Check it out! Here’s an Update on Banking Dividend Distribution Rules from OJK

Jakarta – The Financial Services Authority (OJK) has previously emphasized that it will publish the implementation of commercial bank governance related to the dividend payout ratio of banks which is considered too large.

Chairman of the OJK Board of Commissioners, Mahendra Siregar, stated that currently the rules related to the banking dividend payout ratio are still in the process of being formulated by the banking division headed by OJK Banking Supervision Executive Head Dian Ediana Rae.

“It is being formulated by Mr. Dian’s team, it can be in accordance with the priorities that are also needed for banks in developing investment and also to anticipate various needs related to technology development as well as digital banking and cyber resilience,” Mahendra said after a press conference in Jakarta, August 18, 2023.

Previously, OJK’s Chief Executive of Capital Market Supervision, Derivative Finance and Carbon Exchange, Inarno Djajadi, said that OJK had not yet regulated the maximum percentage for the bank’s dividend payout ratio. “There is no such thing yet, and we will discuss this in the RDK,” said Inarno.

Meanwhile, OJK has emphasized that in the context of dividend payout ratio rules, OJK will regulate banks to fulfill the Bank’s obligations in dividend distribution, and communicate it with shareholders.

The banking dividend policy will include, among others, consideration of the Bank in terms of internal and external aspects, determining the amount of dividend distribution which also proportionally considers the interests of the Bank and the interests of shareholders or investors, including containing the necessary approval mechanisms and authorities.

Meanwhile, this regulation related to banking dividends is a manifestation of the principle of transparency in the implementation of good governance in the Bank towards all Bank stakeholders, especially shareholders. (*)