T

he Indonesian Chambers of Commerce and Industry (Kadin) is welcoming, with some caveats, a Bank Indonesia regulation requiring exporters to deposit foreign exchange earnings in local banks, a Kadin member says.

“We have no problem with the regulation. However, we often have issues with local banks that have yet to properly introduce the regulation and its mechanism to exporters,” Kadin member Ade Sudrajat, who is also the chairman of the Indonesian Textile Association (API), said during a discussion with Bank Indonesia in Jakarta on Thursday.

Under the central bank’s regulation, exporters must deposit their foreign currency earnings with local banks within 90 days of receiving payments.

Local exporters reportedly deposit their foreign currency-denominated export earnings in overseas financial institutions to take advantage of higher returns.

Last year, total export earnings reached US$29 billion.

“We also need to know who should report to the central bank. Often, exporters have actually put their forex earnings in local banks, but the banks failed to report about this to Bank Indonesia timely, causing potential misunderstandings between the central bank and businesses,” Ade added.

The regulation stipulates that exporters who fail to report and submit their forex earnings to local banks within the 90-day time frame must pay a fine worth 0.5 percent of the earings.

The fines, which were capped at Rp 100 million (US$10,700) and have a minimum value of Rp 10 million, went into effect on July 2.

Ade said that Bank Indonesia should be lenient with exporters as the regulation came into force to allow businesses time to adapt.

“If possible, we need more than 90 days to put our forex earnings in local banks. In some industries, the payment system takes more than 90 days to be completed. Therefore, we still need to learn more, so that we can prepare ourselves to fully comply with the regulation,” he said.

Meanwhile, Hendy Sulistyowati, the executive director of Bank Indonesia’s economic statistics and monetary department, acknowledged that the central bank still had a lot of homework to do to promote the regulation and develop an implementation mechanism for local banks.

“We have been promoting the regulation to local banks for months, but some banks have so many branches that a complete adaptation and introduction to the regulation might need more time,” Hendy said.

Hendy also said that there was no need for exporters to worry about having their earnings debited by their local banks if they complied with the regulation in a timely manner.

“What exporters must know is that banks are not authorized to impose sanctions. Bank Indonesia will be the one confirming the banks on whether your forex earnings have been deposited or not,” Hendry said.