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Good Corporate Governance
Good Corporate Governance

FOREWORD

The fast changing landscape of banking industry is presently heating up the competitiveness among the Banks. This competition incites the banking market to flow on a dynamic basis, which requires Bank SBI Indonesia to perform on a more effective and efficient basis. The living sustainability of a company or a Bank is highly influenced by the Good Corporate Governance system of such a company or Bank, which is very much positively believed and followed by Bank SBI Indonesia.

In order to carry out the vision and realize the mission with regard to enhance the performance of the Bank, to protect the stakeholders and to improve the compliance towards the prevailing law and regulations as well as to the general ethical value of banking industry, Bank SBI Indonesia keeps on performing the business activities referring to the Good Corporate Governance principles as regulated on Regulation of the Financial Services Authority (“POJK”) No. 55/POJK.03/2016 dated on December 7th, 2016 and Circular Letter of the Financial Services Authority (“SEOJK”) No.13/SEOJK.03/2017 dated on March 17th, 2017 concerning the Good Corporate Governance Implementation for Commercial Banks. The aforementioned Good Corporate Governance principles are amongst others concerning transparency, accountability, responsibility, independency and fairness.

Apart from that, Bank SBI Indonesia currently possesses an appropriate organizational structure which suits the business and risk complexities, encompassing the Board of Commissioners, Board of Directors, Committees, Compliance Function, Risk Management Function as well as the Internal Audit Function.

In order to ensure the good practical implementation of 5 (five) fundamental principles of Good Corporate Governance, Bank SBI Indonesia periodically conducts the self-assessment activities towards the overall assessment aspects of Good Corporate Governance which would be elucidated as follows.

  1. Implementation of duties and responsibilities of Board of Commissioners and Board of Directors.
  2. Completeness and implementation of duties of committees.
  3. Application of compliance, internal audit and external audit function.
  4. Application of risk management, comprising the internal control system.
  5. Fund provision for related parties as well as large exposures provision.
  6. Strategic plan, and
  7. Transparency of Bank financial and non-financial conditions.

Bank SBI Indonesia is very much committed in carrying out and in implementing the Good Corporate Governance principles in its overall business activities on each of its organizational stage/level.

We hereby convey the 2017 Good Corporate Governance Report of Bank SBI Indonesia that would be divided in two segments, i.e.

  1. Transparency of Good Corporate Governance Implementation.
  2. Report of Self-Assessment concerning the implementation of Good Corporate Governance.

1. DUTIES AND RESPONSIBILITIES IMPLEMENTATION OF BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS

1.1 BOARD OF COMMISSIONERS

1.1.a. Number, Composition, Criteria and Indepency of member of Board of Commissioners

The members of Board of Commissioners of Bank SBI Indonesia consist of 3 (three) persons, comprising 1 (one)President Commissioner and 2(two) Independent Commissioners.

Based on the Articles of Association of Bank SBI Indonesia, Board of Commissioners is apointed and discharged based on the General Meeting of Shareholders. Hereinbelow is a table elucidating the structure of Board of Commissioners in 2017.

Name

Designation

Sujit Kumar Varma

President Commissioner

Vincent Nangoi

Independent Commissioner

Nursanto

Independent Commissioner

Criteria and independency of the entire members of Board of Commissioners of Bank SBI Indonesia are as follows.

  1. The Independent Commissioners are only holding double position in 1 (one) company or institution which is not a banking institution. Meanwhile, the President Commissioner performs the functional duties as designated by the shareholders.
  2. Not concurrently possessing any family relationship until the second degree with the member of Board of Directors and/or other member of Board of Commissioners.
  3. Possessing the operational guidelines and code of conduct which amongst others regulates the working ethics, working hours and meeting regulations.
  4. Integrated, competent and possessing adequate financial reputation
  5. Board of Commissioners effectively performs its duties and responsibilities on an independent basis and not being exposed to any intervention from any of shareholders nor other parties. In giving a perspective and settling a problem, Board of Commissioners neglects the self-interest and avoids any possible conflict of interest.
  •  Board of Commissioners Development Program

The members of Board of Commissioners are sustainably consistent in giving efforts with regard to enhancing the banking knowledge, particularly concerning the development in order to support their duties and responsibilities as the member of Board of Commissioners, in attending the following trainings or seminars, amongst others are:

Name of Activity

   Place  

Time

“Policy Direction of Indonesian Payment

System Development” Seminar

 

Jakarta

 

May 2017

Remuneration Training

Jakarta

November 2017

 

1.1.b. Board of Commissioners Meetings

On its implementation, Board of Commissioners has 2 (two) kinds of meetings, namely Board of Commissioners Meeting and Coordination Meeting between Board of Commissioners and Board of Directors which are held on a monthly basis. The aforementioned Coordination Meeting is held in relation to the monitoring function of Board of Commissioners to Board of Directors concerning operational activities of the Bank. In 2017, Board of Commissioners has held 17 (seventeen) meetings as elucidated as follows.

NO

Board of Commissioners

Board of Commissioners Meetings

Physical Presence

Videoconference

Circulation

Absent

1

Sujit Kumar Varma

2

10

5

-

2

Vincent Nangoi

12

-

5

-

3

Nursanto

12

-

5

-



1.1.c. Duties and Responsibilities of Board of Commissioners

Generally speaking, Board of Commissioners had effectively carried out their banking monitoring function, including the monitoring activities towards the effective implementation of duties and responsibilities of Board of Directors, advising the Board of Directors, directing, monitoring, evaluating the practical implementation of Bank strtegic policies, ensuring that the Board of Directors had been performing considerable follow ups for the findings carried out by Internal Audit, External Audit as well as the monitoring results of Otoritas Jasa Keuangan (OJK).

On its practical implementation, Board of Commissioners had established the Audit Committee, Risk Monitoring Committee as well as Remuneration and Nomination Committee. The membership structure of the aforementioned committees had been suitably accorded with the required skills in prevailing the conditions of 2 (two) members of Independent parties chaired by an Independent Commissioner.

On the account of the implementation of its duties and functions, Board of Commissioners had effectively carried out the designated monthly meetings, comprising the Coordination Meeting between Board of Commissioners and Board of Directors.

Within the Coordination Meeting between Board of Commissioners and Board of Directors, Board of Commissioners had provided numerous recommendations, amongst others are:

  1. Bank performance relating to the realization, compared to the stipulated target in Bank Business Plan
  2. Business development of branch offices
  3. Settlement of Non Performing Loans on the collectibility 2-5, AYDA and the recovery of write-off credits
  4. New products
  5. Business strategies as per the Bank Business Plan
  6. Infrastuctures, comprising Information Technology, Human Resources to the tune of quantity and quality, adequacy of Policies and Procedures, and\
  7. Operational activities of the Bank from Business, Supporting and Controlling Units.

 

1.2. BOARD OF DIRECTORS

1.2.a. Number, Composition, Criteria and Independency

Member of Board of Directors, as per the Articles of Association of the Company, is appointed by General Meeting of Shareholders. Hereinbelow is a table elucidating the composition of Board of Directors of Bank SBI Indonesia in 2017.

N a m e

P o s i t i o n

Rizal Yamin

President Director

Naresh Kumar Sharma

Vice President Director

Amitabha Datta

Director of Operations and IT

Sri Hartati

Director of Compliance

Hendra Simatupang

Director of Business Development

 

Criteria and indenpency of members of Board of Directors are as follows.

  1. All the members of Board of Directors is at least possessing 5 years experience in the field of operations as Bank Executive Officers
  2. All the members of Board of Directors domiciles in Indonesia
  3. All the members of Board of Directors do not hold a double position as a member of Board of Directors, member of Board of Commissioners or Executive Officer in another Bank, company and/or institution.
  4. On an individual or joint basis does not possess any shares on the tune of more than 25% from the stored capital on another company
  5. Possessing guidelines and Code of Conduct which amongst others regulate the working ethics, working hours and meeting regulations.
  6. All the members of Board of Directors do not have any family relationship until the second degree among the members of Board of Directors and/or with any member of Board of Commissioners.

 

Board of Directors Development Plan

Member of Board of Directors had been effectuating the sustainable learning culture by means of irs involvement within trainings and seminars attended in order to support its duties and responsibilies

Name of the Activities

Place

Time

Refreshment of Risk Management Certification

Surabaya & Jakarta

February 2017

September 2017

December 2017

Bahasa Indonesia for Foreign Workers

Jakarta

February 2017

AML-CFT seminars

Jakarta

September 2017

Level 3 Compliance and Anti-Money Laundering Certification

Jakarta

October 2017

English training

Jakarta

November 2017

FKDKP Seminar and Annual General Meeting

Jakarta

Mei 2017

FKDKPSeminar

Jakarta

December 2017

LSPP Assessor seminar

Jakarta

December 2017

LAPSPISeminar

Jakarta

Mei 2017

 

1.2.b. Board of Directors Meetings

Meeting of Board of Directors is carried out on a weekly basis amongst others in order to determine the decision and strategic policies. Each of the determined decree of Directors would be further implemented as per the prevailing working policies, guidelines and Code of Conduct. The overall decision making is unisonly carried out on a consensus basis.

Results of Board of Directors meeting had sufficiently been recorded in the form of Minutes of Meeting which is being well documented, comprising the clear revelation of any dissenting opinions occurred in the meeting.

1.2.c. Duties and Responsibilities of Board of Directors

The implementation of duties and responsibilities of Board of Directors had been regulated within the guidelines and Code of Conduct of Board of Directors, which also comprises the regulations of working ethic, working hours and meetings

The duties and responsibilities of Board of Directors are as follows.

  1. Comprehensively responsible towards the managerial implementation of the Bank as per the function of each respective Directors asserted within the organizational structure, which hereinbelow would be further elucidated as follows.

a)   President Director                                                             

Apart of overseeing Vice President Director, Director of Finance and IT as well as the Director of Compliance and Risk Management, President Director is also in charge of overseeing the Internal Audit Division, Human Resources Division as well as Corporate Secretary Division.

b)   Vice President Director

Beside overseeing Business Development Director, Vice President Director is also in charge of overseeing Credit Review Division, Treasury Division, International Banking, Non Performing Asset Division as well as Financial Institution Department.

c)   Business Development Director                                    

is responsible in overseeing Indo India Business Banking Division, Consumer Banking Division and Branch Managers

d)   Director of Compliance and Risk Management         

oversees Compliance Division, Risk Management Division and Legal Department

e)   Director of Finance and IT                                               

Is responsible to oversee the Operational Division, Information Technology Division, Finance Division, Credit Administration Division and General Affairs Department.

  1. All of the members of Board of Directors performing their duties and responsbilities in order to manage the Bank as per regulations assigned by the Articles of Association and the prevailing Law and Regulations or those stated within the elucidation of their respective duties and responsibilities
  2. The implementation of duties and responsibilities of all members of Board of Directors is on an independent basis or without any intervention from the shareholders
  3. In carrying out the business activities of the Bank, Board of Directors refer to the Good Corporate Governance principles and ensure the effective realization of Good Corporate Governance Principles, namely transparency, accountability, responsibility, independency and fairness
  4. Follow up the audit findings and recommendations provided by Internal Audit Working Unit, External Audit as well as the monitoring results of Otoritas Jasa Keuangan (OJK)
  5. Provide data and information to Board of Commissioners on a complete, accurate, relevant and timely basis.
  6. All members of Board of Directors do not take benefit from the Bank for a personal interest, family and/or other party which could result in the loss or reduce the profit acquired by the Bank in any possible degree.
  7. Responsible towards the duties implementation in front of the shareholders by means of General Meeting of Shareholders.

In order to support the effective implementation of duties and responsibilities of Board of Commissioners, Bank had established the Audit Committee, Risk Monitoring Committee as well as Remuneration and Nomination Committee.

2.1. AUDIT COMMITTEE
2.1.a. Structure, Membership, Proficiency and Independency of Committee Audit Members

Based on the Decree of Directors no.029/KPTS/DIR-SBII//XII/2017 dated on December 15th 2017, Audit Committee consists of 4 (four) people and chaired by an Independent Commissioner. Two of them are independent parties originating from outside of the company. The membership structure of Audit Committee is as follows.

N a m e

Membership

  Position  

Nursanto

Independent Commissioner

Head

Vincent Nangoi

Independent Commissioner

Member

Erwin Mardjuni

Independent Party

Member

Fathor Rachman

Independent Party

Member

Member of Audit Committee originating from independent parties respectively possesses legal and/or banking background as well as relating to finance and/or accounting proficiencies. Independency of Audit Committee members reflected from the background of the members which come from outside the company’s management. On the other hand, an independent party does not possess any financial relationship, managerial relationship, share ownership and/or family relationship with Board of Commissioners, Board of Directors and/or Controlling Shareholders or any relation with the Bank which could lead to affect its capabilities to perform on an independent basis.

 

2.1.b. Duties and Responsibilities of Audit Committee

Audit Committee is responsible for monitoring and evaluating the audit planning and implementation as well as monitoring towards audit follow up matters in order to assess the sufficiency of internal control, comprising the adequacy of financial reporting process. Apart from that, the Audit Committee provides recommendation concerning the appointment of public accountant and public accounting office to Board of Commissioners to be later handed before the General Meeting of Shareholders.

 

2.1.c. Audit Committee Meetings

Audit Committee Meeting had been effectuated on a monthly basis, where it had been attended by at least 51% of all committee members, comprising Independent Commissioners and Independent Parties. Throughout 2017, Audit Committee had been conducted 13 meetings whose detail is shown on the table below.

NO  Meeting Date of Audit Committee Meetings
1  January 30th 2017
2  February 27th 2017
3  March 20th 2017
4  March 29th 2017
5  April 26th 2017
6  May 29th 2017
7  June 20th 2017
8  July 24th 2017
9  August 21st 2017
10  September 27th 2017
11  October 26th 2017
12  November 09th 2017
13  November 22nd 2017

 

2.1.d. Working Plan and Working Plan Realization of Audit Committee

  1. Audit Results of Risk Management Division
  2. Progress of Bank Commitment to Otoritas Jasa Keuangan regarding OJK inspection results on the position of March 31st 2016 and March 31st 2017
  3. Audit results concerning Core Banking System migration
  4. Discourse concerning follow up of 2016 auditor findings
  5. NPL & AYDA Setllement progress
  6. Audit report of Information Technology Division
  7. Review Results concerning the function of Internal Audit Working Unit on the position of January 2014 until December 2016 by Public Accounting Office Ellya Noorlisyati & collegues
  8. Discouse of report to Otoritas Jasa Keuangan or any external party related to the audit whose the maturity date is on June 2017
  9. Discourse of External Audit findings
  10. Internal Audit Working Unit Accomplishment Strategies
  11. Audit practical implementation before and after the implementation of Risk Based Bank Internal Audit Procedures
  12. Evaluation concerning the implementation of annual financial information audit service by Public Accounting Office Gani Sigiro & Handayani (Grant Thornton)
  13. Follow Up endeavors of IT Division audit report
  14. Submission of audit program report towards the inspection results of Bandung and Surabaya Branch Offices
  15. Inspection results of Operational Head Office and Bandung Branch Office
  16. 2018 Working Plan of Internal Audit Working Unit
  17. Mechanism in order to obtain proper audit results in order to reveal the root causes of the findings of Otoritas Jasa Keuangan
  18. Follow Up matters of the findings provided by Public Accounting Office Ellya Noors.

 

2.2. RISK MONITORING COMMITTEE
2.2.a. Structure, Membership, Proficiency and Independency of Members of Risk Monitoring Committee

Based on the Decree of Directors No.030/KPTS/DIR-SBII/XII/2017 dated on December 15th 2017, Risk Monitoring Committee consists of 4 people and chaired by an Independent Commissioner. Two of them are independent parties originating from outside of the company. Hereinbelow is a table showing the membership of Risk Monitoring Committee:

N a m e

Membership

   Designation  

Vincent Nangoi

Independent Commissioner

Head

Nursanto

Independent Commissioner

Member

Erwin Mardjuni

Independent Party

Member

Fathor Rachman

Independent Party

Member

Member of Risk Monitoring Commitee who is an Independent Party is respectively having adequate background in the field of finance and risk management. Independency of the member of Risk Monitoring Committee is reflected from the background of the aforementioned member which is originating from an external or outside the company’s management. Apart from that, the Independent Party does not possess any financial relationship, managerial relationship, shares ownership and/or family relationship with member of Board of Commissioners, Board of Directors and/or Controlling Shareholders or any other relationship with the Bank which could lead to affect their capability to act on an independent basis

 

2.2.b. Duties and Responsibilities of Risk Monitoring Committee

Risk Monitoring Committee provides recommendations to Board of Commissioners concerning the practical implementation of risk management as well as regarding policies towards risk exposures or performance development of the Bank relating to the risk profile condition, comprising recommendations in the form of constructive suggestions with regard to the enhancement of risk control system stipuilated within Minutes of Meetings. Alongside that, Risk Monitoring Committee monitors and perform its duties as well as monitors the duties implementation of Risk Management Division concerning the risk profile report of the Bank which envelopes the results of risk management implementation performed by Risk Taking Units, comprising control system.

 

2.2.c. Risk Monitoring Committee Meetings

Risk Monitoring Committee meetings had effectively been conducted on a monthly basis, in which were all attended by at least 51% of the overall members, including Independent Commissioner and Independent Party.              

Risk Monitoring Committee had carried out 11 meetings whose details are shown in the table below..

NO Meeting Date of Risk Monitoring Committee
1  January 30th 2017
2  February 27th 2017
3  March 20th 2017
4 April 26th 2017
5  May 29th 2017
6  June 20th 2017
7  July 24th 2017
8 August 21st 2017
9  September 27th 2017
10  October 26th 2017
11  November 22nd 2017

 

2.2.d. Working Program of Risk Monitoring Committee and its Realizations

  1. Risk Profile
  2. Limit per economic sector
  3. Bank’s performance
  4. Improvement of Credit Risk Management
  5. Working Plan of Risk Management Division
  6. Tax issues
  7. Discussion concerning Risk Management Committee
  8. Discussion concerning material risk-based remuneration consultant
  9. Branch management
  10. Duties and responsibilities of Risk Management Division
  11. Risk Limit of Bank SBI Indonesia
  12. Limit Recapitulation
  13. Externsion of term loan
  14. Number of account development concerning credit customers
  15. Revision or update concerning counterparty limit
  16. Revision of Business Continuity Plan policies
  17. Analysis concerning decrease of number of credit customers account
  18. Analysis of Term Loan Extension Process
  19. Limit Monitoring of Minimum Statuory Reserves
  20. Implementation of Customer Due Diligence and reporting compliance (LTKT and LTKM) as well as periodic customer data update
  21. Employee trainings and review of employee payroll system in order to fulfill the fairness principle
  22. Root cause analysis concerning LBU reporting
  23. Market opportunity of Bank SBI Indonesia

2.3. REMUNERATION AND NOMINATION COMMITTEE
2.3.a. Structure, Membership, Proficiency, Independency as well as Meeting of Remuneration and Nomination committee.

        a. Name of the members of Remuneration and Nomination Committee.

Name

Membership

Designation

Vincent Nangoi

Independent Commissioner

Head

Sujit Kumar Varma

President Commissioner

Member

Nursanto

Independent Commissioner

Member

Dwi Ananta Wicaksono

Executive Officer (HRD)

Member

 

        b. Number of conducted meetings             

No

Date of meeting and Minutes number

A g e n d a

  1

 January 5th 2017

001/NOT-RNC/SBII/I/2017

  1. Discourse concerning the termination of tenure period of Mr. Rizal Yamin as President Director of Bank SBI Indonesia on January 10th 2017.
  2. Discourse concerning remuneration package of Mr. Rizal Yamin as the prospective President Director of PT. Bank SBI Indonesia
  3. Salary increment for Vice President Director, Director of IT and Finance, Head of IT Division, Head of International Banking Division and Head of Indo-India Business Banking Division

 

 2

March 29th 2017

002/NOT-RNC/SBII/III/2017

  1. Discourse concerning the termination of tenure period of Mr. Rizal Yamin as President Director of Bank SBI Indonesia on April 10th 2017.
  2. Discourse concerning remuneration package of Mr. Rizal Yamin as the prospective President Director of PT. Bank SBI Indonesia

 3

 

April 21st 2017 003/NOT-RNC/SBII/IV/2017

  1. There is a new provision regulating the determination of Minimum Wage issued by the Government.
  2. OJK findings stating that there are employees whose salary is still below the range stipulated by the Bank
4

May 23rd 2017 004/NOT-RNC/SBII/V/2017

  1. 2017 salary increment for employee

 5

 July 5th 2017

005/NOT-RNC/SBII/VII/2017

  1. Discourse concerning the termination of tenure period of Mr. Rizal Yamin as President Director of Bank SBI Indonesia on July 10th 2017.
  2. Discourse concerning remuneration package of Mr. Rizal Yamin as the prospective President Director of PT. Bank SBI Indonesia

 6

 

October 5th 2017 006/NOT-RNC/SBII/X/2017

  1. Discourse concerning the termination of tenure period of Mr. Rizal Yamin as President Director of Bank SBI Indonesia on October 10th 2017.
  2. Discourse concerning remuneration package of Mr. Rizal Yamin as the prospective President Director of PT. Bank SBI Indonesia

 7

 

October 23rd 2017 007/NOT-RNC/SBII/X/2017

  1. Salary increment for Vice President Director and Director of Finance and IT
  2. Implementation of Retirement Security Program as per Governmental Regulations of Indonesia No.45 of 2015 concerning the Implementation of Retirement Security Program.
 8

November 13th 2017 008/NOT-RNC/SBII/XI/2017

  1. Nominating Mr. Tri Budi Yunianto as the prospective director of Treasury and International Banking of PT Bank SBI Indonesia
 9

November 15th 2017 009/NOT-RNC/SBII/XI/2017

  1. Nominating Mr. Naresh Kumar Sharma as the Prospective President Director of PT. Bank SBI Indonesia.
 10

December 13th 2017   010/NOT-RNC/SBII/XII/2017

  1. Replacement of Independent Party of Audit Committee and Risk Monitoring Committee

 

c. Remuneration paid to the members of Remuneration Committee throughout the year

Type of Remuneration

Members of Remuneration and Nomination Committee

Person

IDR in Million

salary, bonuses, allowance, dividend, and other non-allowance facilities in form of non-natura

3

 692.921.000

Other allowance facilities in form of natura (housing, transportation, health insurance, etc) which:

1

 21.675.200

 

Total

3

 714.596.200

 

2. Formulation Process concerning Remuneration Policies is as follows.

  1. Review of background and purpose of Remuneration Policies

   - In order to overcome any possible risk relating to the provision of big amount of  remuneration.

   - Maintain the Bank financial stability

           - Potential income of the Bank in the future                          

  1. Review of previous year’s Remuneration Policies as well as its amendment. Bank will review the provision of remuneration, types of remuneration, amount of provision and evaluate its practical implementation based on the performance, risk, fairness with peer group, goals and Bank’s long-term strategy, stock fulfillment as regulated within the prevailing law and regulations as well as potential income of the Bank in the future.
  2. Mechanism in order to ensure that the remuneration for employee in controlling unit is independent from the monitored working unit On the practical implementation of remuneration provision, Bank had stated the payroll scale, incentives will be measured based on the level of position, thereby it would serve to ensure that there would not be any intervention or pressure towards controlling unit, notably concerning remuneration provision.

3. Coverage of Remuneration Policies and its implementation per business units, per region and on foreign subsidiaries or branches

Bank SBI Indonesia implements the remuneration policies based on the category or level of position, thereby on the practical implementation of these policies, the remuneration provision would be equivalent, according to the category or level of position of each employee, either in Business units, region or branches.

4. Remuneration inherently connects with these following risks, amongst others are:

  1. The key risk employed in implementing Remuneration Bank SBI Indonesia determines 2 key risks in implementing the remuneration policies, namely Credit Risk and Market Risk.
  2. Criteria to determine the key risk, comprising the intangible risks Credit Risk is a risk of loss caused by the incapability or failure to pay by the debtors towards the payment of their loans, either principal loan or its interest or both of the aforementioned points. This credit risk would further lead to influence the strategic risk of the Bank, which would evidently impact the rating of the Bank. The things that would lead to affect the rating of the Bank are amongst others increasing NPL, AYDA and non-growing credit distribution. Furthermore, the units that play substantial role in maintaining the credit risk are Business Units, Credit Review Working Unit and NPA Working Unit Market Risk   is a risk emerging due to the decreasing value of an investment caused by a movement on market factors. Four standard market risk factors are capital risk, interest risk, currency risk and commodity risk. The units that play a substantial role in maintaining the market risk is Treasury Working Unit.

  3. Impact of key risk implementation towards the variable remuneration policies, comprising the impact of key risk determination towards the Fix Remuneration Policies, if any. Relating to key risk determination within the formulation of remuneration policies, Bank SBI Indonesiam implements the Clawback and Malus mechanism with regard to remuneration provision for specific variable of specific bonus provision.

 5. Performance Assessment related to Remuneration

  1. Review of Remuneration Policies relating to the Performance Assessment. Performance Assessment is a measurement tool to acknowledge and evaluate the performance of every employee. Bank SBI Indonesia currently utilizes two types of approach to evaluate the performance, namely quantitative and qualitative approach. For quantitative assessment, Bank SBI Indonesia utilizes the key performance indicator, which would further be referred as a base to calculate salary increment.
  2. Method employed in conncecting individual remuneration with Bank performance, Working Unit and individual performance. With regard to evaluate the remuneration, particularly concerning periodic salary increment, the amount of increment would take into account the inflation level, adjustment to Minimum Wage added by the Bank Performance. Meanwhile, the implementation of increment would consider the individual performance results.
  3. Descriptiion concerning method employed by the Bank in order to assert that the accorded performance could not be accomplished, thereby it is considered necessary to make adjustment concerning remuneration. With regard to the practical implementation of remuneration adjustment, Bank stay considering the inflation level and adjustment towards the Minimum Wage and salary position towards the stipulated scale, thereby in case the performance could not be met but the salary position is still under the scale, Bank would keep adjusting the salary increment.

6. Remuneration Adjustment is linked with Performance and Risk which comprises these following points, amongst others are:

  1. Bank SBI Indonesia presently implements the remuneration system related to the Performance and Risk for remuneration with variable of specific bonus provision. The provision of specific bonus is granted based on the recommendations of Remuneration and Nomination Committee.
  2. Specific Bonus provision would employ the Malus and Clawback provision on Risk Taker Material. In 2016, Bank SBI Indonesia did not provide specific bonus.

 

7. Remuneration adjustment related with Performance and Risk Since that there was no provision of any specific bonus, thereby there is no any remuneration whose payment is deferred or withdrawn.

8. Name of the consultant

     - NIL

9. Package of remuneration and facility received by Board of Directors and Board of  Commissioners encompass the Remuneration structure and the detailed amount of nominal

Table of remuneration and facility package received by Board of Directors and Board of Commissioners

Type of Remuneration

Received nominal in a year

B O D

B O C

Person

in IDR Mio

Person

in IDR mio

salary, bonuses, allowance, dividend, and other non-allowance facilities in form of non-natura

5

      3.246.766.345

2

      462.200.000

Other allowance facilities in form of natura (housing, transportation, health insurance, etc) which:

a.   Available to be owned;

b. not available to be owned.

5

      1.473.969.242

-

      -

Total

5

      4.720.735.587

2

      462.200.000

 

10. Remuneration package classified in level, which received by Directors and Commissioners in 1 (one) year, as described in the table below :

Amount of remuneration per person in 1 (one) Year *

Number of BOD

Number of BOC

Above IDR 2 billion

1

-

Above IDR. 1 billion to IDR 2 billion

1

-

Above IDR 500 million to IDR 1 billion

2

-

IDR 500 million or below

1

2

 

11. Variable Remuneration, comprising:

      In this year period, Bank SBI Indonesia did not provide any variable remuneration

12. Number of Board of Directors, Board of Commissioners as well as the employee which obtained the variable remuneration in one year and total nominal is elucidated as follows.

Variable Remuneration

Amount received in one year

BOD

BOC

Employee

Person

in IDR mio

Person

in IDR mio

Person

in IDR mio

 

5

-

2

-

266

-

Total

5

-

2

-

266

-

 

13. Position and number of MRT Party

No

Title of Position

 Total 

1.

President Director

1

2.

Vice President Director

1

3.

Director Of Business Development

1

 

14. Share options owned by Directors, Board of Commissioners and Executive Officer of Bank SBI Indonesia do not possess policies regarding share option:

Description/Name

Numbers of Shares Owned (Shares)

Number of Options

Option Price (IDR)

Term

 

Granted (shares)

 

Executed (Shares)

Commissioner

-

-

-

-

-

-

Directors

-

-

-

-

-

-

Executive Officer

-

-

-

-

-

-

Total

-

-

-

-

-

-

 

15. Ratio between the highest and lowest salary, comprising:

No

E x p l a n a t i o n

R a t i o

1.

Highest and lowest ratio of Employee salary

13.38   :    1

2.

Highest and lowest ratio of Directors salary

1.71   :    1

3.

Highest and lowest ratio of Commissioners salary

1.33   :    1

4.

Highest salary ratio of Directors and Highest ratio of Employee

1.64   :    1

 

16. Numbers of beneficiary and total variable remunerations guaranteed with non-requirements given by Bank to Candidate of Directors, Commissioners and/or Employees in 1 year of working period..

No

P o s i t i o n

Numbers of beneficiary and total variable remunerations guaranteed with non-requirements

Person

Total

1.

Candidate Director

-

-

2.

Candidate Board of Commissioners

-

-

3.

Candidate

-

-

 

 17. Number of employee involved from work termination and total severance paid as mentioned in the table below:

Total Nominal of Severance paid per person in 1 year

Total Employee

Above IDR 1 billion

-

Above IDR 500 million to IDR 1 billion

-

IDR 500 million or below

1

 

18. Total deferred Variable Remuneration, consisting of cash and/or share or instrument in a basis of shares issued by the Bank.        

Type of

Remuneration that Variable in nature that deferred

Person

Total

Cash

-

-

Share

-

-

Instrument with share basis

-

-

 

 19. Total deferred Variable Remuneration paid in a year.

Total Variable Remuneration that deferred, which paid in 1 (one) year.

Person

Total

-

-

 

20. Detailed number of remuneration paid in a year is elucidated as follows.

A. Fixed Remuneration

1. Cash

Rp. 5.182.935.587

2. Share / Instrument in share basis Issued by Bank

-

B. Variable Remuneration

 

Not Postponed

Postponed

1. Cash

-

-

2. Share / Instrument in share basis Issued by Bank

-

-

 

Based on the Decree of Directors No.006/KPTS/DIR-SBII/IV/2016 dated on April 14th 2016, Remuneration and Nomination Committee consists of 4 people and chaired by an Independent Commissioner. Member of Remuneration and Nomination Committee consists of 2 Independent Commissioners, 1 non-independent Commissioner and 1 Executive Officer from Human Resources Division, which would be detailed as follows.

N a m e

M e m b e r s h i p

Position

Vincent Nangoi

Independent Commissioner

Head

Sujit Kumar Varma

President Commissioner

Member

Nursanto

Independent Commissioner

Member

Dwi Ananta W.

Executive Officer

Member

 

2.3.b.  Duties and Responsibilities of Remuneration and Nomination Committee

  1. Evaluate the Remuneration Policies based on the performance, risk, fairness with the peer group, objectives and long term strategies of the Bank, stock fulfillment as per regulated within law and regulations and potential income of the Bank in the future.

  2. Convey the evaluation results and recommendation to Board of Commissioners concerning these following matters:

  1) Remuneration policies for Board of Directors and Board of Commissioners to be presented in General Meeting of Shareholders

  2) Remuneration policies for the overall employee to be presented before the Board of Directors.

c. Ensure that the Remuneration policies have been suitable with the prevailing provisions

d. Periodically evaluate the implementation of Remuneration policies.

The implementation of compliance function refers to POJK No.46/POJK.03/2017 concerning the Implementation of Compliance Function for Commercial Banks. The preventive efforts in order to mitigate the risk of Bank business activities could be achieved by means of complying various prevailing banking principles with regard to reduce and lessen the risks of Bank business activities. Therefore, it is considered necessary to enhance the role and function of compliance and compliance working unit of the Bank, so that any potential risk of Bank business activities would be anticipated on the earliest recognition.

Hereinbelow is the performance ofcompliance function performance in 2017 is as follows:

  1. Bank had conveyed the key report concerning duties implementation of Compliance Director to Otoritas Jasa Keuangan as well as to the related parties each semester on a timely basis. There was no particular report of Compliance Director as of IInd semester of 2017.
  2. Ensure the Bank compliance towards the provisions of Otoritas Jasa Keuangan or Bank Indonesia as well as towards the prevailing law and regulations by means of these following manners:

    a.  Providing credit process opinions, giving approval towards review of formulation or revision of policies and procedures made by Compliance and Risk Management Division. Apart from that, it provides the discussion concerning inspection results of Otoritas Jasa Keuangan or Bank Indonesia or any other external parties.

    b. In order to monitor and preserve the business activities from any potential regulatory deviation, Bank had performed these following efforts, amongst others are:

        • Fulfillment of completeness of internal working policies, guidelines and procedures, comprising the periodic review on an annual basis, which is adjusted with the prevailing provisions.

        • Transactional inspection by internal control officer

    c. Performing monitoring activities by means of providing reminders to related working units to fulfill the agreement or commitment made by the Bank, as well as conveying the overall agreements and commitments accorded to Otoritas Jasa Keuangan or any other authorized institutions..
  3. Support the effectuation of compliance culture of the Bank, by means of these following activities:

    a.  Providing socialization of Compliance Code of Conduct to all branch or branch offices and working units on March 20th-31st 2017.

    b.  Providing socialization of AML-CFT implementation, particularly for customer service officers and Head of Branch or Sub-Branch Operational on July 8th 2017

    c.  Providing training of AML and CFT implementation for new joiners by means of induction training on September 9th 2017 and by means of RODP training on December 18th 2017.

    d. Formulating and conveying summary regulations on every issuance of new regulatory provisions to the overall organizational stages as well as coordinating with related working units taking charge of system and procedures.

    e. Performing Branch Comply Assessment on a quarterly basis.

    1. every working policies, guidelines and procedures had been approved by Board of Directors in which the compliance principles had been inherently relied to the working policies, guidelines and procedures as well as on each working unit.
           b. Issue the activity policies and procedures in every Working Unit.
  4. Determine the system and procedures utilized to formulate internal provisions and guidelines of the Bank, which is stipulated in the policies and procedures of SOP formulation, as per Decree of Compliance Director of Bank SBI Indonesia No. 046/DIR-COM/SKMR/XI/2016 dated on November 23rd 2016.
  5. Ensure that the Bank had been comprehensively possessing policies, provisions, system and procedures, as well as the Bank business activities that are adjusted with the provisions of Otoritas Jasa Keuangan and the prevailing law and regulations. Review of policies, guidelines and procedures is adjusted with the development of prevailing regulations and effectuated in no less than once a year.
  6. Compliance Division identifies, monitors and controls the compliance risk as per memo No.137/DIR-COM/SKK/XII/2017 dated on December 29th 2017. Referring to the monitoring results of compliance risk on 2nd semester of 2017, there was no any regulatory compliance breach towards LLL, CAR, PDN. NPL Net, Minimum Statutory Reserves, LCR and NFSR.
  7. Compliance Director attended the Board of Directors as well as Board of Commissioners meetings, where the Compliance Directors is always involved within the management’s decision-making process, except on the tune of Credit Committee decision.

Internal Audit Working Unit is an independent unit from Operational and Business units as well as from Compliance and Risk Management Working Units and is directly responsible to the President Director. Internal Audit Working Unit has the direct access to President Director and to the Audit Committee with regard to coordinate and inform any necessary matters relating to the implementation of activities and audit results. Internal Audit Division has adequately qualified manpower in order to perform their duties on an effective basis On November 2017, Bank had recruited auditor for International Banking and quality control functions.

Internal Audit possesses the internal audit guidelines, i.e. Risk-Based Bank Internal Audit Guidelines, which is grounded for the implementation of risk-based audit inspection. Apart from that, in 2017 Internal Audit Division had also formulated the Policies and Procedures concerning Internal Audit Inspection on Internal Banking. Internal Audit Division performs the inspection in looking from the side of adequacy concerning the scope of inspection object as per the adequate inspection standard and the depth of inspection. Internal Audit had formulated the working and inspection program as per the annual inspection’s priority scale and had also been approved by President Director and Board of Commissioners. The inspection plan had incorporated the assessment towards the adequacy and effectivity of Bank internal control system, inspection of various functional activity as well as performance quality assessment.

In 2017, the practical implementation of Internal Audit Working Unit is described on the table below.

NO

INTERNAL AUDIT IMPLEMENTATION

D A T E

 1

 A. WORKING PROGRAM

 

 

Inspection of Operational Head Office

28 July 2017

 

- Inspection of Melawai Sub-Branch

28 July 2017

 

- Inspection of Kebun Jeruk Sub-Branch

28 July 2017

 

- Inspection of Jatinegara Sub-Branch

28 July 2017

 2

Inspection of Bandung Branch

21 August 2017

 

- Inspection of Buah Batu Sub-Branch

21 August 2017

 3

Inspection of Surabaya Branch

19 September 2017

 4

Inspection of Medan Branch

20 October 2017

 5

Inspection of Mangga Dua Branch

29 December 2017

 6

Inspection of Pasar Baru Branch

29 December 2017

 7

Inspection of International Banking Division

02 August 2017

 8

Inspection of IT Division (BCP & DRC Review)

05 October 2017

 9

Inspection of BI-SKN & RTGS

30 March 2017

 10

Inspection of General Affair Department

28 April 2017

 

 B. OTHER ACTIVITIES

 

 1

Supporting documents for Public Accounting Office for Financial Report

January – March 2017

 2

Supporting documents for Public Accounting Office for Financial Report

January – March 2017

 3

Supporting documents for the Inspection of Otoritas Jasa Keuangan

April – September 2017

 4

Offering Selection and Preparation of Public Accounting Office for Financial Report and Review of Internal Audit Working Unit

August 2017

 5

Formulation of inspection procedures of International Banking Division

27 April 2017

 6

Follow Up of the report concerning branches inspection results

monthly

 7

Audit Committee Meeting

Monthly

 8

Report of Audit Result principles provided by Internal Audit Division or Implementation Report and semester key results of Audit Internal findings

22 February 2017 and

29 August 2017

 9

Implementation report of Anti-Fraud Implementation

04 January 2017 and 04 July 2017

 10

Review of Internal Audit function performed by Public Accounting Office of Ellya Noorlisyati and collegues

14 June 2017

 11

Audit report concerning migration of Core Banking System (Veda Praxsis)

17 April 2017

 12

Final Report of Information Technology Inspection

(Grant Thornton Indonesia)

19 May 2017

 13

Loans audit (current& on the special mention)

which potentially fall to be classified as NPL

(Non-Performing Loan)

November 2017

 14

Evaluating CKPN

November 2017

 15

Follow Up concerning review activities of Internal Audit function

December 2017

 16

Audit Profession Certification Training

December 2017

 

 C. TRAINING

 

 1

Bank Internal Audit Certification Training

30 October – 2 August 2017

 2

International Banking Training

01 – 08 March 2017

 3

Audit Profession Certification Training

December 2017

 

All of the inspection results provided by Internal Audit Division had been reported to President Director, Board of Commissioners and presented to Audit Committee meeting. Internal Audit Working Unit performs the monitoring activities on a periodic basis towards the follow up efforts done by auditee and reported to Board of Directors and Board of Commissioners.

Bank had assigned a Public Accountant and Public Accounting Office Gani Sigiro & Handayani (Grant Thornton) with regard to the formulation of 2017 financial report audit. The Public Accountant and Public Accounting Office Gani Sigiro & Handayani (Grant Thornton) is a reputable entity with having proper capacity and is registered in Otoritas Jasa Keuangan. The selection process had been performed as per the prevailing provisions.

The audit monitoring activities for Public Accounting Office had fulfilled these following aspects that are as follows.

  1. Capacity of the assigned Public Accounting Office
  2. Legality of working agreement
  3. Scope of Audit
  4. Professionality standard of Public Accountant
  5. Communication between Otoritas Jasa Keuangan and Public Accounting Office

Audit results provided by P Public Accountant and Public Accounting Office Gani Sigiro & Handayani (Grant Thornton) had elucidated the challenges faced by the Bank and reported on a timely basis to Otoritas Jasa Keuangan. Scope of audit results provided by Public Accounting Office had been suitable with the scope of inspection and as per the prevailing provisions.

The business activities performed by Bank are sustainably exposed to the risks concerning to its function as a financial intermediary institution. Rapid development of internal and external environment in banking leads to a more complex banking business activity. Hence, in order to be able adapting with the banking business environment, Bank SBI Indonesia shall implement the proper risk management system.

The essence of risk management implementation is the adequacy of procedures and methodology of risk management, thereby the business activities of the Bank would be feasibly managed on the acceptable and profitable limit.

Bank possesses an organizational structure in order to support the risk management implementation as well as the internal control, amongst others are Risk Management Division, Internal Audit Division, Compliance Division and Risk Management Committee.

With regard to active monitoring activities, Board of Commissioners and Board of Directors monitor the risk management implementation towards the implementation of risk management policies and strategies as follows.

  1. Board of Commissioners had approved the Risk Management Implementation Guidelines
  2. Board of Commissioners had evaluated the risk management policies and risk management strategies reflected from the recommendation results within Board of Commissioners meeting as well as within the Risk Monitoring Committee whose members encompassing the Commissioners who discuss the inherent risk condition related to the Bank operational activities.
  3. Board of Commissioners assessed the responsibility evaluation of Board of Directors and provided constructive directions concerning risk management implementation reflected from the results of Coordination Meeting between Board of Commissioners and Board of Directors, which encompasses the credit risk management with regard to NPL settlement, effectuation of risk culture socialization, compliance culture of sustainable regulations.
  4. Board of Directors formulated the risk management policies and strategies stipulated within Risk Management Implementation Guidelines
  5. Updates of procedures have been effectuated for Bank operational activities in relation to improve the risk control system
  6. With regard of the formulation and assignment of transaction approval mechanism, comprising those which exceed the limit and authority for each of position level had been asserted within policies and procedures concerning Bank operational activities, in which the authority of transaction approval with the “Dual Control” or segregation of duty concept is employed as per the risk control mechanism of each of the level of position.
  7. Evaluating the Risk Management Implementation Guidelines which comprise policies, strategies and framework of risk management, prior to the effectuation of periodic review activities in order to assess the adequacy of such aforementioned guidelines relating to the business development and external regulatory adjustment.
  8. Determining the organizational structure with regard to the risk management implementation which elucidates that the Risk-Taking Unit as Risk Owner have been acting independently from the Risk Management Working Unit, Compliance Working Unit as well as Internal Audit Working Unit.
  9. Board of Directors is responsible towards the effectuation of risk management implementation related to each of Bank operational activity according to risk profile rating, in determining corrective efforts with regard to risk control. This could be reflected from the results of Board of Directors meeting which oblige the related working units to conduct follow up endeavors to the tune of risk control.
  10. Board of Directors had been performing follow up efforts or corrective endeavors and settlement of material risk as well as conveying the report concerning the aforementioned matters within the coordination meeting between Board of Directors and Board of Commissioners, in evidently proved by the establishment of Task Force Team from NPA Working Unit which coordinates with branches and business units under the intention of NPA settlement, comprising AYDA or write-offs, so that the Bank would further be able to correct its performance as per the stipulated target.
  11. With regard to the risk management and risk control, Bank had possessed the sufficient capital adequacy with the CAR position of December 2017 is on the tune of 41.61%
  12. There is a firm functional segregation between Risk Management Working Unit and Risk Taking Unit as per the risk owner with regard to risk management.

On the extent of adequacy of risk management policies and procedures as well as the determination of risk limit, Bank possesses the Risk Management Implementation Guidelines which is formulated based on the regulations of Otoritas Jasa Keuangan No. 18/POJK.03/2016 as well as SEOJK No.34/SEOJK.03/2016.

Bank had assigned the risk limits as per the risk control system as detailed as follows.

  1. Internal Limit of LLL to related parties, individual of unrelated parties and group of unrelated parties
  2. NOP Limit
  3. Credit Concentration Limit on economic sector
  4. Minimum Statutory Reserves Limit
  5. Credit Approval Limit for particularly back to back loan, while the others have to be through the approval of Credit Committee
  6. Determination of internal credit rating and SME scoring
  7. Cost authority limit
  8. Operational transaction limit stipulated within core banking system or any other applications
  9. Counterparty limit
  10. Limit of marketable securities investment, comprising the rating of marketable securities
  11. LCR Limit
  12. NSFR Limit
  13. KPMM (Minimum Mandatory Capital Requirements) Limit as per Risk Profile

Adequacy concerning the process of risk identification, measurement, monitoring and control as well as the risk management information are the substantial part within the risk management implementation process which covers the overall bank business activities with regard to analyze the source and potential occurring of any risks as well as its possible impact.

Updating activities toward the tools for identification, measurement and monitor as well as the control of risk had been effectively performed, amongst others are on the tune of credit rating determination and SME credit scoring employed on an internal basis by the Bank with regard to the enhancement of measurable risk identification, which further employed as base of recommendation within credit process or as one of the risk control efforts.

Based on the self-assessment results concerning the inherent risk rating as well as the quality of risk management implementation for the overall risk types, the overall composite risk rating is “2” according to the effective conduct of considerable efforts.

Risk management information system is a management information system owned and developed as per the requirements, on the extent of effective risk management implementation.

The internal control system inherently is connected to the overall working units as per the three line of defense concept. The aforementioned controlling elements are also attached to the policies and procedures of Bank operational activities, e.g. the dual control practical implementation (maker, checker and approval).

Bank had possessed the sufficient written policies, system and procedures with regard to the fund provision to related parties as well as large exposures, comprising the monitoring process and settlement efforts.

System and procedures of fund provision to related parties and large exposures are evaluated and updated on a periodic basis in line with the evaluation and update of credit policies and procedures in general.

The credit provision process to related parties and in large exposures had been effectuated based on the prudential principles and as per the prevailing credit policies. The decision-making process within the fund provision is performed on an independent basis without any intervention and pressure from related parties or any other parties.

For the period of 2017, the fund provision to related parties and to the core debtors/groups are as follows.

 

No

 

Fund Provision

T o t a l

Debtor

Nominal (in IDR mio)

1

To related parties

8

2.058

2

To Core Debtor:

 

 

 

a. Individual

13

882.054

 

b. Group

2

355.503

Strategic Plan of Bank SBI Indonesia has been formulated by Board of Directors and approved by Board of Commissioners In the form of Business Plan which is in line with the vision and mission of the Bank. The Bank Business Plan as well as its realization had been effectively communicated to the controlling shareholders and to the overall Bank organizational stages.

The business plan is formulated on a realistic, comprehensive, quantifiable basis which takes into account the composite risk rating, considering the prudential principles and is responsive in nature towards the internal and external fluctuations which could possibly affect the Bank business continuity.

The formulation of Bank Business Plan is grounded on the account of policies and strategies of Bank SBI Indonesia, which comprises the managerial policies, policies of risk management and compliance, business development strategies as well as referring to the provisions of Otoritas Jasa Keuangan in taking into account these following factors as pointed as follows.

  1. External and Internal factors which could possibly affect the Bank business continuity
  2. Prudential principles
  3. Risk Management implementation
  4. Sound banking principles.

The Business Plan of Bank SBI Indonesia had been approved by the Board of Commissioners and Board of Directors as well as been well communicated to the Controlling Shareholders and the overall organizational stages in the Bank.

Realization of Bank Business Plan on the position of December 2017 (unaudited) is as follows.

Component

Actual

December 2017

Target

December 2017

Variance

DPK

     

Credit

     

Asset

     

Profit

     

NIM

4,68%

4,45%

0,23%

ROA

2,25%

0,87%

1,38%

ROE

7,49%

3,12%

4,37%

 

Bank had recorded profit until December 2017 that is on the tune of IDR 88,86 bio, evidently higher by 144,45% compared to the target which was on the tune of IDR 36,35 bio

Board of Commissioners monitors the business plan based on the performance report of the Bank and discourser communication is made thereof, in the coordination meeting.

Bank SBI Indonesia had provided the overall financial and non-financial conditions on a transparent basis to the stakeholders, comprising the announcement of quarterly publication and reporting them to Otoritas Jasa Keuangan as well as to the stakeholders as per the prevailing provisions.

A. Shares Ownership, Financial Relationship and Family Relationship of Board of Commissioners and Board of Directors

All members of Board of Commissioners and Board of Directors do not possess the shares whose percentage is on the tune of 5% or more on the Bank or on another company domiciled both in domestic or foreign country.

All members of Board of Commissioners and Board of Directors do not possess any financial relationship nor family relationship with another member of Board of Commissioners and Board of Directors and/or has any position as the Bank Controlling Shareholders.

B. Shares Option and Buy Back Shares

Throughout 2017, there were no shares option nor buy back shares performed by members of Board of Commissioners, Board of Directors, Executive Officers as well as the employee of the Bank. As per the Articles of Association of Bank SBI Indonesia, there were no regulations concerning share options or buy back shares.

C. Conflict of Interest, Internal Fraud as well as Legal Problems

Throughout 2017, there were no any report concerning transaction made by Board of Commissioners, Board of Directors and Executive Officers which contain any conflict of interests.

Bank has been sufficiently having adequate settlement policies, system and procedures concerning the conflict of interest binding each of management and employee of the Bank. By the issuance of policies concerning conflict of interest, it is considerably expected that the risk loss level of the Bank would be further decreased.

TRANSACTION WITH CONFLICT OF INTEREST

 

No.

Name and position of person involved in the conflict of interest

Name and position of decision maker

Types of transaction

Transaction value (in IDR mio)

Description

-

Nil

Nil

Nil

Nil

Nil

 

                                                               INTERNAL FRAUD

Internal Fraud in a year

Number of cases committed by

 

Management

Permanent Staff

Non-Permanent Staff

 

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Total Fraud

0

0

0

0

0

0

Completely Settled

Nil

Nil

Nil

Nil

Nil

Nil

Under the Internal Settlement Process

 

Nil

 

Nil

 

Nil

 

Nil

 

Nil

 

Nil

Not yet been settled

Nil

Nil

Nil

Nil

Nil

Nil

Followed Up by legal process

Nil

Nil

Nil

Nil

Nil

Nil

 

                                                      LEGAL ISSUE REVELATION

 

L e g a l   I s s u e s

T o t a l    c a s e s

C i v i l

C r i m e

Received the verdict, which has a binding legal force

1

-

In an on-going process

-

-

Total

1

-

Bank SBI Indonesia did not provide any amount of fund for any political purposes. The fund provision for social or pedagogical activities are as follows.

  1. Donation in the form of free note books to the schools in needs under the affiliation with UNESCO amounting to IDR 20 mio
  2. Charity for orphans and dhuafa under the affiliation with BAPEKIS of Graha Mandiri Building, amounting to IDR 6.000.000
  3. Donation of Indian Women’s Association on the amount of IDR 2 mio
  4. Donation for orphans in an affiliation with Ikatan Bankir Indonesia (IBI) on the amount of IDR 2.500.000

Self-Assessment Results concerning Good Corporate Governance Implementation

 

Rating

Rating Definition

 

 

Individual

 

 

2

Rating of corporate Good Corporate Governance (individual) is 2 (good), asserting that the Management of Bank SBI Indonesia had effectuated the proper implementation of Good Corporate Governance in general. The presence of weaknesses within the implementation of Good Corporate Governance principles is evidently considered insignificant in affecting the operational activities of the company, which could be well settled by the management.

Analysis

Conclusions concerning the assessment of Good Corporate Governance implementation on a comprehensive and well-structured basis, comprising the Governance Structure, Governance Process and Governance Outcome are as follows.

Governance Structure

The structure and infrastructure concerning the Good Corporate Governance of the Bank had fulfilled the overall prevailing provisions. Apart from the establishment of committees in an effort to support the monitoring function of Board of Commissioners as per the prevailing provisions, Bank also established the committees with regard to encourage the effective implementation of duties and responsibilities of Board of Directors on the account of corporate operational activities.

Policies and procedures, information system of management as well as the key duties and function of each organizational structures are considerably arranged based on the risk-based regulations and working framework which suit the organizational level of the company.

Governance Process

The structure and infrastructure concerning the Good Corporate Governance of the Bank engage on an effective basis, as per the role of duties and responsibilities according to the Good Corporate Governance principles, prudential principles as well as risk management implementation.

Governance Outcome

Adequacy of report transparency, compliance towards the prevailing law and regulations and the performance of the Bank is managed as per the prevailing provisions and supported by adequate structure and infrastructure of Good Corporate Governance of the Bank.

Bank is very much committed to effectuate the corrective efforts in order to support the business continuity of the company. Follow Up endeavors that would be conducted by the Bank in order to implement the effective Good Corporate Governance are elucidated as follows.

  • Board of Commissioners and Board of Directors effectuate the necessary efforts and implement the considerable strategies, so that the financial and non-financial performances of the Bank stipulated on the Bank Business Plan would be efficiently achieved.
  • Monitoring between the realization compared to Bank Business Plan targets are discussed in the Board of Directors meeting as well as with the related Working Units, thereby the challenges faced by the Bank would be promptly followed by corrective efforts.
  • Effectuating sustainable efforts towards credit management, thereby the NPL ratio would considerably be controlled as per the Bank Business Plan, including the NPL and foreclosed collateral settlement efforts, since that it affects the rentability and capital factors of the Bank
  • Engaging in considerable efforts, so that any similar internal and external audit findings would not be encountered in the future, by means of effectuating corrective endeavors which amongst others are encompassing the revision of policies and procedures, enhancement of Direct Supervision monitoring function, the enhancement of Internal Control function with regard to perform daily transaction assessment.

 

 
 
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For More Information Please Contact 
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