audit activities.
  3. Independent assessment which determined by Bank to inspect and evaluate the company activities.
  4. Conduct investigation if there is any indication of fraud.
  5. Preparing implementation reports and fragments of audit result conveyed to OJK.

During 2016, SKAI have implemented internal audit as follows:

No

Program Kerja Audit

Audit Implementation



1



Inspection of all Branches and Sub-Branches

  • Surprise cash count on all branches and sub-branches on the early year (January 2016).

  • Surprise cash count on all branches and sub-branches on the early year (December 2016).



2



Inspection of Division/Department in Head Office

  • Division HR

  • Risk Management Division

  • Corporate Secretary

  • Division Of Compliance

  • Treasury Division



3



Inspection of other activity

  • Inspection of SKNBI & BI-RTGS

  • Inspection of NPL occurred in 2015

  • Data Closed Branch (Sub-branch Nginden & HR Muhammad)









4









Other Working Plan

  • Training Risk Based Internal Audit

  • Guidelines Formulation of Risk Based Bank Internal Audit (RBBIA)

  • Socialization of Anti-fraud strategy to all employees

  • Monthly monitoring the follow-up of audit result

  • Risk Management Certification for Internal Audit Staff as per prevailing provisions

  • Meting Auditing Committee monthly

  • Composing report of Anti-Fraud Strategy, which submitted to OJK

  • Composing of Principles report of audit results, which submitted to Otoritas Jasa Keuangan

  • As Person in Charge for External Audit (Public Accountant Office, Otoritas Jasa Keuangan)

In formulating the Bank audited Financial Report in 2016, Bank SBI Indonesia have appointed Public Accountant and Public Accountant Office (KAP) listed in OJK/Bank Indonesia they are Gani Sigiro & Handayani (Grant Thornton).

Appointment of Public Accountant and Accountant Office is approved at General Meeting of Shareholders dated on November 14, 2016 based on recommendation from Audit Committee via Board of Commissioner.

Bank SBI Indonesia apply risk management process consistently on every business activity or daily banking operations to ensure the performance target is accomplished, which is become a healthy bank and develop sustainably.

In Decision-making or process of business activities, Bank SBI Indonesia is based on risk-based policy. Where all bank risk policies refer to OJK and determined based on risk appetite of the bank. Bank Management acknowledges the risk policy, as well as all related party.

Active supervision of Board of Commissioner in implementing risk management are as follows:

  1. Provide approval to the guideline of Risk Management Implementation, which covers the aspect of 5 pillars as follows:
    - Active Supervisory from the Board of Commissioners and the Board of Directors
    - The adequacy of policy, procedure, and determination of limit;
    - The adequacy of risk identification, calculation, monitoring, and control as well as the Risk Management Information System
    - quantity and quality of human resource
    - Internal control system

  2. Evaluate toward risk management policy and risk management strategy, which is reflected in recommendation in Board of Commissioners meeting or Risk Monitoring Committee meeting, where the members, including Commissioners, discuss the risk condition that inherent on Bank operations activity.

  3. Evaluate the responsibility of Directors and provide direction to improve risk management implementation, which reflected in the result of coordination meeting between Commissioners and Directors, for instance regarding credit risk management to settle NPL, implement the socialization of risk culture, compliance culture of regulation that is sustainable.

While active supervisory was already conducted with the following:

  1. Board of Directors compose policy and strategy of risk management, which is noted in the  guideline for implementation of risk management, that covers the aspect of 5 pillars from 8 type risks.

  2. Update procedure for Bank Operations activity to improve risk control system.

  3. Regarding Policy and Procedure of Bank operations activities, Bank have noted authorization from transaction approval with “Dual Control” concept or segregation of duty as risk control as per position level.

  4. Evaluation regarding the implementation guidelines of Risk Management Policy. Strategy and risk management frame are to be reviewed periodically to assess the adequacy of the guideline regarding business development or adjustment toward external regulations.

  5. Organizational Structure for implementation of risk management described that the Risk Taking Unit as Risk Owner is independent from Risk Management Working Unit, Compliance Working Unit and Internal Audit Working Unit.

  6. Responsibility toward the risk management implementation that is inherent in all Bank operations activities based on risk profile assessment, by determining the guidelines in improving risk control. It is reflected from result of Meeting of Board of Directors, which makes it compulsory that the concerned working unit is to follow up in improving risk control.

  7. Perform follow up or improvement efforts or settlements toward material risk and submit the follow up report in coordination meeting between Board of Directors and Board of Commissioners.

  8. Finding results from Internal Audit are discussed along with concerned Director to determine the improvement guidelines in the future.

  9. Socialization of risk culture, compliance risk and anti-fraud strategy have been conducted simultaneously.

Determination of limit parties risk monitoring, including:

- LLL
- NOP
- Credit concentration limit per economic sector
- Minimum Statutory Reserves (GWM)
- LCR
- Authority expense
- Securities investment
- RBBR
- CAR
- Net NPL
- PLN

Risk Identification Process is carried out by the information system for the quantitative and qualitative measurement to be made in determining risk rating and risk management as well. Applications to conduct internal identification use the following :

  - Credit Rating    
  - Credit Scoring
  - Value at RISK parties Market Risk

Internal controlling system is inherent to all working unit from three line of defence. The control element is also inherent toward policy and procedure regarding Bank operations activity.

To cultivate risk awareness; Bank implemented the activity, which held on every September 1 as “Risk Awareness Day”.

Strategic Plan of Bank SBI Indonesia is arranged in form of Business Plan as per vision and mission of Bank.

Business plan composed realistic, comprehensive, measured by taking into account the rate of composite risk, taking into account the prudential principles and responsive toward internal and external changes that affected the Bank business.

Composition of Bank business plan is based on Bank’s policy and strategy, namely management policy, risk management policy and compliance, business development strategy that refer to the guidelines from the provisions of OJK with taking into account the following:

a. External and internal factors that affect the continuance of Bank’s business.
b. Prudential Principles
c. Implementation of Risk Management
d. Sound Banking Provisions.

Business Plan of Bank SBI Indonesia has been approved by Board of Commissioners and Board of Directors, after communicating the plan to Shareholders and all level of organization in Bank.

Commissioner implements the supervision toward bank business based on report of bank performance and discussed in coordination meeting.

Bank SBI Indonesia has provided all financial and non-financial condition transparently within all reports delivered to other external partly.

A. SHARE OWNERSHIP, FINANCIAL RELATIONSHIP AND FAMILY RELATIONSHIP BETWEEN THE BOARD OF COMMISSIONERS AND DIRECTORS

No members of the Board of Commissioners and Directors possess 5% or more of share in Bank and other companies located in domestic and foreign countries.

All members of the Board of Commissioners and Directors have no financial relationship and family relationship with other members of the Board of Commissioners and Directors and/or the Controlling Shareholders of the Bank.

B. SHARES OPTION AND BUY BACK SHARES

During 2016, there are no any shares option and buy back shares performed by members of the Board of Commissioners, the Board of Directors, Executive Officer and Bank’s employees.  In accordance with Article of Association of Bank SBI Indonesia, there is no any regulation concerning share option and buy back shares.

C. CONFLICT OF INTEREST, INTERNAL FRAUD AND LEGAL ISSUES

During 2016, there were no report of transaction performed by the Board of Commissioners, the Board of Directors and Executive Officers which contained conflict of interest.

Bank has policy, system and procedure for the settlement of conflicts of interest that binds every member of management and employee of Bank. With the issuance of policy on conflict of interest, it will expectedly reduce the loss risk level to Bank.

 

No.

Name and position of person involved in the conflict of interest

Name and position of decision maker

Types of transaction

Transaction value (in million Rupiah)

Description

-

Nil

Nil

Nil

Nil

Nil

 

Internal Fraud in 1 year

Number of cases committed by

 

Management

Permanent Staff

Non-Permanent Staff

 

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Total Fraud

0

0

0

0

0

0

Settled

Nil

Nil

Nil

Nil

Nil

Nil

under settlement in internal bank

Nil

Nil

Nil

Nil

Nil

Nil

Settlement have yet conducted

Nil

Nil

Nil

Nil

Nil

Nil

Already followed-up through legal process

Nil

Nil

Nil

Nil

Nil

Nil

 

 

Legal Issues

Case Numbers

Civil

Crime

Received the verdict, which has a binding legal force

3

-

In an on-going process

-

-

Total

3

-

 

E. GRANT OF FUNDS FOR SOCIAL ACTIVITIES AND POLITICAL CATIVITY

Bank SBI Indonesia does not provide any funding for political purposes. Funding for social/education activities in 2016 are as follows:

  • Charity to impoverished people in desa nelayan, Tanjung Rejo through the Association of Bank Casher in Medan (ASKAMED) of IDR 1.800.000,-
  • Charity for orphans and dhuafa, cooperated with BAPEKIS - Graha Mandiri of IDR 6.000.000,-
  • Charity for Orphanage, in cooperation with Ikatan Bankir Indonesia (IBI) with total amount of 2.500.000,-
  • Donation in form of free writing books to support schools in need via UNESCO amounting IDR  20 million.
  • Donation to Indian Women’s Association of IDR 2 million.

Self-Assessment Result of GCG Implementation

 

Rating

Rating Definition

 

 

Individual

 

 

2

Bank SBI Indonesia have implemented Good Corporate Governance and in general considered as satisfactory. This is reflected from the adequate fulfilment of Good Corporate Governance principles. If there is weakness in the implementation of Good Corporate Governance principles, generally such weakness is less significant and can be solved with normal action conducted by Bank’s management.

Analysis

Comprehensive Conclusion of Governance Structure, Governance Process and Governance Outcome:

Bank strives to make efforts to implement GCG in accordance with the provision. Follow-ups to be conducted by bank for the purpose of implementing GCG in a good manner including:

  • The Board of Commissioners and Directors have made efforts and defined strategies in order that financial or non-financial performance agreed in Bank’s Business Plan can be achieved.

  • Monitoring of Realisation compared to target in Bank’s Business Plan is discussed in the meeting of the Board of Directors or related Working Unit, thus corrective actions can be implemented to tide away obstacles.

  • Conducting continuous efforts towards credit governance thus NPL ratio can be controlled as per Bank’s Business Plan including an effort to settle non-performing loan or foreclosed collateral, given the fact that this affect the earnings and bank capital factors.

  • Conducting an effort in order that any similar internal or external audit finding will not occur by conducting corrective actions, among other things: revising policy and procedure, improving Direct Supervisory Function, forming Internal Control Unit to audit daily transaction. Improvement of role of Internal Control for inspection of daily transaction.

 
 
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Thank you! Your submission has been received!
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08001724636
02139838747

You are visitor number :

For More Information Please Contact 
Gedung Graha Mandiri Lantai 11, 15 & 24 
Jl.Imam Bonjol No.61.
Jakarta Pusat 10310 - INDONESIA 
Email : birdireksi@sbiindo.com 
Tel : +6221.39838747 (hunting)
Fax : +6221.39838750
+6221.39838751 - 39833778