7. The portion of Legal Lending Limit guaranteed by certain collateral and meets certain requirements. 8. Legal Lending Limit which had become a factor reducing Capital. Exceeding Legal Lending Limit (LLL) Excess Conditions Legal Lending Limit by BRI was categorized as Exceeding the LLL caused by: 1. Decrease in Capital or Core Capital (Tier 1) 2. Exchange rate changes 3. Changes in fair value 4. Business mergers, changes in ownership structure, and/or changes in management structure that caused changes in Related Parties and/or Borrower groups; 5. Changes in provisions (regarding changes to parties categorized as Related Parties or Borrower groups). Determination of the Borrower in the calculation of LLL Exceeding was carried out in accordance with the provisions for calculating Legal Lending Limit. LLL exceedance was calculated based on the value recorded at the date of the report. Settlement of Violations and Excessing of LLL Bookings During 2023, BRI has never violated or exceeded the LLL. In the event that the Bank violates and/or exceeds the LLL, BRI is required to prepare a follow-up plan for the settlement of BMPK violations and/or exceeds it along with a target time for completion. Table of LLL Violations and Exceedings (dalam %) LLL Related Parties Party No Related Unrelated Parties (Borrower Group) BUMN LLL violations - - - - Exceeding the LLL - - - - Reporting External Report BRI submited reports on Provision Funds, Provision of Large Funds, Exceptions to Provision of Large Funds, LLL Violations or Exceedings of the LLL, individually and on a consolidated basis to the Otoritas Jasa Keuangan periodically. Internal Report Internally, BRI prepared LLL reports involving business units related to the following mechanism: 1. As a basis for determining LLL and Large Exposure, the FMA Division provides data on BRI’s last position of Capital to the Division in charge of the loan portfolio. 2. The Head Office Business Division, Kanca, UKLN, Division/ Desk in charge of Subsidiary Entities, and related units report the data required for reporting according to their respective functions to the Division in charge of the loan portfolio. 3. The division in charge of the loan portfolio consolidates and prepares LLL and Large Exposure reported and submited them to the Board of Directors and Board of Commissioners. BRI Internal LLL 1. As a form of prudence and risk appetite, BRI sets a maximum internal LLL amount of 85% of the LLL determined by OJK per obligor. 2. BRI’s distribution of loan funds was focused on the MSME segment. Transactions to Related Parties In 2023, transactions with related parties (related party transactions) were carried out in a fair, normal commercial terms, arm length basis with the following details: Table of Legal Provision Funds to Related Parties and Provision of Large Funds Legal Lending Limit 2023 2022 Number of Debtors Outstanding (in IDR million) Number of Debtors Outstanding (in IDR million) 1. To Related parties 643 16,238,267 645 13,306,100 2. To Core Debtors a. Individual b. Group 50 50 130,408,842 178,925,740 50 50 116,111,068 157,962,208 PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 396
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