General and Other Expenses

BANK INDONESIA Notes to Financial Statements As at December 31, 2008 45

37. Capital Ratio

The ratio of Capital Capital, General Reserves, and Current Year Surplus to Monetary Liabilities as at December 31, 2008 was 10.38. The Capital and Monetary Liabilities used in the Capital Ratio calculation at December 31, 2008 amounted to IDR72,798,810 million and IDR701,524,534 million, respectively. The Capital, Monetary Liabilities, and Capital Ratio as at December 31, 2008 is as follows: IDR million a. Capital - Capital 7,610,885 - General Reserves 49,663,865 - 90 of Current Year Surplus 15,524,060 Total 72,798,810 b. Monetary Liabilities - Currency in Circulation 264,399,922 - Government Demand Deposits 97,228,550 - Bank Demand Deposits 85,197,077 - International Financial Institutions Demand Deposits not including IMF Demand Deposit, World Bank Demand Deposit, and ADB Demand Deposit 652,491 - Bank Indonesia Certificates 253,840,471 - Loans from Government 206,023 Total 701,524,534 c. Capital Ratio Capital + General Reserves + 90 of Current Year Surplus Monetary Liabilities = 10.38 BANK INDONESIA Notes to Financial Statements As at December 31, 2008 46

D. Others 1. Related Party Transactions

Related party transactions consisted of: December 31, 2008 December 31, 2007 IDR million IDR million - Claims on Indover Bank 1,487,235 1,283,528 - Employee loans 408,097 306,274 1,895,332 1,589,802 Furthermore, there is LandBuilding used by the Indonesia Banking Development Foundation Yayasan Pengembangan Perbankan Indonesia YPPI Bank Indonesia’s Employee Welfare Foundation Yayasan Kesejahteraan Karyawan Bank Indonesia YKKBI Bank Indonesia Retired Empoyees Association Persatuan Pensiunan Bank Indonesia – PPBI Bank Indonesia KORPRI Unit Foundation Yayasan Perguruan KORPRI Unit Bank Indonesia - YASPORBI Bank Indonesia Employee’s Wives association Persatuan Isteri Pegawai Bank Indonesia PIPEBI in the form of loanrentbuild, operate and transferred BOT.

2. Employee Welfare Funds

Based on Act of the Republic of Indonesia Number 13 of 1968, article 47 paragraph 6, Bank Indonesia is obliged to allocate 7.5 of its after-tax income that has been validated to employee welfare funds Dana Kesejahteraan Pegawai - DKP. DKP is a source of employee loans. Meanwhile, the remainder of the idle funds are placed in time deposits and government bonds. Based on the Governor of Bank Indonesia Decree Number 311KEPGBIINTERN2001 dated June 29, 2001, YKK-BI was appointed as the fund manager of DKP. As at December 31, 2008, the balance of DKP amounted to IDR864,251 million, which consisted of Bank Indonesia employee loans amounted to IDR408,097 million, undistributed funds for employees amounted to IDR5,872 million and funds managed by YKK-BI amounted to IDR450,282 million.

3. Commitments and Contingencies a. Two Step Loans

Two Step Loans TSL are loans from financial foreign institutions, such as World Bank, Japan Bank for International Cooperation and Asian Development Bank, for the Government of the Republic of Indonesia to be channeled to banks through Bank Indonesia. The role of Bank Indonesia in these credit schemes is as the account