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Indonesia’s Banking Secrecy vs Transparency: A Delicate Balance

November 8, 2017

Indonesia has strict confidentiality obligations for its banks when it comes to their customers’ financial information. According to Law No. 7 of 1992 regarding Banking, as amended by Law No. 10 of 1998, banks and their affiliates are required to keep confidential any information related to depositing customers, including the sums deposited.

Confidentiality Obligations

Banks are bound by strict confidentiality obligations when it comes to their customers’ financial information. This includes:

  • Personal data such as name, address, date of birth, phone number, and other identifying information
  • Information related to depositing customers, including the sums deposited

To share this information with third parties for commercial purposes, banks must obtain written consent from customers, unless otherwise stipulated by law.

Exceptions to Confidentiality

However, there are circumstances in which bank secrecy can be waived. The Banking Law and BI Regulation No. 2/19/PBI/2000 regarding Requirements and Procedures to Grant Written Orders or Approval to Disclose Bank Secrets allow for disclosure of confidential information in cases such as:

  • Taxation purposes
  • Settling debts with government agencies
  • Court proceedings
  • Requests from the customer themselves

In these situations, the disclosed information can be shared with various parties, including:

  • Other banks
  • Law enforcement agencies
  • Judges
  • Heirs of deceased customers

The Delicate Balance

The delicate balance between banking secrecy and transparency is a critical issue in Indonesia, where the need for confidentiality must be weighed against the importance of protecting consumers’ rights and promoting financial stability. As the country continues to develop its financial sector, it will be important to strike this balance effectively.

Conclusion

For more information on bank secrecy and data protection compliance in Indonesia, please contact Winnie Yamashita Rolindrawan at Soewito Suhardiman Eddymurthy Kardono.