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Good Corporate Governance
Good Corporate Governance

 FOREWORD

PT. Bank SBI Indonesia strived to realize that the rapid development of the banking industry and the increasing complexity of the business of the Bank will increase the risk exposure faced by the Bank. Consider the increasing risks and challenges to be faced, Bank SBI Indonesia is committed to implement good corporate governance in conducting its business.

Implementation of Good Corporate Governance in addition to improving the Bank’s performance, as well as to protect the interests of Stakeholders and improve compliance with legislation and ethical values generally accepted in the banking industry. The implementation of Good Corporate Governance in Bank SBI Indonesia is based on five basic principles, namely transparency, accountability, responsibility, independence and fairness.

The implementation of Good Corporate Governance in Bank SBI Indonesia is based on OJK Regulation No. 55/POJK.03/2016 dated 07 December 2016 concerning Implementation of Good Corporate Governance for Commercial Bank and Circular Letter of OJK No. 13/SEOJK.03/2017 dated 17 March 2017 concerning the Implementation of Good Corporate Governance for Commercial Bank.

The following is the Report of Good Corporate Governance of Bank SBI Indonesia for 2019 in which divided into 2 (two) sections, namely :

  1. Transparency in Good Corporate Governance Implementation
  2. Report of Self Assessment of the Good Corporate Governance Implementation

1. DUTIES AND RESPONSIBILITIES IMPLEMENTATION OF BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS

1.1. BOARD OF COMMISSIONERS

1.1.1. Number, Composition, Criteria and Independency of Members of Board of Commissioners

Board of Commissioners is the corporate organ in charge of supervising the general and/or special in accordance with the Article of Association, ensure the implementation of Good Corporate Governance in every bank business activities as well as direct, monitor, and evaluate the implementation of the strategic policy of the Bank as well as provide advice to the Board of Directors.

In December 2019, the number of members of the Board of Commissioners was 3 (three) members, with a composition of 1 (one) President Commissioner and 2 (two) members as Independent Commissioners. The number is in accordance with the provisions of Otoritas Jasa Keuangan that the number of members of the Board of Commissioners should not exceed the number of members of the Board of Directors, which currently consists of 5 (five) person, 2 (two) of the members of the Board of Commissioners are Independent Commissioners (50% of the total number of members of Board of Commissioners). Total of 2 (two) members of the Board of Commissioners are Indonesia citizen and domiciled in Indonesia.

The Board of Commissioners upholds the principle of Independence in carrying out its duties and responsibilities. The Board of Commissioners also continues to maintain that in carrying out its duties it cannot be influence by any party.

 As of 31 December 2019, the Board of Commissioner’s members of Bank SBI Indonesia consists of 3 (three) with the following composition :

N a m a

J a b a t a n

Sanjay Dattatraya Naik *

Komisaris Utama / President Commissioner

Vincent Nangoi

Komisaris Independen / Independent Commissioner

Suranto Wignyoharjono

Komisaris Independen / Independent Commissioner

* the person had effectively been designated as the Independent Commissioner on December 14th 2018

1.1.2. Board of Commissioners Development Program

In order to increase knowledge to support the duties and responsibilities, in 2019 members of the Board of Commissioners have participated in training as follows :

N a m e   o f  t h e   A c t i v i t y

Place

T i m e

Sustainability Finance

Jakarta

September 2019

 

1.1.3. Board of Commissioners Meetings

In carrying out the duties and responsibilities at least the Board of Commissioners conducts Board of Commissioners meetings 4 (four) times a year and must be physically attended by all members of the Board of Commissioners at least 2 (two) times a year.

During 2019, the Board of Commissioners held meetings, both Board of Commissioners meeting and Coordination meeting of the Board of Commissioners and Directors as 22 (twenty two) times with the following attendance :

 

NO

Board of Commissioners

Board of Commissioners’ Meetings

Physical

Videoconference/

Teleconference

Circulation

Not Presen

1

Sanjay Dattatraya Naik *

2

8

12

-

2

Vincent Nangoi

2

8

12

-

3

Suranto Wignyoharjono

2

8

12

-

* the person had effectively been designated as the Independent Commissioner on July 1th 2019

In the Coordination meeting of the Board of Commissioners and Directors, the Board of Commissioners has provided recommendations on aspects including the following :

  1. Together with the Board of Directors approving the Bank Business Plan (“RBB”) for 2020 including the realization of the RBB in the previous period ;
  2. Periodically reviewing the Bank’s financial performance ;
  3. Ensuring that the Board of Directors has followed up on audit findings and recommendations from the Internal Audit Unit, including improvements to the findings of the examination of the external auditor and regulations ;
  4. Conducting active supervision of the Bank’s risk management process including the process of risk management on a bankwide basis, asset quality, governance and profitability of the Bank through the Risk Monitoring Committee. In addition, it also carries out risk management policies, especially those that are required and evaluates the compatibility of these policies with the implementation ;
  5. Bank’s business development in the area of credit, trade finance, placement of securities, third party funds in both the Branch and Division ;
  6. Increased income from interest, fee based income and efficiency in term of costs ;
  7. Provide input into the settelement of non-performing loans from the collectability 2-5, Collateral Foreclosed and write off loans ;
  8. Availability of infrastructure that includes Information Technology, Human Resources in terms of quantity and quality, the adequacy of policies and procedures.

Meeting decisions are made upon deliberation and consensus and there occurred no dissenting in the decision of the meeting in 2019. Minutes of the meeting have been distributed to all meeting participants for follow up and have been well documented.

1.1.4. Duties and Responsibilities of Board of Commissioners.

The duties and responsibilities of the Board of Commissioners as stipulated in the Articles of Association and in the Manual are as follows :

  1. Carry out the supervisory functions of the Bank, including overseeing the implementation of the duties and responsibilities of the Board of Directors, as well as advising the Board of Directors, directing, monitoring, evaluating the implementation of the Bank’s strategic policies, ensuring that the Board of Directors has followed up on the findings of internal audit, external audit and the finding results of Otoritas Jasa Keuangan (OJK).
  2. In carrying out its duties, the Board of Commissioners has established an Audit Committee, Risk Monitoring Committee as well as Remuneration and Nomination Committee. The composition of the Committee membership has been adjusted with the requisite skills to 2 (two) members of the Independent Party and is chaired by an Independent Commissioner.
  3. Ensuring that Good Corporate Governance is implemented in every business activities of the Bank at all organizational levels.

1.2. BOARD OF DIRECTORS
1.2.1. Number, Composition, Criteria and Independence of members of the Board of Directors

Board of Directors is authorized governance organi and full responsibility for the company’s bank for the benefit of the Bank, in accordance with the Bank’s purposes and objectives and represent the Bank, both inside and outside the court in accordance with the provisions of the articles of association and applicable laws and regulations.

The composition of the members of the Board of Directors in 2019 is as follows :

 

Name

Position

Pranab Ranjan Das *

Direktur Utama / President Director

Amitabha Datta

Direktur Operasional / Director of Operations and IT

Sri Hartati

Direktur Kepatuhan / Director of Compliance

Hendra Simatupang

Direktur Pengembangan Bisnis / Director of Business Development

Tri Budi Yunianto

Direktur Treasury & International Banking / Director of Treasury & International Banking

 * The person concerned effectively appointed as President Director on 22 July 2019

All members of the Board of Directors do not have a financial relationship, management relationship, share ownership relationship, and family with members of the Board of Commissioners and the Controlling Shareholders of the Bank. Therefore, all members of the Board of Directors are Independent. The principle of independence is carried out by prioritizing the interests of the Bank and not having a conflict of interest to the Bank so that it can harm and reduce the Bank’s income.

1.2.2. Development Program of the members of Board of Directors

Board of Directors member has implemented a continous learning culture through training or seminar in order to support the duties and responsibilities as follows :

 No

Nama Kegiatan

Tempat

Waktu

 1

Treasury Certification Refreshment Training. Advance Level. (Tri Budi Y.)

Bali

January 2019

 2

Risk Management Refreshment (Board of Directors)

Jakarta

February 2019

 3

Workshop of Investment and Overview Bond Investment (Tri Budi Y.)

Rusia

April 2019

 4

Seminar of Credit Reporting by PT. Pefindo Biro Kredit (Hendra K. Simatupang)

Jakarta

July 2019

 5

Seminar “Second Innovation in OJK Digital Banking Era” by Otoritas Jasa Keuangan (Amitabha Datta)

Jakarta

July 2019

 6

Training Bahasa Indonesia (Pranab R. Das)

Jakarta

July – September 2019

 7

Sustainability Finance (Directors)

Jakarta

September 2019

 8

Refreshment of Compliance level 3 (Sri Hartati)

Jakarta

October 2019

 9

Workshop of Sustainable Finance and the Formulation of Sustainable Financial Action Plan (RAKB) for BUKU 1&2 Banks by Perbanas (Sri Hartati)

Jakarta

October 2019

 10

Workshop of Anticipation of Capture Operation Hand (Operasi Tangkap Tangkap) on Corruption Crime by Otoritas Jasa Keuangan (Sri Hartati)

Jakarta

October 2019

 11

Socialisation of Resfreshment about Market Conduct and OJK Regulation no. 1/POJK/07/2018 by Otoritas Jasa Keuangan (Sri Hartati)

Jakarta

October 2019

 12

Seminar “Compasionate Systems Leadership For a Sustainable World : Transforming Public Policies-Corporate and Education Systems in Digital Era” by Otoritas Jasa Keuangan (Sri Hartati)

Jakarta

December 2019

In terms of certification, the Board of Directors has certifications including :

Risk Management Certification for all Directors, treasury certification for Treasury Director and compliance certification for Compliance Director.

1.2.3. Board of Directors Meeting

Board of Directors meeting are held in 2019, at least 2 (two) times a month, to discuss Bank performance, all Bank operational activities including control systems, risk profiles, ALCO, Bank Business Plan and others, to achieve the Bank’s targets.

The Board of Directors also attended coordination meeting with the Board of Commissioners in 2019 as table 1.1.3.

Any decision taken by the Board of Directors will be implemented in accordance with the applicable policies, guidelines and work rules. All decisions made at the Board of Directors meeting are based on deliberation to reach consensus, there are no dissenting opinions in the meeting held in 2019. The results of the Board of Director’s meeting have been outlined in the minutes of the meeting and are well documented.

1.2.4. Duties and Responsibilities of the Board of Directors

The main task of the Board of Directors is to manage the Bank in accordance with its authority and responsibilities as regulated in applicable laws and regulations and the Articles of Association to enhance the values of Shareholders and other Stakeholders. The responsibilities of the Board of Directors in the Bank’s business activities include :

I.    Articles of Association :

  1. The Board of Directors has the right to represent the Company inside and outside the Court regarding all matters and in any event, binding the Company with other parties and other parties with the Company, as well as taking all actions, both regarding management and ownership, but with the limitation that :

    a.   borrow or lend money on behalf of the Company (not including taking Company’s money at a bank);

    b.   establishing a business or participating in other companies both inside and outside the country; must be approved by the Board of Commissoners.

  2. a.   The President Director has the right and authority to act for and on behalf of the Board of Directos and represent the Company.

    b.   In the event that the President Director is absent or absent for any reason, which does not need to be proven to a third party, then one of the other Directors has the right and authority to act for and on behalf of the Board of Directors and represent the Company.

II.   Corporate Governance :

  1. The Board of Directors is fully responsible for the management of the Bank.
  2. The Board of Directors must manage the Bank in accordance with its authority and responsibilites as stipulated in the Articles of Association and applicable laws and regulations.
  3. The Board of Directors is required to apply the principles of good corporatte governance in all Bank’s business activities at all organization level.
  4. The Board of Directors is required to follow up on audit findings and recommendations from the Bank’s internal audit work unit, external auditors, the finding results of Otoritas Jasa Keuangan and/or the other authorities.
  5. In order to apply the principles of Good Corporate Governance, the Board of Directos at least required to establish :
    1. Internal Audit Unit ;
    2. Risk Management Unit and Risk Management Committee ; and
    3. Compliance Unit
  6. The Board of Directors is responsible for carrying out its duties to shareholders through the General Meeting of Shareholders.
  7. The Board of Directors must disclose to employees the Bank’s strategic policies in the area of employment.
  8. The Board of Directors are prohibited from using individual advisors and/or professional services as consultants unless they meet the following requirements :
    1. special projects ;
    2. based on a clear contract, which at least covers the scope of work, responsibilities and duration of  work and costs ;
    3. the consultant is an independent party and has the qualifications to work on a special project as referred to in point (8.a.).
  9. The Board of Directors must provide accurate, relevant and timely data and information to the Board of Commissioners.
  10. The Board of Directors must have work guidelines and rules that are binding for each member of the Board of Directors.
  11. Guidelines and procedures as referred to in point no. 10 must include at least :
    1. work ethics regulation
    2. working time
    3. meeting arrangements
  12. All decisions of the Board of Directors taken in accordance with the guidelines and work rules are binding and are the responsibility of all members of the Board of Directors.
  13. The Board of Directors is responsible for ensuring that each product/activity/services of the Bank has policies and procedures/work guidelines that have been approved by the Board of Directors and Board of Commissioners.

III.  Risk Management :

  1. Formulate a written and comprehensive policy, strategy and risk management framework including the overall risk limits and as per type of risk, taking into account the level of risk to be taken and risk tolerance in accordance with the conditions of Bank SBI Indonesia and calculating the impact of risk on capital adequacy. After obtaining approval from the Board of Commissioners, the Board of Directors sets the policy, strategy and risk management framework.
  2. Develop, establish and update procedures and tools to identify, measure, monitor and control risks.
  3. Develop and establish a mechanism for approval of transactions, including those that exceed limits and authority for each level of position.
  4. Evaluate and/or update the risk management policy, strategy and framework at least once a year or in more frequency in the event that there are changes in factors that effect business activities, risk exposures, and/or risk profiles significantly.
  5. Establishes the organizational structure including the clear authorities and responsibilities on every level of the position related to the implementation of risk management.
  6. Responsible for implementing policies, strategies and risk management frameworks that have been approved by the Board of Commissioners as well as evaluating and providing direction based on reports submitted by the Risk Management Unit including the risk profile report.
  7. Ensure that all material risks and impacts caused by the risks have been followed up and periodically submit accountability reports to the Board of Commissioners. The report, among others, includes a development reports and issues related to material risks accompanied by corrective steps that have been, are being and will be carried out.
  8. Ensure the implementation of corrective measures for problems or irregularities in business activities found by Internal Audit Unit.
  9. Develop risk management culture including risk awareness at all organization levels, including among others the adequate communication to all organization levels regarding the importance of effective internal control.
  10. Ensure the adequacy of financial support and infrastructure to manage and control risk.
  11. Ensure that the risk management function has been implemented independently as reflected by, among others, the separation of functions between the Risk Management Unit which identifies, measures, monitors and controls the risk with the Unit that carries out and completes transactions.

           

IV.  Compliance :

  1. Ensuring that the risk management function has been implemented independently as reflected in, among others, the separation of functions between the Risk Management Unit which carries out identification, measurement, monitoring and risk contorl and the Work Unit that carries out and completes transactions.
  2. Mandatory ensure the implementation of the Bank’s Compliance Function.
  3. The President Director receives periodic reports on the implementation of the duties and responsibilities of the Compliance Director with a copy to the Board of Commissioners.

 V.   Internal Control System :

  1.  Implement the policies and strategies that have been approved by the Board of Commissioners.
  2. Develop procedures to identify, measure, monitor and control risks faced by the Bank.
  3. Maintain the organizational structure that reflects authority, responsibilities and clear reporting relationship.
  4. Ensure that the delegation of authority runs effectively supported by consistent application of accountability.
  5. Establish policies and strategies and procedures for internal control.
  6. Monitor the adequacy and effectiveness of the internal control system.

A. COMMITTEES UNDER THE BOARD OF COMMISSIONERS

In order to support the duties and responsibilities of the Board of Commissioners, the Bank has 3 (three) committees responsible to the Board of Commissioners, namely :

  1. Audit Committee
  2. Risk Monitoring Committee
  3. Remuneration and Nomination Committee

Each committee has a Work Guidelines and Rules which are compiled and reviewed periodically based on applicable regulations.

 

2.1.1. Structure, Membership, Expertise and Independence of Audit Committee Members

The Audit Committee is an independent party that has no financial, management, share ownership, and/or family relationship with the Board of Commissioners, Board of Directors, Controlling Shareholders, and/or other relationship with Bank SBI Indonesia and is able to carry out its duties independently and cannot be influenced by any party.

The Audit Committee was formed based on Board of Directors Decree No. 049/KPTS/DIR-SBII/XII/2018 dated 14 December 2018 and aims to assist and facilitate the Board of Commissioners in carrying out oversight functions on matters relating to financial information, internal control systems as well as the effectiveness of internal and external audits and compliance with applicable laws and regulations.

The Audit Committee consists of 4 (four) member and is led by an Independent Commissioner. 2 (two) of them are Independent Parties from outside the Company who have competence and experience in banking.

The composition of the members of the Audit Committee in 2019 as follows:

       N a m e

           Membership

Position

Suranto Wignyoharjono

Independent Commissioner

Chairperson

Vincent Nangoi

Independent Commissioner

Member

Fathor Rachman

Independent Party

Member

Subardiah

Independent Party

Member

 

2.1.2Duties and Responsibilities of the Audit Committee.

The duties and responsibilities of the Audit Committee are to monitor and evaluate the planning and implementation of the audit as well as monitoring the follow up on the results of the audit in order to assess the adequacy of internal control including the adequacy of the financial reporting process.

In order to carry out its duties, the Audit Committee has conducted monitoring and evaluation of :

  1. Implementation of the duties of the Internal Audit Unit;
  2. Evaluating the implementation of providing audi services on annual historical financial information by the Public Accountant and or the Public Accountant Office with audit standards ;
  3. Follow up by the Board of Directors on the findings of the Internal audit Unit, Public Accountant and the findings of Otoritas Jasa Keuangan supervision, in order to provide recommendations to the Board of Commissioners ;
  4. Providing recommendations regarding the appointment of a Public Accountant to the Board of Commissioners to be submitted to the General Meeting of Shareholders ;
  5. The suitability of the financial statements with financial accounting standards ;
  6. Provide recommendations for the appointment of the Head of Internal Audit Unit, Internal Audit Charter, Annual Audit Plan, scope and budget of the Internal Audit Unit, the appointment of independent quality controllers from external parties to review the performance of the Internal Audit Unit, taking into account the recommendations of the Audit Committee ;
  7. Evaluating the Internal Audit performance ;
  8. Ensuring that the Internal Audit Unit communicates with the Board of Directors, Board of Commissioners, external auditors, and Otoritas Jasa Keuangan ;
  9. Ensure that Internal Audit Unit works independently ;
  10. Review the audit report and ensure that the Board of Directors takes the necessary corrective action quickly to overcome the weaknesses of control, fraud, issues of compliance with policies, laws and regulations, or other problems identified and reported by Internal Audit Unit ;
  11. Ensuring that the Internal Audit Unit upholds integrity in carrying out its duties.

2.1.3. Audit Committee Meetings

During 2019, the Audit Committee held (twelve) meetings. In each meeting, minutes are made and submitted to the Board of Commissioners.

The attendance of the Audit Committee meeting are as follows :

          N A M E

      P O S I T I O N

PRESENT

NOT PRESENT

Suranto Wignyoharjono

Independent Commissioner

12

-

Vincent Nangoi

Independent Commissioner

12

-

Fathor Rachman

Independent Party

12

-

Subardiah

Independent Party

12

-

 

2.1.4Brief Report on the Implementation of Audit Committee

  1. Provide recommendations regarding the appointment of Public Accountant to the Board of Commissioners to be submitted to the General Meeting of Shareholders.
  2. Discuss the commitment to follow up on the Otoritas Jasa Keuangan examination for 2019.
  3. Conduct discussions regarding the Internal Audit Reports.
  4. Discussing the Bank business plan for 2020
  5. Selection of Public Accountant office for review of the Internal Audit Unit for the period of 2017-2019
  6. Reviewing the performance of the Internal Audit Unit.
  7. Reviewing the Internal Audit Charter.
  8. Work Plan of Internal Audit Unit for 2020.
  9. Discussing audits on the readiness for the application of PSAK 71/ IFRS 9 in 2020.

 2.1.5. Recommendation of the Audit Committee

One of the tasks of the Audit Committee is to provide recommendations to the Board of Commissioners relating to control of Bank’s internal organization. Throughout 2019, recommendations made by the Audit Committee to the Board of Commissioners include:

  1. The Internal Audit Unit must be able to ensure all activities are in accordance with the provisions and procedures of the Bank.
  2. Bank must have List Acceptance Criteria for debtors in terms of credit processing.
  3. Systems and Procedures (SOP)related to purchasing bonds for multifinance companies need to be reviewed. There  are several that need to be included in the SOP, namely :

    • The bond purchase limit is based on the issuer rating.
    • Bond purchases must consider the issuer rating.
    • It is necessary to set a maximum limit of credit exposure in each sector, particularly for multifinance sector in order to to avoid credit concentration has a relatively high risk.
  4. The Audit Committee reminded that in terms of financing to multifinance in order to pay attention to the prudential aspects and ensure the credit provision to multifinance is regulated in the SOP.
  5. In the area of operational, Internal Audit Unit is recommended : 

    • conduct an audit exit meeting in the presence of the relevant Unit/Division Head.
    • create a reminder for each deadline for completing the audit findings, with a copy to the concerned Director.
    • completion of audit findings is related to employee appraisal performance
  6. In implementing PSAK 71, Bank is requred to improve parameters to comply with applicable regulations and prepare special accounts for PSAK 71 in the Core Banking System, including training and technical implementation of PSAK 71 for related unit.

 

2.2.1. Structure, Membership, Expertise and Independence of Risk Monitoring Committee Members

The committee was formed based on Directors Decree No. 007/KPTS/DIR-SBII/V/2019 dated 5 March 2019 in order to evaluate the formulation and implementation of policies in the area of risk which include evaluating the compatibility of policies with the implementation of risk management and monitoring the implementation of the risk Management Committee and Risk Management Unit.

The Risk Monitoring Committee consists of 4 (four) member and is led by an Independent Commissioner. 2 (two) of them are Independent Parties from outside the Company. 

The composition of the Risk Monitoring Committee members in 2019 is as follows :

 

N a m e

S t a t u s

Position

Vincent Nangoi

Independent Commissioner

Chairperson

Suranto Wignyoharjono

Independent Commissioner

Member

Fathor Rachman

Independent Party

Member

Subardiah

Independent Party

Member

 

2.2.2. Duties and Responsibilities of the Risk Monitoring Committee

  1. Evaluate the suitability of policies, strategies and the Risk Mangement framework prepared by the Board of Directors for the implementation.

  2. Evaluate the implementation for the duties of the Risk Management Committee and the Risk Managemnt Unit to provide recommendation to the Board of Commissioners.

 

 2.2.3. Risk Monitoring Committee Meetings

During 2019, Risk Monitoring Committee held 12 (twelve) meetings. Minutes meeting are made and submitted to the Board of Commissioners.

The attendance of Risk Monitoring Commiittee meeting is as follows :

N A M E

P O S I T I O N

PRESENT

NO PRESENT

Vincent Nangoi

Independent Commissioner

12

-

Suranto Wignyoharjono

Independent Commissioner

12

-

Fathor Rachman

Independent Party

12

-

Subardiah

Independent Party

12

-

 

2.2.4. Brief Report on the Implementation of Risk Monitoring Committee

  1. To evaluate the risk profile report periodically
  2. To discuss ICAAP December 2018
  3. To discuss the work plan of the Risk Management Unit for 2019
  4. To evaluate risk profile parameters regularly.
  5. IT strategic plan for 2019-2022 in supporting the achievement of Bank Business Plan

 

 2.2.5.Recommendation of the Risk Monitoring Committee

One of the tasks of the Risk Monitoring Committee is to provide recommendations to the Board of Commissioners relating to the control of the Bank’s risk. During 2019, recommendation from the Risk Monitoring Committee to the Board of Commissioners include :

  1. The Risk Management Division is requested to conduct a thorough analysis of the growth of syndicated loans and the overall impact on the Bank
  2. It is necessary to benchmark the application of the four eyes principles, because in the case of credit proposals there are opinions from the Risk Management Unit, Compliance Division and Legal Division.
  3. The Risk Management Unit is requested to analyze the NPL trend to subsequently establish limit per sector and monitor limits per economic sector.
  4. Roadmap is required related to the construction of a credit rating system, credit scoring, and operational risk because the contract with the vendor is terminated.
  5. Composit rating is required
  6. Risk Management Unit is recommended that :

    • The General Risk Management Policy was approved by the Commissioners, including its updates.
    • In order to draw a loan exposure limit, to be considered the limit for multifinance companies is currently more than 30%.
    • There are counterparty limit in the purchase of bonds and others against one issuer.
  7. Requesting the Bank to review the temporary credit extension policy.
  8. It requires the study and determine scenarios that will be used in the implementation of the calculation of CKPN PSAK 71 (IFRS 9).

2.3.1. Structure, Membership, Proficiency and Independency of Remuneration and Nomination Committee Members

Based on Directors Decree No. 020/KPTS/DIR-SBII/VII/2019 dated 25 July 2019, concerning Changes to Members of the Remuneration and Nomination Committee, the Committee was formed to assist the Board of Commissioners with regard to supervision related to remuneration and nomination policies of the Bank.

The Remuneration and Nomination Committee has 4 (four) members and is led by an Independent Commissioner. 2 (two) of them are Independent Parties from outside of the Company. The Remuneration and Nomination Committee membership is as follows :

Name

Membership

Position

Vincent Nangoi

Independent Commissioner

Ketua

Suranto Wignyoharjono

Independent Commissioner

Anggota

Sanjay Dattatraya Naik *

President Commissioner

Anggota

Dwi Ananta Wicaksono

HR Division Head

Anggota

 * The person concerned effectively appointed as President Commissioner on 1 July 2019

The number of Independent Commissioners and Executive Officer who are members of the Remuneration and Nomination Committee is more than 51% (fifty one percent) of the total number of members of the Nomination and Remuneration Committee.

Committee members have knowledge and understand the remuneration system and/or nomination according to the applicable regulations.

All independent members of the Remuneration and Nomination Committee do not have financial relations, management relationship, share ownership and/or family relations with members of the Board of Commissioners, Board of Directors and/or Controlling Shareholders or relationship with the Bank, which can affect the ability to act independently.

 

2.3.2.  Duties and Responsibilities of Remuneration and Nomination Committee :    

  1. To evaluate the remuneration policy based on performance, risk, fairness to the peer group, objectives and long term strategy of the Bank, fulfilling the reserve as stipulated in the legislation and the potential of the Bank’a income in the future ;
  2. Convey the evalution results and recommendations to the Board of Commissioners regarding :                                                                                                                        b.1.      Remuneration policy for Directors and Board of Commissioners to be submitted to the General Meeting of Shareholders ;

    b.2.      Remuneration policy for Employees as a whole to be submitted to the Directors;

  3. Ensure that the Remuneration policy is in accordance with applicable regulations ; and
  4. Periodically evaluate the implementation of the Remuneration policy.

2.3.3. Remuneration and Nomination Committee Meetings :

No

Date of the Meetings

Agenda

Minutes Number

1

06 February 2019

  • Nominate Mr. Pranab Ranjan Das as a Candidate for President Director of PT. Bank SBI Indonesia.

001/NOT-RNC/SBII/II/2019

2

22 February 2019

  • Nominate Mr. Sanjay Dattatraya Naik as a Candidate of President Commissioner of PT. Bank SBI Indonesia.

002/NOT-RNC/SBII/II/2019

3

05 March 2019

  • Discussion of the expiration of tenure of Mr. Hendra Simatupang as a Director of Business Development of PT. Bank SBI Indonesia, on 28 March 2019.
  • Discussion on the remuneration package of Mr. Hendra Simatupang as Director of Buss. Development of PT. Bank SBI Indonesia

003/NOT-RNC/SBII/III/2019

4

15 March 2019

  • Salary Increase for President Director, Director of Finance & IT, IT Division Head, International Banking Division Head, Indo India Business Banking Division Head and Treasury Division Head

004/NOT-RNC/SBII/III/2019

5

05 April 2019

  • Discussion of the expiration of tenure of Mr. Sujit Kumar Varma as a Non Independent Commissioner of PT. Bank SBI Indonesia, on 13 April 2019.

005/NOT-RNC/SBII/IV/2019

6

26 April 2019

  • Discussion of the expiration of tenure of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia, on 9 May 2019.
  • Discussion on the remuneration package of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia
  • Discussion on the appointment of Mr. Pranab Ranjan Das as President Director of PT. Bank SBI Indonesia.
  • Discussion on the remuneration package of Mr. Pranab Ranjan Das as President Director of PT. Bank SBI Indonesia

006/NOT-RNC/SBII/IV/2019

7

7 May 2019

  • Change of Salary Range
  • Salary Increment of 2019
  • Performance Bonus 2019

007/NOT-RNC/SBII/V/2019

8

27 June 2019

  • Discussion of the expiration of tenure of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia, on 30 June 2019.
  • Discussion on the remuneration package of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia.

008/NOT-RNC/SBII/VI/2019

9

12 September 2019

  • Discussion of the expiration of tenure of Mrs. Sri Hartati as Director of Compliance and Risk Management of Bank SBI Indonesia, on 15 September 2019.
  • Discussion on the remuneration package of Mrs. Sri Hartati as Director of Compliance and Risk Management of of Bank SBI Indonesia.

009/NOT-RNC/SBII/IX/2019

10

4 November 2019

  • Discussion of the expiration of tenure of Mr. Hendra Simatupang as a Director of Business Development of PT. Bank SBI Indonesia, on 28 March 2020.
  • Discussion on the remuneration package of Mr. Hendra Simatupang as Director of Buss. Development of PT. Bank SBI Indonesia

010/NOT-RNC/SBII/XI/2019

11

13 November 2019

  • Nominating Mr. Sanjay Kumar Singh as a Candidate of Director of Finance and IT of PT. Bank SBI Indonesia.

011/NOT-RNC/SBII/XI/2019

 

2.3.4. Remuneration paid to the members of Remuneration Committee throughout the year:

 
Type of Remuneration Members of Remuneration and Nomination Committee
2018 2019
Person In IDR mio Person In IDR mio
Salaries, Bonuses, Regular Benefits, Tantiem, and other facilities in the form of non-nature 3 725 3 775
Other facilities in the form of natura (housing, health insurance and so on) that:
a. can be owned;
b. can’t be owned.
1 22 1 22
Total 3 747 3 792

 

2.3.5.1. Review of background and purpose of Remuneration Policies

  1. In order to support the achievement of the Bank’s vision and mission, management of human resources (HR) is needed to enhance optimal performance in order to encourage the achievement of the Bank’s business goals.
  2. Ensure that the remuneration is in accordance with the provisions / legislation in force.
  3. Based on the company’s financial performance.
  4. Remuneration is adjusted to the ability of the Bank.
  5. Estimating the potential of bank income in the future.
  6. Ensuring that remuneration is on target and can be accounted for

 2.3.5.2. Review of previous year’s Remuneration Policies as well as its amendments.

  1. This review considers regulations relating to remuneration such as Minimum Wages and Labor Laws.
  2. Fairness of the amount of remuneration based on the ability of the Bank.
  3. The remuneration study from the previous year is based on the structure of the salary scale, performance, fairness with the peer group, the Bank’s strategy and goals for the long term.

2.3.5.3. Mechanism to ensure that remuneration for employees in the control unit is independent from the supervised work unit.

  1. In the case of remuneration, the Bank has set a salary scale, the amount of benefits is based on the level of position, so this ensures that no intervention or pressure will emerge on the control unit regarding remuneration.
  2. To ensure independence between the control unit and the work unit it supervises, namely through different performance indicators as well as decision making on remuneration for employees in the control unit that does not involve the supervised work unit, so that the remuneration received by employees in the control unit is not related to the supervised work unit.

 

2.3.6. Coverage of Remuneration Policies and its implementation per business units, per region and on foreign subsidiaries or branches :

  1. The Remuneration Policy applies to employees in all Work Units and regions whose implementation is implemented and monitored centrally at the head office.
  2. The implementation of remuneration is based on factors: class, rank and position, so that the implementation of remuneration depends on these factors in each work unit, region and or branch office

 

2.3.7. Remuneration inherently connects with these following risks, amongst others are:

2.3.7.1. The key risk employed in implementing Remuneration

Bank SBI Indonesia determines 2 key risks in implementing the remuneration policies, namely Credit Risk and Market Risk. The determination of principal risks towards remuneration package is considering the potential impact that the risks may impose.

2.3.7.2. Criteria to determine the key risk, comprising the intangible risks:

  1. Credit Risk: Factors that influence credit risk are the increase in NPLs, Foreclosed Collaterals, write off loans, unattainable credit growth in accordance with established targets, the credit process is not based on prudential principles and prevailing legislation, so that it can possess an impact on the rating of the Bank’s soundness level.
  2. Market Risk: Factors that influence market risk are losses in the management of interest rate and exchange rate risks that have an impact on the Bank’s profitability.

2.3.7.3. Impact of key risk implementation towards the variable remuneration policies:

The Bank provides variable remuneration, especially in the provision of Bonuses with the Clawback and Malus mechanism, to safeguard problems that may arise later on.

2.3.7.4. Changes in determining the main types of risks compared to last year and the reasons, if any:

The Bank did not modify any key risk type in 2018.

 

2.3.8. Performance Assessment related to Remuneration

2.3.8.1. Review of Remuneration Policies relating to the Performance Assessment:

Performance assessment is a measuring tool in evaluating the performance results of each employee. To evaluate employee performance using two approaches, namely quantitative through key performance indicators and qualitative, and then calculate the amount of salary increments. Review of individual remuneration is carried out every year and remuneration adjustments are based on individual performance.

2.3.8.2. Methods in linking individual remuneration with bank performance, work units and individual performance:

Evaluation of remuneration, especially periodic salary increases, the magnitude of the increase taking into account several factors, namely the inflation rate, adjustments to minimum wages according to regulations and bank performance. While the implementation of remuneration for periodic salary increases and bonuses taking into account the performance results of each individual employee.

2.3.8.3.  Description of the method used by the Bank to declare that the agreed performance cannot be achieved so that remuneration adjustment is then considered necessary:                               

Dari hasil penilaian kinerja pegawai yang dilaksanakan setiap tahun , telah memberikan pengaruh terhadap pegawai yang memiliki kinerja yang telah disepakati tetapi tidak dapat tercapai ( kategori below average ), sehingga akan memiliki dampak kepada pemberian remunerasi kepada pegawai tersebut.

2.3.9. Remuneration Adjustment is linked with Performance and Risk which comprises:

2.3.9.1. Deferred Variable of Remuneration Policy, amount, and criteria for determining the amount

The Bank determines the amount of variable remuneration towards the period of deferral of variable remuneration payments, namely to be deferred between 70-30% (70% is paid in advance and the remaining 30% is deferred payment for 3 years.

2.3.9.2. Bank Policy concerning deferred Variable Remuneration which is delayed payment (malus), or withdrawn if it has been paid (clawback)

The provision of variable remuneration with the malus category or clawback in 2018 in the form of bonuses is not deferred or withdrawn because quantitatively the remuneration paid is not significant considering the bonuses are given based on the Bank’s performance.

 

2.3.10. Name of the external consultant and its duties on Remuneration Policies, in case the Bank employs any external consultant:

The Bank did not employ any external consultant to formulate remuneration policies.

 

2.3.11. Package of remuneration and facility received by Board of Directors and Board of Commissioners encompass the Remuneration structure and the detailed amount of nominal.

2.3.12. Variable Remuneration, comprising:

2.3.12.1.   Form of Variable Remuneration along with the reasons for choosing the form: For this year Bank SBI Indonesia did not provide Clawback Variable Remuneration.

2.3.12.2.   Description in case there is any difference on the provision of variable remuneration among Board of Directors, Board of Commissioners and/or employees: the Bank is yet to determine any difference on the provision of variable remuneration among Board of Directors, Board of Commissioners and/or employees.

2.3.12.3.   Number of Board of Directors, Board of Commissioners as well as the employee which obtained the variable remuneration in one year and total nominal is elucidated as follows

Number of Remuneration per Person in One Year

Number of BoD

Number of BoC

 

2018

2019

2018

2019

more than IDR 2 bio

-

-

-

-

more than IDR 1 bio until IDR 2 bio

1

1

-

-

more than IDR 500 mio to IDR 1 bio

2

4

-

-

IDR 500 mio or less

1

-

2

2

 

 

2.3.13. Material Risk Takers

Determination of Material Risk Takers (MRT) is carried out through 2 (two) approaches, namely:

  1. Qualitative Approach: Directors or other employees because of their duties and responsibilities make decisions that have a significant impact on the Bank’s risk profile
  2. Directors, Board of Commissioners, and or Employees who obtain Variable remuneration with great value

Based on this approach, Bank SBI Indonesia determines the parties that meet the criteria as Material Risk Takers (MRT) which consists of:

1. President Director

2. Director of Business Development, and

3. Director of Treasury & International Banking

 

2.3.14. Share options owned by Directors, Board of Commissioners and Executive Officer of Bank SBI Indonesia

Keterangan/Nama

Jumlah Saham yang Dimiliki (lembar saham)

Jumlah Opsi

Harga Opsi (Rp)

Jangka Waktu

Yang Diberikan (lembar saham)

Yang Telah Dieksekusi (lembar saham)

Komisaris

-

-

-

-

-

-

Direksi

-

-

-

-

-

-

Pejabat Eksekutif

-

-

-

-

-

-

Total

-

-

-

-

-

-

 

2.3.15. Ratio between the highest and lowest salary

No

Remarks

Ratio

2018

2019

1

Highest and lowest ratio of Employee salary

14 : 1   

11.35 : 1

2

Highest and lowest ratio of Directors salary

14 : 1

1.44 :1

3

Highest and lowest ratio of Commissioners salary

1.33 : 1

1.33:1

4

Highest salary ratio of Directors and Highest ratio of Employee

1.64 : 1

1.33:1

 

2.3.16. Numbers of beneficiary and total variable remunerations that is unconditionally guaranteed given by Bank to Candidate of Directors, Commissioners and/or Employees in 1 year of working period:

No

Jabatan

Numbers of beneficiary and total variable remunerations that is unconditionally guaranteed

Person

Total

1

Prospective Director

-

-

2

Prospective Commissioner

-

-

3

Prospective Employee

-

-

 

2.3.17. Number of employee involved from work termination and total severance paid:

Total Nominal of Severance

paid per person in 1 year

Total

Employee in 2017

Total

Employee in 2018

Above IDR 1 bio

-

-

Above IDR 500 mio to IDR 1 bio

-

-

Less than IDR 500 mio

-

-

 

2.3.18. Total deferred Variable Remuneration, consisting of cash and/or share or instrument in a basis of shares issued by the Bank.:

Type

Deferred Variable Remuneration

Orang

Total

Cash

-

-

Shares

-

-

Shares-based Instruments

-

-

 

2.3.19 Total deferred Variable Remuneration paid in a year:

Total deferred Variable Remuneration paid in a year

Orang

Total

-

-

 

2.3.20. Detailed number of remuneration paid in a year is elucidated as follows:

Fixed and variable remuneration, deferred and non- deferred remuneration, remuneration given in cash and / or shares or stock-based instruments issued by the Bank:

A. Fixed Remuneration (in mio)

  1. Cash
 -
  1. Shares-based shares/instrument issued by the Bank

-

 B. Variabel Remuneration

 

Not deferred

Deferred

  1. Cash

-

-

  1. Shares-based shares/instrument issued by the Bank

-

-

 

2.3.21. Quantitative Information on:

The total remaining Remuneration that is still deferred is either exposed to implicit or explicit adjustments, the total reduction in Remuneration caused by explicit adjustments during the reporting period, the total reduction in Remuneration due to implicit adjustments during the reporting period:

Type of Remuneration - Variable

Remaining Amount Being Deferred

Total Reduction during Reporting Period

due to explicit adjustment

due to implicit adjustment

Total

( A + B )

Cash

 

-

-

-

Stock-based Shares / Instruments issued by the Bank (in shares and nominal million rupiahs which are conversions from the shares)

-

-

 -

-

2.3.1. Structure, Membership, Proficiency and Independency of Remuneration and Nomination Committee Members

Based on Directors Decree No. 020/KPTS/DIR-SBII/VII/2019 dated 25 July 2019, concerning Changes to Members of the Remuneration and Nomination Committee, the Committee was formed to assist the Board of Commissioners with regard to supervision related to remuneration and nomination policies of the Bank.

The Remuneration and Nomination Committee has 4 (four) members and is led by an Independent Commissioner. 2 (two) of them are Independent Parties from outside of the Company. The Remuneration and Nomination Committee membership is as follows :


Name


Membership


Position


Vincent Nangoi


Independent Commissioner


Ketua


Suranto Wignyoharjono


Independent Commissioner


Anggota


Sanjay Dattatraya Naik *


President Commissioner


Anggota


Dwi Ananta Wicaksono


HR Division Head


Anggota

 * The person concerned effectively appointed as President Commissioner on 1 July 2019

The number of Independent Commissioners and Executive Officer who are members of the Remuneration and Nomination Committee is more than 51% (fifty one percent) of the total number of members of the Nomination and Remuneration Committee.

Committee members have knowledge and understand the remuneration system and/or nomination according to the applicable regulations.

All independent members of the Remuneration and Nomination Committee do not have financial relations, management relationship, share ownership and/or family relations with members of the Board of Commissioners, Board of Directors and/or Controlling Shareholders or relationship with the Bank, which can affect the ability to act independently.

 

2.3.2.  Duties and Responsibilities of Remuneration and Nomination Committee :

    1. To evaluate the remuneration policy based on performance, risk, fairness to the peer group, objectives and long term strategy of the Bank, fulfilling the reserve as stipulated in the legislation and the potential of the Bank’a income in the future ;
    2. Convey the evalution results and recommendations to the Board of Commissioners regarding :                                                                                                                                    b.1.      Remuneration policy for Directors and Board of Commissioners to be submitted to the General Meeting of Shareholders ;

      b.2.      Remuneration policy for Employees as a whole to be submitted to the Directors;

    3.  

      Ensure that the Remuneration policy is in accordance with applicable regulations ; and
    4. Periodically evaluate the implementation of the Remuneration policy.

 

2.3.3. Remuneration and Nomination Committee Meetings :

No

Date of the Meetings

Agenda

Minutes Number

1

06 February 2019

    • Nominate Mr. Pranab Ranjan Das as a Candidate for President Director of PT. Bank SBI Indonesia.

001/NOT-RNC/SBII/II/2019

2

22 February 2019

    • Nominate Mr. Sanjay Dattatraya Naik as a Candidate of President Commissioner of PT. Bank SBI Indonesia.

002/NOT-RNC/SBII/II/2019

3

05 March 2019

    • Discussion of the expiration of tenure of Mr. Hendra Simatupang as a Director of Business Development of PT. Bank SBI Indonesia, on 28 March 2019.
    • Discussion on the remuneration package of Mr. Hendra Simatupang as Director of Buss. Development of PT. Bank SBI Indonesia

003/NOT-RNC/SBII/III/2019

4

15 March 2019

    • Salary Increase for President Director, Director of Finance & IT, IT Division Head, International Banking Division Head, Indo India Business Banking Division Head and Treasury Division Head

004/NOT-RNC/SBII/III/2019

5

05 April 2019

    • Discussion of the expiration of tenure of Mr. Sujit Kumar Varma as a Non Independent Commissioner of PT. Bank SBI Indonesia, on 13 April 2019.

005/NOT-RNC/SBII/IV/2019

6

26 April 2019

    • Discussion of the expiration of tenure of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia, on 9 May 2019.
    • Discussion on the remuneration package of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia
    • Discussion on the appointment of Mr. Pranab Ranjan Das as President Director of PT. Bank SBI Indonesia.
    • Discussion on the remuneration package of Mr. Pranab Ranjan Das as President Director of PT. Bank SBI Indonesia

006/NOT-RNC/SBII/IV/2019

7

7 May 2019

    • Change of Salary Range
    • Salary Increment of 2019
    • Performance Bonus 2019

007/NOT-RNC/SBII/V/2019

8

27 June 2019

    • Discussion of the expiration of tenure of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia, on 30 June 2019.
    • Discussion on the remuneration package of Mr. Naresh K. Sharma as President Director of PT. Bank SBI Indonesia.

008/NOT-RNC/SBII/VI/2019

9

12 September 2019

    • Discussion of the expiration of tenure of Mrs. Sri Hartati as Director of Compliance and Risk Management of Bank SBI Indonesia, on 15 September 2019.
    • Discussion on the remuneration package of Mrs. Sri Hartati as Director of Compliance and Risk Management of of Bank SBI Indonesia.

009/NOT-RNC/SBII/IX/2019

10

4 November 2019

    • Discussion of the expiration of tenure of Mr. Hendra Simatupang as a Director of Business Development of PT. Bank SBI Indonesia, on 28 March 2020.
    • Discussion on the remuneration package of Mr. Hendra Simatupang as Director of Buss. Development of PT. Bank SBI Indonesia

010/NOT-RNC/SBII/XI/2019

11

13 November 2019

    • Nominating Mr. Sanjay Kumar Singh as a Candidate of Director of Finance and IT of PT. Bank SBI Indonesia.

011/NOT-RNC/SBII/XI/2019

 

2.3.4. Remuneration paid to the members of Remuneration Committee throughout the year:

Type of Remuneration

Members of Remuneration and Nomination Committee

2018

2019

Person

In IDR mio

Person

In IDR mio

Salaries, Bonuses, Regular Benefits, Tantiem, and other facilities in the form of non-nature

3

725

3

  775

Other facilities in the form of natura (housing, health insurance and so on) that:

1

22

 

1

22


 


Total


3


747


3


792

 

2.3.5. Remuneration Policies Formulation Process: 

2.3.5.1. Review of background and purpose of Remuneration Policies

    1. In order to support the achievement of the Bank’s vision and mission, management of human resources (HR) is needed to enhance optimal performance in order to encourage the achievement of the Bank’s business goals.
    2. Ensure that the remuneration is in accordance with the provisions / legislation in force.
    3. Based on the company’s financial performance.
    4. Remuneration is adjusted to the ability of the Bank.
    5. Estimating the potential of bank income in the future.
    6. Ensuring that remuneration is on target and can be accounted for

 2.3.5.2. Review of previous year’s Remuneration Policies as well as its amendments.

    1. This review considers regulations relating to remuneration such as Minimum Wages and Labor Laws.
    2. Fairness of the amount of remuneration based on the ability of the Bank.
    3. The remuneration study from the previous year is based on the structure of the salary scale, performance, fairness with the peer group, the Bank’s strategy and goals for the long term.

2.3.5.3. Mechanism to ensure that remuneration for employees in the control unit is independent from the supervised work unit.

    1. In the case of remuneration, the Bank has set a salary scale, the amount of benefits is based on the level of position, so this ensures that no intervention or pressure will emerge on the control unit regarding remuneration.
    2. To ensure independence between the control unit and the work unit it supervises, namely through different performance indicators as well as decision making on remuneration for employees in the control unit that does not involve the supervised work unit, so that the remuneration received by employees in the control unit is not related to the supervised work unit.

 

2.3.6. Coverage of Remuneration Policies and its implementation per business units, per region and on foreign subsidiaries or branches :

    1. The Remuneration Policy applies to employees in all Work Units and regions whose implementation is implemented and monitored centrally at the head office.
    2. The implementation of remuneration is based on factors: class, rank and position, so that the implementation of remuneration depends on these factors in each work unit, region and or branch office

 

2.3.7. Remuneration inherently connects with these following risks, amongst others are:

2.3.7.1. The key risk employed in implementing Remuneration

Bank SBI Indonesia determines 2 key risks in implementing the remuneration policies, namely Credit Risk and Market Risk. The determination of principal risks towards remuneration package is considering the potential impact that the risks may impose.

2.3.7.2. Criteria to determine the key risk, comprising the intangible risks:

    1. Credit Risk: Factors that influence credit risk are the increase in NPLs, Foreclosed Collaterals, write off loans, unattainable credit growth in accordance with established targets, the credit process is not based on prudential principles and prevailing legislation, so that it can possess an impact on the rating of the Bank’s soundness level.
    2. Market Risk: Factors that influence market risk are losses in the management of interest rate and exchange rate risks that have an impact on the Bank’s profitability.

2.3.7.3. Impact of key risk implementation towards the variable remuneration policies:

The Bank provides variable remuneration, especially in the provision of Bonuses with the Clawback and Malus mechanism, to safeguard problems that may arise later on.

2.3.7.4. Changes in determining the main types of risks compared to last year and the reasons, if any:

The Bank did not modify any key risk type in 2018.

 

2.3.8. Performance Assessment related to Remuneration

2.3.8.1. Review of Remuneration Policies relating to the Performance Assessment:

Performance assessment is a measuring tool in evaluating the performance results of each employee. To evaluate employee performance using two approaches, namely quantitative through key performance indicators and qualitative, and then calculate the amount of salary increments. Review of individual remuneration is carried out every year and remuneration adjustments are based on individual performance.

2.3.8.2. Methods in linking individual remuneration with bank performance, work units and individual performance:

Evaluation of remuneration, especially periodic salary increases, the magnitude of the increase taking into account several factors, namely the inflation rate, adjustments to minimum wages according to regulations and bank performance. While the implementation of remuneration for periodic salary increases and bonuses taking into account the performance results of each individual employee.

2.3.8.3.  Description of the method used by the Bank to declare that the agreed performance cannot be achieved so that remuneration adjustment is then considered necessary:     

Dari hasil penilaian kinerja pegawai yang dilaksanakan setiap tahun , telah memberikan pengaruh terhadap pegawai yang memiliki kinerja yang telah disepakati tetapi tidak dapat tercapai ( kategori below average ), sehingga akan memiliki dampak kepada pemberian remunerasi kepada pegawai tersebut.

 

2.3.9. Remuneration Adjustment is linked with Performance and Risk which comprises:

2.3.9.1. Deferred Variable of Remuneration Policy, amount, and criteria for determining the amount

The Bank determines the amount of variable remuneration towards the period of deferral of variable remuneration payments, namely to be deferred between 70-30% (70% is paid in advance and the remaining 30% is deferred payment for 3 years.

2.3.9.2. Bank Policy concerning deferred Variable Remuneration which is delayed payment (malus), or withdrawn if it has been paid (clawback)

The provision of variable remuneration with the malus category or clawback in 2018 in the form of bonuses is not deferred or withdrawn because quantitatively the remuneration paid is not significant considering the bonuses are given based on the Bank’s performance.

 

2.3.10. Name of the external consultant and its duties on Remuneration Policies, in case the Bank employs any external consultant:

The Bank did not employ any external consultant to formulate remuneration policies. 

2.3.11. Package of remuneration and facility received by Board of Directors and Board of Commissioners encompass the Remuneration structure and the detailed amount of nominal.

 

2.3.12. Variable Remuneration, comprising:

2.3.12.1.   Form of Variable Remuneration along with the reasons for choosing the form: For this year Bank SBI Indonesia did not provide Clawback Variable Remuneration.

2.3.12.2.   Description in case there is any difference on the provision of variable remuneration among Board of Directors, Board of Commissioners and/or employees: the Bank is yet to determine any difference on the provision of variable remuneration among Board of Directors, Board of Commissioners and/or employees.

2.3.12.3.   Number of Board of Directors, Board of Commissioners as well as the employee which obtained the variable remuneration in one year and total nominal is elucidated as follows


Number of Remuneration per Person in One Year


Number of BoD


Number of BoC


 


2018


2019


2018


2019


more than IDR 2 bio


-


-


-


-


more than IDR 1 bio until IDR 2 bio


1


1


-


-


more than IDR 500 mio to IDR 1 bio


2


4


-


-


IDR 500 mio or less


1


-


2


2

 

2.3.13. Material Risk Takers

Determination of Material Risk Takers (MRT) is carried out through 2 (two) approaches, namely:

    1. Qualitative Approach: Directors or other employees because of their duties and responsibilities make decisions that have a significant impact on the Bank’s risk profile
    2. Directors, Board of Commissioners, and or Employees who obtain Variable remuneration with great value

Based on this approach, Bank SBI Indonesia determines the parties that meet the criteria as Material Risk Takers (MRT) which consists of:

1. President Director

2. Director of Business Development, and

3. Director of Treasury & International Banking

 

2.3.14. Share options owned by Directors, Board of Commissioners and Executive Officer of Bank SBI Indonesia


Keterangan/Nama


Jumlah Saham yang Dimiliki (lembar saham)


Jumlah Opsi


Harga Opsi (Rp)


Jangka Waktu


Yang Diberikan (lembar saham)


Yang Telah Dieksekusi (lembar saham)


Komisaris


-


-


-


-


-


-


Direksi


-


-


-


-


-


-


Pejabat Eksekutif


-


-


-


-


-


-


Total


-


-


-


-


-


-

 

2.3.15. Ratio between the highest and lowest salary


No


Remarks


Ratio


2018


2019

1

Highest and lowest ratio of Employee salary


14 : 1   


11.35 : 1

2

Highest and lowest ratio of Directors salary


14 : 1


1.44 :1

3

Highest and lowest ratio of Commissioners salary


1.33 : 1


1.33:1

4

Highest salary ratio of Directors and Highest ratio of Employee


1.64 : 1


1.33:1

 

2.3.16. Numbers of beneficiary and total variable remunerations that is unconditionally guaranteed given by Bank to Candidate of Directors, Commissioners and/or Employees in 1 year of working period:


No


Jabatan


Numbers of beneficiary and total variable remunerations that is unconditionally guaranteed


Person


Total

1

Prospective Director


-


-

2

Prospective Commissioner


-


-

3

Prospective Employee


-


-

 

2.3.17. Number of employee involved from work termination and total severance paid:


Total Nominal of Severance


paid per person in 1 year


Total


Employee in 2017


Total


Employee in 2018


Above IDR 1 bio


-


-


Above IDR 500 mio to IDR 1 bio


-


-


Less than IDR 500 mio


-


-

 

2.3.18. Total deferred Variable Remuneration, consisting of cash and/or share or instrument in a basis of shares issued by the Bank :


Type


Deferred Variable Remuneration


Orang


Total


Cash


-


-


Shares


-


-


Shares-based Instruments


-


-

 

2.3.19 Total deferred Variable Remuneration paid in a year:


Total deferred Variable Remuneration paid in a year


Orang


Total


-


-

 

2.3.20. Detailed number of remuneration paid in a year is elucidated as follows:

Fixed and variable remuneration, deferred and non- deferred remuneration, remuneration given in cash and / or shares or stock-based instruments issued by the Bank:


A. Fixed Remuneration (in mio)


    1. Cash
 -

    1. Shares-based shares/instrument issued by the Bank

-

 B. Variabel Remuneration

 


Not deferred


Deferred


    1. Cash

-


-


    1. Shares-based shares/instrument issued by the Bank

-


-

 

2.3.21. Quantitative Information on:

The total remaining Remuneration that is still deferred is either exposed to implicit or explicit adjustments, the total reduction in Remuneration caused by explicit adjustments during the reporting period, the total reduction in Remuneration due to implicit adjustments during the reporting period:


Type of Remuneration - Variable


Remaining Amount Being Deferred


Total Reduction during Reporting Period


due to explicit adjustment


due to implicit adjustment


Total


( A + B )


Cash


 


-


-


-


Stock-based Shares / Instruments issued by the Bank (in shares and nominal million rupiahs which are conversions from the shares)


-


-


 -


-

In order to support the implementation of the duties of the Board of Directors in order to create effectiveness and efficiency in the Bank business operations, the Board of Directors of Bank SBI Indonesia formed Committees under the Board of Directors. The Directors’ Committees are formed taking into account the Bank’s business needs and in accordance with applicable regulations.

Committees under the Board of Directors include :

  1. Risk Management Committee
  2. Assets and Liabilities Committee (ALCO)
  3. IT Steering Committee
  4. Committee of Good Corporate Governance
  5. Credit Committee
  6. Credit Policy Committee

 

In the context of implementing an effective Risk Management process and system, the Bank has established a Risk Management Committee through Directors Decree No. 003 / KPTS / DIR-SBII / III / 2019 dated March 4, 2019. The Risk Management Committee regularly holds meetings to anticipate any changes due to business development and changes in external conditions.

The structure and membership of the Risk Management Committee is as follows:

NO

                     P O S I T I O N

 1

President Director

 2

Director of Compliance & Risk Management

 3

Director of Finance & Information Technology

 4

Director of Business Development

 5

Director of Treasury & International Banking

 6

Head of Risk Management Work Unit Division

 

The duties and authorities of the Risk Management Committee are to provide recommendations to the President Director, among others:

  1. Formulation of Risk Management Policies and their changes, including the Risk Management strategy, the level of risk taken and risk tolerance, the Risk Management framework and contingency plans to anticipate abnormal conditions.
  2. Enhancing the Risk Management process on a regular or incidental basis as a result of changes in the external and internal conditions of the Bank that affect the adequacy of capital, the Bank's risk profile, and the effective implementation of Risk Management based on the results of evaluations.
  3. Determination of policies and / or business decisions that deviate from normal procedures, such as exceeding significant business expansion compared to predetermined Bank Business Plans or taking positions / risk exposures that exceed the established limits.

 

The ALCO Committee was formed in accordance with Directors' Decree no. 005 / KPTS / DIR-SBII / III / 2019 dated March 5, 2019, aims to establish and evaluate liquidity management policies and strategies to maintain liquidity in accordance with applicable regulations.

The structure and membership of the ALCO Committee is as follows:

NO

                   P O S I T I O N

 1

President Director

 2

Director of Compliance & Risk Management

 3

Director of Finance & Information Technology

 4

Director of Business Development

 5

Director of Treasury & International Banking

 6

Head of the Treasury Division

 

ALCO's duties and responsibilities include:

  1. Development, review and modification of the Asset and Liability Management (ALMA) strategy.
  2. Evalulation of the Bank's interest rate position and ALMA strategy to ensure that the Bank's risk taking position is consistent with the objectives of interest rate risk management.
  3. Review the pricing of assets and liabilities to ensure that pricing can optimize the results of investment, minimize the cost of funds, and maintain the balance sheet structure of the Bank, in accordance with the Bank's ALMA strategy.

 

The Information Technology Steering Committee is authorized to determine the information technology strategic plan in accordance with the Bank's business activities. Forming an Information Technology Steering Committee in accordance with Directors' Decree no. 006 / KPTS / DIR-SBII / III / 2019 dated March 5, 2019.

The structure and membership of the Information Technology Steering Committee are as follows:

NO

             P O S I T I O N

MEMBERSHIP

 1

Director of Finance & Information Technology

Head

 2

Director of Compliance & Risk Management

Member

 3

Head of Information Technology Division

Member

 4

Head of Operations Division

Member

 

The authority and responsibility of the Information Technology Steering Committee is to provide recommendations to the Directors, among others:

  1. Information technology strategic plan that is in line with the strategic plan of the Bank's business activities.
  2. Formulation of key information technology policies and procedures such as information technology security policies and risk management related to the use of information technology at the Bank.
  3. The suitability of approved information technology projects with the Information Technology Strategic Plan
  4. The suitability of the implementation of information technology projects with the project plans agreed in the service level agreement.
  5. The suitability of information technology with the needs of management information systems that support the management of the Bank's business activities.

The GCG Committee has the authority to assist in monitoring the implementation of GCG in all business activities at all levels in accordance with the Decree of the Board of Directors no. 003B / KPTS / DIR-SBII / I / 2018.

Structure and Membership of the GCG Committee:

NO

POSITION

MEMBERSHIP

 1

Director of Compliance & Risk Management

Head

 2

Head of Risk Management Division

Member

 3

Head of Human Resources Division

Member

 4

Head of Internal Audit Division

Member

 5

Head of Corporate Secretary Division

Member

 6

Head of Compliance Division

Member

 

Duties and Powers of the GCG Committee, among others:

  1. Assist the Board of Commissioners, Directors and Committees in the implementation of GCG principles in every business activity of the Bank at all levels of the organization.
  2. Carry out an inventory of all the Bank's obligations both in submitting reports and carrying out the duties of the Board of Commissioners, Directors and Shareholders specified in the Otoritas Jasa Keuangan regulations and other legislation related to GCG implementation.
  3. Ensure that all obligations stipulated in the Otoritas Jasa Keuangan regulations and other applicable laws and regulations related to GCG are fulfilled and implemented in a timely manner.
  4. Hold regular meetings to discuss GCG implementation with GCG committee members.

 

The Credit Committee is formed to assist the Board of Directors in evaluating and / or providing credit decisions in accordance with the authority limits set by the Directors as stipulated in the Company's Articles of Association with due regard to business development without leaving prudent principles.

Structure and Membership of the Credit Committee:

NO

                       P O S I T I O N

1

President Director

2

Director of Finance & Information Technology

 3

Director of Business Development

 4

Director of Treasury & International Banking

 

The duties and responsibilities of the Credit Committee include:

  1. Approve lending up to the maximum Lending Limit (LLL) and / or in accordance with applicable regulations.
  2. Ensure that the implementation of credit approval is in accordance with the SBII Bank credit policy.
  3. Ensuring that the provision of credit has been based on honest, objective, careful and thorough assessments and is independent of the influence of the parties concerned with credit applications.
  4. Ensuring that the credit to be provided has met the 3 pillars of asset quality.

The Credit Policy Committee was formed to direct the provision of credit through the formulation of credit policies in the framework of achieving prudent credit targets in accordance with the Decree of the Board of Directors no. 019 / KPTS / DIR-SBII / III / 2018.

Structure and Membership of Credit Policy Committee:

NO

POSITION

MEMBERSHIP

 1

President Director

Head

2

Director of Business Development

Member

 3

Head of International Banking Division

Member

 4

Head of Credit Review Division

Member

 5

Head of Credit Administration Division

Member

 6

Head of Legal Division

Member

 7

Head of Risk Management Division

Member

 8

Head of Compliance Division

Member

 9

Head of Internal Audit Division

Member

 10

Head of the Non Performing Asset / NPA Division

Member

 11

Head of the Indo India Business Banking Division

Member

 

The Functions and Responsibilities of the Credit Policy Committee include:

  1. Provide input to the Directors in the preparation of Bank / KPB Credit Policies, especially those relating to the formulation of the principle of prudence in credit
  2. Conduct supervision so that CDE is carried out consistently and consistently, and formulate solutions in the event that there are obstacles or obstacles in the application of CDE.
  3. Monitor and evaluate the following :
    • Development and quality of the loan or financing portfolio as a whole
    • Implementation of the authority to decide upon credit
    • Ensuring the process of granting, developing, and quality of credit given to parties related to the Bank and certain large debtors in accordance with the regulations.
  1. Submitting quarterly written reports to the Directors with a copy to the Board of Commissioners regarding the results of supervision of the implementation and implementation of the Bank Credit Policy, as well as the results of monitoring and evaluation.

 

The implementation of the compliance function is an important element in the effort to improve Corporate Governance. The Bank has a Director who oversees the compliance function and forms an independent Compliance Work Unit that is formed separately and is free from the influence of other work units and has direct access to the Director who oversees the Compliance Function.

In performing the Compliance Function, the Bank refers to OJK Regulation No. 46 / POJK.03 / 2017 dated 12 July 2017 concerning the Implementation of the Compliance Function of Commercial Banks.

The director in charge of the compliance function has made a report regarding the implementation of his duties, periodically to the President Director and Otoritas Jasa Keuangan with a copy to the Board of Commissioners.

The Bank's compliance function includes actions to:

  1. Realizing the implementation of a culture of compliance at all levels of the Bank's organization and business activities.
  2. Manage compliance risks faced by the Bank.
  3. Ensuring that the policies, provisions, systems and procedures as well as activities carried out by the Bank are in accordance with the provisions of the regulator and the applicable laws and regulations.
  4. Ensuring Bank compliance with commitments made by the Bank to Regulators.

Throughout 2019, in order to mitigate compliance risk and apply the precautionary principle and enhance the culture of compliance, the Compliance Unit conducts among others :

  1. Submission of a summary of the Regulations of Bank Indonesia & OJK to all Work Units totaling 24 regulations. The purpose of the submission is that each related work unit understands and follows up or implements matters that are its responsibility.
  2. Making 65 Compliance Opinion for the credit process.
  3. Deliver a commitment on the results of the examination of OJK / Bank Indonesia.
  4. Monitoring the obligation to report to external parties.
  5. Reporting related to AML-CFT programs.
  6. Review the draft internal work guidelines policy.
  7. Organizing refreshment training on Compliance Culture, Compliance Code of Ethics, AML-CFT and Internal Control
  8. Monitor the Internal Control activities on transactions of Bank operational activities.

Anti Money Laundering (AML) & Combating Financing of Terrorism (CFT) Program

Bank SBI Indonesia always implements AML-CFT programs in customer introduction activities by referring to the OJK Regulation No. 12 / POJK.01 / 2017 dated 16 March 2017 concerning the Implementation of the Anti Money Laundering and Combating Financing of Terrorism Program Program in the Financial Services Sector and OJK Circular No. 32 / SEOJK.03 / 2017 dated 22 June 2017 concerning the Implementation of the Anti-Money Laundering and Combating Financing of Terrorism Program in the Banking Services Sector.

During 2019, activities related to the implementation of the AML-CFT program implemented by the Bank include :

  1. Submission of a list of names of suspected terrorism from the competent authority that has been submitted to all branches and related work units.
  2. Reporting on customer financial transactions delivered on time, among others:
    • LTKT/CTR  : 144 reports
    • LTKM/STR  : 2 reports
    • LTKL/IFTI   : 23.149 transactions
    • Incoming   : 3.539 transactions
    • Outgoing    : 19.610 transactions
    • SIPJT/CIF  : 856 new customers

 

The Internal Audit Function of Bank SBI Indonesia is carried out by the Internal Audit Work Unit (SKAI). SKAI has played an active role in supporting quality business growth. SKAI provides a review of the effectiveness of internal control carried out by the work unit in accordance with the scope of the inspection

Internal Audit Work Guidelines

Based on the Internal Audit Implementation standard, Bank SBI Indonesia has compiled an Internal Audit Charter which was established and ratified in Jakarta on November 8, 2019, which was signed by the President Director and the Board of Commissioners as a guideline for Internal Audit which regulates among others:

  • Structure and position of the Internal Audit Work Unit
  • Duties and responsibilities
  • Authority
  • Code of Ethics for the Internal Audit Work Unit consisting of Integrity, Objectivity, Confidentiality and Competence.
  • Internal Auditor Requirements
  • Accountability of the Internal Audit Work Unit
  • Prohibition of Concurrent Duties and Positions
  • Responsibility and Accountability of the Head of the Internal Audit Work Unit
  • Criteria for the Use of External Experts in Supporting the Internal Audit Function
  • Legal protection
  • Assignment restrictions.

Duties and Responsibilities of Internal Audit:

  1. Assisting the duties of the President Director and the Board of Commissioners in carrying out supervision by outlining operational aspects of planning, implementation and monitoring of audit results;
  2. Making an analysis and assessment in the fields of finance, accounting, operations, and other activities through auditing;
  3. Identifying all possibilities to improve and improve the efficiency of using resources and funds; and
  4. Provide suggestions for improvements and objective information about the activities examined at all levels of management.

Human Resources and Competency Development of Internal Audit Work Unit

The number of employees of the Internal Audit Work Unit as of December 31, 2019 was 8 (eight) people consisting of:

  • 1 (one) Head of Division
  • 1 (one) Auditor for credit activity staff
  • 2 (two) Auditor staff for operational activities
  • 1 (one) staff Auditor for information technology activities
  • 1 (one) International banking Auditor staff
  • 1 (one) follow up & quality control monitoring staff
  • 1 (one) anti fraud staff

To improve the competency of the quality of human resources, as many as 7 (seven) people have an internal audit profession certification and 3 (three) people have risk management certification. In addition, the Internal Audit Work Unit has participated in training / training, among others:

  • Auditor Professional Certification (CBIA) in January 2019
  • Refreshment of Risk Management in February 2019
  • APU-PPT refreshment in April 2019
  • Anti-Fraud Socialization in December 2019

Internal Audit Work Program 2019

The Internal Audit Work Unit has prepared a work plan that has been approved by the President Director and the Board of Commissioners. For 2019 there will be 12 audit plans covering twelve branches and other divisions / activities. Inspections have largely been realized. There are no deviations in the realization of the audit plan.

 

IConsider recommendations from the Audit Committee based on memorandum no. 017 /MEMO/KA/IX/2019 dated 2 September 2019 and the Board of Commissioners based on the minutes of the Board of Commissioners' meeting no. 016/NOT/BOC/IX/2019 dated 3 September 2019, the shareholders through the Shareholders Decree dated 16 September 2019 appointed a Registered Public Accountant Office namely Gani Sigiro & Handayani (Grant Thornton) to audit Bank SBI Indonesia's financial statements for the year books ending December 31, 2019.

Assignment of audits to the accounting office has fulfilled the following aspects :

  1. Has a good reputation and capacity and is registered in Otoritas Jasa Keuangan
  2. The audit is supported by an Audit Engagement Letter between the Bank and the Public Accountant Office.
  3. The scope of the audit is in accordance with the auditing standards set by the Indonesian Institute of Accountants and the Professional Standards of the Public Accountant;
  4. Professional standards of public accountants; and
  5. Communication of OJK with the accounting office has been running well.   

 

The implementation of Bank SBI Indonesia's risk management is part of all banking activities, so that each strategic decision making of the Bank always takes into account the risks faced. Through the implementation of comprehensive risk management, it is hoped that the Bank can protect and create added value for stakeholders.

Bank SBI Indonesia's risk management is implemented by referring to the OJK Regulation no. 18 / POJK.03 / 2016 dated 16 March 2016 concerning Risk Management for Commercial Banks with the OJK Circular Letter no. 34 / SEOJK.03 / 2016 dated 1 September 2016 concerning the Implementation of Risk Management for Commercial Banks.

The application of risk management is carried out by covering 5 (five) pillars as follows :

  1. Active supervision by the Board of Commissioners and Directors                                 The Board of Commissioners actively supervises the implementation of the Bank's strategic policies that have taken into account the various risks faced by the Bank. To ensure the effectiveness of the application of risk management. The Board of Directors has established strategic policies that are conveyed to employees through various employee activities such as outing, etc

  1. Adequacy of policies and procedures as well as setting limits                                           Through the establishment of various internal regulations and limits for various banking activities, the Bank ensures that risk exposure is maintained in accordance with business characteristics and size. These internal provisions are always evaluated and updated regularly to ensure their compliance with applicable external laws and regulations.

  1. Adequacy of the risk management process                                                                           The risk management process implemented includes the process of identifying, measuring, monitoring and controlling risks by utilizing a management information system. This risk management process is carried out in collaboration with all work units of the risk owner. The results of the risk management process are periodically submitted to the Directors and Board of Commissioners through the Risk Management Committee and Risk Monitoring Committee.

  1. Quantity and quality of human resources                                                                                   Ensuring the adequacy of the quantity and quality of existing human resources and ensuring the human resources concerned understand their duties and responsibilities, both for the business unit, the Risk Management Work Unit and the supporting units responsible for the implementation of risk management

  1. Internal Control System                                                                                                           The implementation of the internal control structure is realized by the existence of internal provisions and limits, an inherent and independent oversight function and the implementation of the audit taking into account the level of risk of various activities and work units implementing activities.

Risk Management Work Unit

Is a work unit under the Director of Compliance and Risk Management that is independent of the business / operational work unit, Compliance Work Unit and Internal Audit Work Unit. The Risk Management Work Unit has the function to identify, monitor, measure and control risks and minimize the potential and impact of various types of risks encountered in business activities and processes.

Duties and Responsibilities of the Risk Management Work Unit

  1. Provide input to the Board of Directors in the preparation, policies, strategies and risk management framework.

  2. Develop procedures and tools for identification, measurement, monitoring and risk control.

  3. Monitor the risk management strategies that have been approved by the Directors.

  4. Monitoring the overall risk position / exposure and the type of risk.

  5. Implementation of stress testing to determine the impact of the implementation of risk management policies and strategies.

  6. Conduct a risk assessment of proposed new products and / or activities.

  7. Reviewing and recommending risk limits from proposed business and operational work units.

  8. Prepare and submit risk profile reports to the Risk Management Committee periodically to be submitted to the Board of Directors and the Otoritas Jasa Keuangan (OJK).

  9. Prepare a report on the Minimum Capital Adequacy Requirement (KPMM) in the Internal Capital Adequacy Assessment Process (ICAAP) periodically to be submitted to the Directors and OJK.

Implementation of Risk Management in 2019

  1. To develop a risk management culture at Bank SBI Indonesia, updates and socialization of each new policy have been carried out, including a risk management culture socialization in each branch and unit, and a culture of Risk Awareness Day conducted on September 2, 2019.

  2. Based on the results of the self-assessment of the application of risk management to the efforts made in quarter IV-2019, Bank SBI Indonesia has a stable risk composite rating of "2".

  3. In order to support the availability and adequacy of policies and procedures for all Bank activities and products, in quarter III-2019 system and procedure activities include:

    1. Carry out the results of the review of policies and procedures in coordination with the Compliance Division.
    2. Carry out the preparation or revision of policies and procedures in accordance with the development of the Bank's business or adjustments to regulations from Bank Indonesia or the Otoritas Jasa Keuangan, which had previously been discussed in advance with related Work Units, SKAI and SKK

Provision of funds to related parties and large exposure has been carried out in accordance with Bank Indonesia regulations regarding the Legal Lending Limit (LLL), and there were no violations or violations of LLL during 2019

The Bank has written policies, systems and procedures for providing funds to related parties as well as large exposure, including monitoring processes and steps to resolve the problem.

Implementation of provision of funds by the Bank to related parties and / or provision of large funds:

  1. Based on the monthly report regarding the Legal Lending Limit (LLL), during 2018 there was no violation or exceeding the LLL
  2. Diversification of the provision of large exposure of funds has been carried out by maintaining the core debtor ratio at a reasonable level in accordance with the Bank’s business strategy.
  3. Reports on the provision of funds to related parties have been submitted to OJKin accordance with the provisions.

For the period of December 2019, providers of funds to related parties and core debtors / groups are as follows:

NO

 

Fund Provision

A m o u n t

Debtor

Nominal (IDR mio)

1

to Related Parties

7

 1.893

2

to Core Debtors

 

 

 

 a.   Individual

14

 1.293.814

 

 b. Group

1

 148.922

 

The Bank's strategic plan has been prepared taking into account internal and external change factors, realistic, comprehensive and measurable and based on prudential banking principles in accordance with the Bank's vision and mission.

The Bank has compiled various programs both related to product development (assets & liabilities), setting target markets, choosing business types, simplifying the credit process, marketing and sales strategies and others.

Submission of the Bank's business plan is guided by the provisions of OJK by taking into account the following factors:

  1. External and internal factors that can affect the business continuity of the Bank
  2. The precautionary principle
  3. Application of risk management
  4. Sound banking principles

Realization of Bank’s Business Plan December 2019 (audited) :

Component

Actual

December 2019

Target

December 2019

Variance

DPK

  2,534,434  2,420,000  114,434

Credit

  2,058,067  2,548,015  -489,948

Asset

  4,945,248  5,156,925  -211,677

Profit

  83,481  75,548  7,933

NPL Gross

 3.65%

 4,00%

 -0.35%

NPL Net

 0.72%

 3,00%

 -2.28%

NIM

 4.03%

 4.14%

 -0.11%

ROA

 2.37%

 2.17%

  0.20%

ROE

 5.99%

 5.58%

 0.41%

 

The Bank has policies and procedures regarding procedures for implementing transparency in financial and non-financial conditions, and translating financial and non-financial conditions, including quarterly published financial statements of the position at the end of December 2019 that have been carried out in accordance with applicable regulations.

9.1. Submission of Governance Implementation Reports

The governance report has been submitted based on the actual condition of the Bank with a self-assessment attachment which includes, among others:

  1. The governance principle as referred to in the provisions of OJK;
  2. Members of the Board of Directors do not own shares and do not have financial relationships and family relationships with members of the Board of Directors with other members of the Board of Directors, members of the Board of Commissioners and / or Bank shareholders;
  3. Members of the Board of Commissioners do not own shares and do not have financial relationships and family relationships with members of the Board of Commissioners with other members of the Board of Commissioners, members of the Board of Directors, and / or shareholders of the Bank;
  4. Frequency of Board of Commissioners meetings
  5. There were no internal frauds that occurred at Bank SBI Indonesia
  6. There are no transactions that contain conflicts of interest;
  7. There is no buy back of shares and / or bank bonds;
  8. Provision of funds for social activities, and the Bank does not provide funds for political activities.

9.2. Share Ownership, Financial Relations and Family Relations of the Board of Commissioners and Directors

All members of the Board of Commissioners and Board of Directors do not have a share ownership of 5% (five percent) or more in banks and other companies domiciled at home and abroad.

All members of the Board of Commissioners and Board of Directors do not have financial and family relations with other members of the Board of Commissioners and Directors and / or including Bank Controlling Shareholders.

9.3. Shares Options and Buy Back Shares

During 2019 there were no share option and buy back shares by members of the Board of Commissioners, Directors, Executive Officers and Bank employees. In accordance with the Articles of Association of Bank SBI Indonesia, there are no rules regarding share options and buy back shares.

9.4.  Conflicts of Interest, Internal Fraud and Legal Issues

The Bank has policies and procedures regarding conflicts of interest. During 2019 there were no reports of transactions made by the Board of Commissioners, Directors, Executive Officers that contained conflicts of interest.

The Bank has a policy, system and procedure for settlement of conflicts of interest that are binding on every Bank management and employee. The issuance of a conflict of interest policy will reduce the level of risk of loss to the Bank.

TRANSACTIONS THAT HAVE CONFLICTS OF INTEREST

NO

Names and positions that have a conflict of interest

Name and position of the decision maker

Transaction type

Transaction Value ( in IDR mio)

Remarks

-

Nil

Nil

Nil

Nil

Nil

The Bank has an anti-fraud policy and strategy developed based on OJK Regulation No. 39/POJK.03/2019 dated 19 December 2019 concerning the Implementation of Anti-Fraud Strategies for Commercial Banks which include the factors of Prevention, Detection, Investigation, and Follow-up Reporting & Monitoring.

TOTAL IRREGULARITIES (INTERNAL FRAUD)

Internal fraud within a year

Number of cases convicted by

 

Management

Permanent Employee

Non-Permanent Employee

 

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

on process internally

Nil

Nil

Nil

Nil

Nil

Nil

yet to be settled

Nil

Nil

Nil

Nil

Nil

Nil

legally followed up

Nil

Nil

Nil

Nil

Nil

Nil

 

LEGAL DISCLOSURES

Legal Issues

Number of Cases

Civic

Criminal

Has obtained a decision that has permanent legal force

1

Nil

In the process of completion

Nil

Nil

Total

1

Nihil

Provision of funds for Social Activities is a form of implementation of a Corporate Social Responsibility (CSR) program that is useful in creating conducive community conditions, so that it will create mutually beneficial relationships between Bank SBI Indonesia and the community and are expected to increase levels of public trust in the Bank that has an impact on the development and sustainability of the business environment.

Bank SBI Indonesia realizes that as a company that has social responsibility to develop and empower people’s lives, Bank SBI Indonesia focuses on helping the community in the fields of education, health and humanity, social and religious, environment and emergency response to every natural disaster.

Bank SBI Indonesia do not provide funds for political activities, but the provision of funds for social / educational activities during 2019 are as follows:

  1. Donations for notebooks to schools in need through UNESCO amounted to Rp. 22,500,000.
  2. Donations for orphans and poor people in collaboration with the Islamic Spiritual Development Agency of BAPEKIS - Graha Mandiri for Rp. 3 million.
  3. Donations for orphans in collaboration with the Indonesian Bankers Association (IBI) of Rp. 2,500,000.

Self-Assessment Report on Good Corporate Governance

 

Rating

D e f i n i t i o n

Individual

2

The rating of Corporate Governance (individual) is 2 (Good), which reflects that the management of Bank SBI Indonesia have implemented good general governance. The existence of weaknesses in the application of the general governance principles does not significantly affect the company’s operations and can be resolved by the company’s management.

Analysis

The conclusion of the assessment of the implementation of Governance in a comprehensive and structured manner, includes both Governance Structure, Governance Process and Governance Outcome as follows:

Governance Structure

The structure and infrastructure of Bank Governance have met the prevailing regulations. In addition to the Bank forming a committee in order to support the supervisory duties of the Board of Commissioners in accordance with the provisions, the Bank also formed committees that supported the implementation of the duties and responsibilities of the Board of Directors in managing the company’s operational activities.

Policies and procedures, management information systems and the main tasks and functions of each organizational structure are prepared based on the provisions and risk-based framework and adjusted to the level of the organization within the company.

Governance Process

The structure and infrastructure of Corporate Governance are effective, in accordance with the role of duties and responsibilities based on the principles of Governance, the precautionary principle and the application of risk management.

Governance Outcome

Adequacy of reporting transparency, compliance with laws and regulations and bank performance are carried out in accordance with the prevailing regulations and supported by the adequacy of the Bank’s governance structure and infrastructure.

The Bank continues to be committed to carrying out recovery steps in order to support the continuation of the company’s business. Follow-up actions that will be taken by the bank so that the implementation of governance can be carried out properly, including:

  • The Board of Commissioners and Directors make efforts and establish strategies so that financial and non-financial performance that has been determined in the Bank’s Business Plan can be achieved.
  • Monitoring between Realization compared to the RBB target was discussed in the Board of Directors meeting and with the related Work Unit, so corrective actions were taken.
  • Make continuous efforts towards credit management so that the NPL ratio can be controlled according to the RBB including efforts to settle non-performing loans as well as collateral taken over considering this affects the bank’s profitability & capital.
  • Make efforts so that similar internal and external audit findings do not occur again by making corrective actions including: revisions to policies and procedures, increased supervision of Direct Supervisors. Increasing the role of Internal Control for checking daily transactions.

 

 
 
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08001724636
02139838747

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For More Information Please Contact 
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