The Central Bank (“BI”) has recently issued Regulation No. 7/7/PBI/2005 (the “Regulation”) address the issue of increasing numbers of customer complaints and to define the rights of customers to have their complaints heard and dealt with.

Banks are obligated to complete all customer’s complains. For such purposes all Banks must adopt necessary written procedures concerning (a) complain acceptance, (b) management and settlement of complains and (c) monitoring of management and complain settlement. Bank’s directors shall be responsible to implement such procedure. The Regulation also requires banks to establish special units in performing such function, and that the existence of such units shall be publicized.

The Regulation stressed that complain can be made both in written or in verbal. When done in written, it shall be accompanied by a copy of identity card and other supporting documents. Verbal complains shall be settled within two working days. When the Bank fails to settle verbal complain within 2 working days, it must request the complaining customer to do it in writing. Bank’s official must explain the procedure of complain towards complaining customer.

Banks must provide receipt to complaining customer, indicating that their complains has been accepted. Such receipt must contains (a) registration number of customer, (b) date of complain, (c) names of the customer, (d) names and phone numbers of Bank official accepting the complain, (e) short description concerning the complain. The receipt must also be signed by the officer in charge. Banks shall keep all complain database up to date.

All complains must be settled within 20 working days after the reception of written complain. Banks may extend such term for another 20 working days. If the complain involves bank official in charge in accepting such complain, the complain must then be settled by another higher level officials. The status of the settlement must be explained to the customers. Result of the settlement shall be informed to the customers and it shall includes (a) registration number of the complain, (b) the problem and (c) result of the settlement.

Banks must report quarterly to BI the number of complaints accepted and settled in accordance with the relevant form that is to be issued by BI. The late submission of reports will incur fines ranging from IDR 1 million per day up to a maximum of IDR 30 million for the failure to submit a report or the submission of a false report. Community credit banks fines only ranges from IDR 100 thousand to IDR 250 thousand. This Regulation does not apply to Village Credit Boards. 6 months after its enactment, 20 July 2005, this Regulation will enter into force.