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Print articleNew Bank Indonesia Regulation on Credit Cards
March, 2012 -
On 6 January 2012, Bank Indonesia issued Regulation No. 14/2/PBI/2012 on the Amendment to Bank Indonesia Regulation No. 11/11/PBI/2009 on Card-Based Payment Instrument Activities (“New Regulation”). The New Regulation is aimed at re-evaluating the role of credit cards as a means of payment and to promote consumer protection when using credit and debit cards as a method of payment. The New Regulation is also aimed at limiting the provision of loans through credit cards.
Under the New Regulation, the acquirer is now responsible for payments to businesses and requires a card issuer to consider the cardholder’s minimum age; minimum income; maximum credit limit; and the minimum payment. Bank Indonesia will set the maximum interest rate for credit cards. These provisions will come into force as of 1 January 2013.
Another change is a prohibition against card issuers allowing their cards to be used to pay other installment credit obligations. Credit cards can only be used as a payment instrument for transactions. The New Regulation also covers a procedure for writing and sending bills to customers, procedures for collecting overdue debts and a prohibition against charging interest on fee components in credit card billing, such as late payment fines and on unpaid interest. There was no such prohibition before. Card issuers are also required to comply with ethical standards when attempting to collect credit card payments from cardholders.
Under the New Regulation, the acquirer is now responsible for payments to businesses and requires a card issuer to consider the cardholder’s minimum age; minimum income; maximum credit limit; and the minimum payment. Bank Indonesia will set the maximum interest rate for credit cards. These provisions will come into force as of 1 January 2013.
Another change is a prohibition against card issuers allowing their cards to be used to pay other installment credit obligations. Credit cards can only be used as a payment instrument for transactions. The New Regulation also covers a procedure for writing and sending bills to customers, procedures for collecting overdue debts and a prohibition against charging interest on fee components in credit card billing, such as late payment fines and on unpaid interest. There was no such prohibition before. Card issuers are also required to comply with ethical standards when attempting to collect credit card payments from cardholders.
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