Policy of Giving Loan to the Board of Directors and Board of Commissioners Granting loans to the Directors and Commissioners was included in the provision to Related Parties, and this had to be approved by the Board of Commissioners. Funding for Related Parties had beenregulated by the Otoritas Jasa Keuangan and the Company’s provisions, namely the BRI Loans Provision Minimum Limit Policy. The provisions and procedures for extending loans to the Board of Directors and Board of Commissioners applied the same as extending loans to prospective BRI Bank debtors in general and were given according to market interest (market rate) and reasonable (arm length basis) while taking into account the principle of prudence. Mechanism for Provision of Funds to Related Parties 1. Provision of Funds to Bank Related Parties was submitted independently or collectively through the Wholesale Credit Risk Analyst Division and had to obtain approval from the Board of Commissioners. 2. Provision of Funds to Related Parties had to be reviewed in advance by the BRI Independent Committee before being asked for approval from the Board of Commissioners. 3. Provision of Special Funds (especially loans) to the Board of Directors and Board of Commissioners had to be carried out in a fair and reasonable manner (equal treatment). Provision of Funds to Related Parties Provisions regarding the setting of the LLL limit were that the Portfolio of provision of funds to Related Parties with a Bank as a whole was set at a maximum of 10% (ten percent) of the Bank’s Capital. Other regulated party provisions were: 1. Banks were prohibited from providing funds to Related Parties that wee contrary to the general procedures for provision of funds. 2. Banks were prohibited from providing fund to Related Parties without the approval of the Bank’s Board of Commissioners. 3. Banks were prohibited from purchasing low-quality assets (assets that were of substandard, doubtful or loss quality and/or have been restructured) from Related Parties. 4. In the event that the quality of providing fund to Related Parties declined to substandard, doubtful or loss, the Bank was required to take steps to correct it by: a. Repayment of loans no later than 60 (sixty) days after the decline in the quality of provision of funds; and/or b. Conducted loans restructuring since the decline in the quality of provision of funds. 5. In the event that a Bank provided fund in the form of Equity Participation which caused the party where the Bank made Equity Participation to become a Related Party, the Bank was required to ensure: a. Fund Provision Plan was set at a maximum of 10% (ten percent) of Bank Capital; b. Provision of funds that would be and had been given to parties in which the Bank made Equity Participation after being added to the entire portfolio of provision of funds to Related Parties was set at a maximum of 10% (ten percent) of Bank Capital; c. Meet the conditions referred to in points 1, 2 and 3. Related parties included: 1. Individuals or companies that controlled the Bank. 2. Legal entity in the event that the Bank acted as a controller. 3. Companies in the case of individuals or companies as referred to in point 1 act as controllers. 4. Members of the Board of Directors, members of the Board of Commissioners, and Bank Executive Officers. 5. Parties who had family relations horizontally or vertically: i. From individuals who were controllers of the Bank as referred to in point 1; and ii. From members of the Board of Directors and/or members of the Board of Commissioners at the Bank as referred to in point 4; 6. Members of the Board of Directors and/or members of the Board of Commissioners in the company as referred to in points 1, 2 and/or 3. 7. Companies of which members of the Board of Directors and/ or members of the Board of Commissioners were members of the Board of Commissioners at the Bank. 8. Companies in which 50% (fifty percent) or more members of the Board of Directors and/or members of the Board of Commissioners were Directors and/or Commissioners of the company as referred to in points 1, 2 and 3. The amount of 50% (fifty percent) or more was calculated from the total cumulative Board of Directors and/or Board of Commissioners. 9. Companies that: a. Members of the Board of Directors, members of the Board of Commissioners, and/or Bank Executive Officers acted as controllers; and b. Members of the Board of Directors and/or members of the Board of Commissioners from the parties referred to in points 1, 2 and/or 3 acted as controllers. 10. Collective Investment Contract in which the Bank and/or the parties referred to in points 1-9 own 10% (ten percent) or more shares in the collective investment contract investment manager. 11. Companies that had financial relationships with Banks and/ or parties referred to in points 1-9 above. 12. The borrower was an individual or a non-bank company that had a financial relationship through providing guarantees to the parties referred to in points 1-11. 13. Borrowers who had financial relationships through guarantees provided by the parties referred to in points 1-11. 14. Other banks that had financial relationships through the provision of guarantees to the parties referred to in points 1-11 in the event that there was a counter guarantee from the Bank and/or the parties referred to in points 1-11 to the other bank. 15. Other companies in which there was an interest in the form PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 394
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