# Regulatory Summary for Micro Banking & Digital Banking  
**POJK No. 25 of 2021 – Implementation of Products by Rural Banks (BPR) and Sharia Rural Banks (BPRS)**

## 1. Regulatory Scope
- Governs the implementation of **products and services** by:
  - Rural Banks (BPR)
  - Sharia Rural Banks (BPRS)
- Aimed at supporting:
  - Micro and small business financing
  - Financial inclusion
  - Technology-based financial innovation

## 2. Product Classification
BPR/BPRS products are classified into:

### A. Basic Products
- Fund collection: savings, time deposits
- Fund distribution: loans / financing
- Fund placement
- Other basic services (payments, transfers, financial cooperation)

### B. Advanced Products
- Technology-based (digital) products
- Products that affect the bank’s risk profile
- Products developed through cooperation with third parties (fintech, agents, platforms)

## 3. Technology-Based (Digital) Banking Products
Includes:
- Mobile banking, internet banking, SMS banking
- Branchless banking / agent-based services
- System integration with third parties (API, channeling)
- Cooperation with technology-based lending platforms

> This regulation forms the legal foundation for digital micro banking services.

## 4. Principles of Product Implementation
BPR/BPRS must:
- Apply **risk management**
- Implement **good corporate governance**
- Establish written policies and SOPs covering at least:
  - Business objectives and customer needs
  - Risk identification and mitigation
  - Accounting and information systems
  - Third-party evaluation (if applicable)
  - Ongoing product risk monitoring

## 5. New Products & Innovation
- A product is classified as **new** if:
  - It has never been implemented before, or
  - It involves significant development or changes
- New products must:
  - Be included in the business plan
  - Be reported to OJK
  - Be supported by risk analysis and capital impact assessment

## 6. Reporting & OJK Supervision
- Advanced products must be reported to OJK **within 10 working days**
- OJK has the authority to:
  - Order product termination
  - Reject or revoke product approval
- Late reporting penalties:
  - IDR 100,000 per day
  - Maximum IDR 5,000,000 per product

## 7. Consumer Protection
- Banks must implement:
  - Financial consumer protection principles
  - Transparency of product benefits and risks
- Serious violations may affect the bank’s health rating

## 8. Specific Provisions for Sharia Rural Banks (BPRS)
- Must comply with **Sharia principles**
- Each new product must:
  - Obtain approval from the Sharia Supervisory Board
  - Use contracts compliant with DSN-MUI fatwas
  - Clearly define profit-sharing ratios, margins, fees, penalties, and collateral in a Sharia-compliant manner

## 9. Relevance to Micro & Digital Banking Systems
This regulation serves as the legal basis for:
- Digital product legality for BPR/BPRS
- Micro core banking system design
- API integration with fintechs and agents
- System-based risk management
- Digital banking compliance in the microfinance sector

> POJK No. 25 of 2021 is a core regulatory framework for digital innovation in Indonesia’s micro banking ecosystem.