Changes to Indonesia's financial sector supervisory regime have placed OJK as the principal authority in bankruptcy and PKPU proceedings involving certain financial services institutions, including banks.

Introduction

Bankruptcy is a legal mechanism used when a debtor is no longer able to meet its debt payment obligations in accordance with applicable law. In ordinary cases, a bankruptcy petition may be filed by the debtor itself or by one or more of its creditors, provided that the requirements for bankruptcy are satisfied. However, these rules do not apply universally. For certain debtors operating in the financial services sector, the law provides specific rules determining who is authorized to file a bankruptcy petition.

Banks are among the categories of debtors that have long been placed under a special regime. This is related to the nature of banks as institutions that collect funds from the public and have a direct connection to financial system stability. For this reason, bankruptcy proceedings against a bank cannot be treated in the same manner as proceedings against an ordinary company. The institutional transition from Bank Indonesia to the Financial Services Authority has also resulted in an important change regarding the authority entitled to file a bankruptcy petition.

Bankruptcy Regulation under Law No. 37 of 2004

Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations defines bankruptcy as a general attachment over all assets of a bankrupt debtor. The administration and liquidation of those assets are carried out by a curator under the supervision of a supervisory judge.

In general, a debtor may be declared bankrupt where it has at least two creditors and has failed to fully pay at least one debt that has become due and payable.

Under the original provisions of the Bankruptcy Law, where the debtor was a bank, a petition for a declaration of bankruptcy could only be filed by Bank Indonesia. This rule confirmed a restriction on the right of creditors to directly seek the bankruptcy of a bank.

The purpose of this restriction was to ensure that legal action against a bank would not create disruption that could adversely affect customers, markets, or the stability of the financial sector more broadly.

However, this framework was subsequently amended.

The provision designating Bank Indonesia as the sole authority permitted to file a bankruptcy petition against a bank was revoked through the Financial Sector Development and Strengthening Law.

This change was consistent with the transfer of banking regulation and supervision functions, which had previously been exercised by Bank Indonesia, to the Financial Services Authority.

Transfer of Supervision from BI to OJK

The Financial Services Authority was established as an institution responsible for carrying out integrated regulation and supervision of activities in the financial services sector.

In the banking sector, OJK has a role in issuing regulations, conducting supervision, establishing policies, issuing written orders, regulating statutory management, and imposing sanctions in accordance with applicable laws and regulations.

The transfer of supervisory functions did not merely involve the transfer of administrative duties.

Subsequent regulatory developments expanded OJK's authority, including its role in relation to bankruptcy proceedings and the suspension of debt payment obligations.

Under the more recent regulatory framework, OJK's position has become increasingly important because it has been granted exclusive authority to file bankruptcy petitions against certain debtors operating in the financial services sector.

OJK as the Authority Entitled to File Bankruptcy Petitions

Through amendments to the Financial Services Authority Law, as reinforced by Law No. 4 of 2026, OJK is expressly designated as the sole authority entitled to file a petition for a declaration of bankruptcy and/or a petition for suspension of debt payment obligations against a number of financial services institutions.

Banks are among the institutions covered by this authority.

This means that a bank's creditors cannot directly file a bankruptcy petition against the bank in the same manner as they may against an ordinary company.

Even where a creditor has a receivable that has become due and payable, bankruptcy proceedings against a bank remain subject to the special legal regime.

OJK acts as the authority responsible for assessing the circumstances and filing the relevant petition with the court where the applicable conditions and legal grounds have been satisfied.

This exclusive authority is not limited to banks.

The same regulatory framework covers a range of participants in the financial services sector, including securities companies, stock exchanges, clearing and guarantee institutions, insurance and reinsurance companies, pension funds, financing institutions, microfinance institutions, information technology-based lending service providers, and certain participants involved in digital financial assets and crypto assets that are supervised by OJK.

Nevertheless, its application remains subject to whether another law provides a different mechanism for the dissolution or bankruptcy of the relevant institution.

Why Is This Authority Centralized in OJK?

The centralization of the authority to initiate bankruptcy proceedings in OJK is closely connected to the protection of the public interest.

Banks and financial services institutions manage public funds and are connected with a large number of stakeholders.

Bankruptcy proceedings initiated without appropriate controls could potentially trigger panic, liquidity disruption, large-scale withdrawals, or a chain reaction affecting other financial institutions.

For this reason, the law positions the financial sector authority as the principal gateway before bankruptcy proceedings are brought before the court.

OJK also has access to supervisory data, information concerning the financial health of financial institutions, capital levels, asset quality, liquidity, governance, and the risks faced by banks.

This position allows OJK to conduct a more comprehensive assessment than an individual creditor could ordinarily undertake.

In this context, the authority to file a bankruptcy petition is not merely treated as a procedural right. It also functions as an instrument of supervision and as a mechanism for protecting financial system stability.

Implications for Bank Creditors and Customers

For creditors, the existence of this special regime means that claims against a bank cannot be resolved by directly filing a bankruptcy petition.

Creditors must take into account the available mechanisms under banking and financial services regulations.

Where the condition of a bank reaches a stage at which bankruptcy or PKPU proceedings are considered necessary, OJK is the authority empowered to bring the petition before the court.

For customers, this mechanism provides an additional layer of protection because the decision to bring a bank into bankruptcy proceedings rests with the authority that is responsible for supervising the health and continuity of the financial services sector.

Although this does not eliminate all risks, the framework is intended to ensure that legal proceedings involving banks are conducted in a measured and coordinated manner while taking broader interests into consideration.

Conclusion

The authority to file bankruptcy petitions against banks has changed alongside institutional reforms in Indonesia's financial sector.

While the Bankruptcy Law previously designated Bank Indonesia as the party entitled to file a bankruptcy petition against a bank, that provision was subsequently revoked and replaced by a framework that places OJK as the primary authority.

Under the latest provisions, OJK is the sole authority entitled to file a petition for a declaration of bankruptcy and/or PKPU against a debtor that is a bank.

Accordingly, a bank's bankruptcy cannot be initiated directly by creditors in the same manner as bankruptcy proceedings against an ordinary company.

This special framework reflects the strategic nature of the banking industry and the need to maintain customer protection, legal certainty, and the stability of the national financial system.