of share ownership of 10% (ten percent) or more individually or jointly, from the parties referred to in point 5. Provision of Funds to Parties Other Than Related Parties 1. Provision of funds to: a. 1 (one) Borrower other than a Related Party; or b. 1 (one) group of Borrowers other than Related Parties 2. Provision of funds to 1 (one) borrower other than Related Parties or 1 (one) group of Borrowers other than Related Parties is set at a maximum of 25% (twenty five percent) of the Bank’s Core Capital (Tier 1). 3. Banks were required to determine the classification of Borrowers in a group of borrowers in the event that the Borrower had a controlling relationship with other Borrowers through ownership, management and/or financial relationships. 4. Classification of Borrowers with the following criteria: a. The Borrower was the controller of other Borrowers; b. 1 (one) party that was the controller of several Borrowers; c. 50% (fifty percent) members of the Board of Directors and/ or members of the Borrower’s Board of Commissioners become members of the Board of Directors and/or members of the Board of Commissioners at other Borrowers; d. The Borrower had financial relationships with other Borrowers; and/or e. The Borrower had a financial relationship in the form of issuing guarantees to take over and/or pay off part or all of the obligations of other Borrowers in the event that another Borrower failed to fulfill obligations to the Bank. 5. Borrower Group classification does not apply to: a. Provision of funds Facilities provided by Banks to debtors in general Bank business activities; and b. Providing guarantees by insurance companies, guarantee companies, the Government of the Republic of Indonesia, and/or governments of other countries. c. Provision of loans to debtors through companies using the forwarding method. d. Providing loans with a nucleus-plasma partnership pattern with a core company scheme guaranteeing loan to plasma. e. Provincial government and district/municipal government as well as between each district/city government. Provision of Funds Provision of funds that were considered in the calculation of LLL and Provision of Large Funds were all Provision of funds in the position of the banking book and trading book. 1. Types of Provision of funds, namely: a. Placement; b. Derivative transactions; c. Securities; d. Securities sold under agreement to repurchase (repo); e. Claims on securities purchased with agreements to resell (reverse repo); f. Acceptance bills; g. Loans; h. Equity capital; i. Temporary equity participation; j. Administrative account transactions; and k. Other forms of provision of funds that can be equated l. with letters a through j. 2. Provision of Bank Funds to SOEs for development purposes was set at a maximum of 30% (thirty percent) of Bank Capital. 3. Provision of funds to SOEs for development purposes such as Provision of funds for: a. food procurement; b. very simple Home procurement; c. Procurement, supply and/or management of oil and natural gas as well as alternative natural sources of energy that are equivalent; d. Procurement, supply and/or management of water; e. Procurement, provision and/or management of electricity; f. Procurement and/or management of export-oriented commodities; g. Procurement of instructors supporting land, sea and air transportation in the form of construction of roads, bridges, railroads, seaports and airports; and/or h. The development of the National Tourism Strategic Area (KPSN) which was determined and prioritized by the central government. Credit RISK Mitigation Techniques BRI was required to apply an Credit Risk Mitigation technique that met certain requirements in calculating LLL in the event that BRI recognized the existence of collateral, guarantees, guarantees or loan insurance as an Credit Risk Mitigation technique in calculating weighted assets according to credit risk using the standard approach by referring to the provisions of the Otoritas Jasa Keuangan which regulated regarding guidelines for calculating risk-weighted assets for credit risk using a standardized approach. Exceptions From Calculation of Legal Lending Limit (LLL) Placements at each Prime Bank were excluded from the LLL calculation with the following provisions: 1. Legal Lending Limit Section for Borrowers who obtain guarantees from Prime Bank. 2. Legal Lending Limit to the Central Government. 3. Placement with Bank Indonesia. 4. Purchase of Securities issued by the Government of the Republic of Indonesia and/or Bank Indonesia. 5. The Legal Lending Limit Division which obtained guarantees from the Government of the Republic of Indonesia under certain conditions. 6. Export-oriented Legal Lending Limit to financial institutions and the Legal Lending Limit Division which obtain guarantees from financial institutions that meet certain requirements. PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 395 Management Discussion and Analysis on Bank Performance
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