Allowance for Bad Debts

BANK INDONESIA Notes to Financial Statements As at December 31, 2008 33

15. Currency in Circulation

Currency in Circulation is valid payment instrument not under possession of Bank Indonesia with a position as at December 31, 2008 and December 31, 2007 amounted to IDR264,399,922 million and IDR220,794,779 million respectively with details as follows: December 31, 2008 December 31, 2007 IDR million IDR million Printed Money: 319,010,796 279,158,691 - Bank Notes - Coins 316,004,689 2,995,614 276,312,782 2,835,416 - Special edition 10,493 10,493 Currency withdrawn from circulation 920,998 1,834 Currency inventory 53,673,281 58,361,352 Others 16,595 726 Currency in circulation 264,399,922 220,794,779

16. Government Demand Deposits

In performing its function as the account holder of the Government, Bank Indonesia manages Government demand deposits, with details as follows: December 31, 2008 December 31, 2007 IDR million IDR million In Rupiah 32,053,286 11,012,224 In Foreign Currency 65,175,264 10,906,136 97,228,550 21,918,360 a. Government demand deposits in Rupiah as at December 31, 2008 included as follows: 1 General State Treasury Bendaharawan Umum Negara - BUN account amounted to IDR26,714,560 million, including sub BUN account for the purpose of guarantee program amounted to IDR83,443 million raised from the issuance of SUP Number SU-004MK1999. 2 Government account for accrued interest on subsidy of credit program amounted to IDR1,203,327 million. b. Government demand deposits in foreign currency as at December 31, 2008 included State Cash Account amounted to USD3,822,775,722.45 or equivalent to IDR41,859,394 million and IMF account for SDR allocation amounted to SDR238,956,000.00 or equivalent to IDR4,049,951 million. BANK INDONESIA Notes to Financial Statements As at December 31, 2008 34 For Government demand deposits, Bank Indonesia has not yet provided interest as stated in Act of Republic of Indonesia Number 1 of 2004 concerning State Treasury, Article 23, paragraph 1, because Bank Indonesia and the Government are still discussing the issue.

17. Bank Demand Deposits

Bank demand deposits are the balance of demand deposits of commercial banks in order to comply with Minimum Reserve Requirement Giro Wajib Minimum - GWM. GWM is regulated by Bank Indonesia Regulation Number 1019PBI2008 dated October 14, 2008 concerning Minimum Reserve Requirement of Commercial Banks in Bank Indonesia in Rupiah and Foreign Currency. As stated in Bank Indonesia Regulation Number 1025PBI2008 dated October 23, 2008 concerning the Amendment of Bank Indonesia Regulation Number 1019PBI2008, GWM in Rupiah is determined at 7,5 of Third Party Funds Dana Pihak Ketiga - DPK in Rupiah, while GWM in foreign currency at 1 of DPK in foreign currency. Bank Indonesia provides compensation for the part of the balance of bank demand deposits account in Rupiah that is intended to fulfill the obligation of additional GWM in Rupiah. As of October 24, 2008, as stated in Bank Indonesia Regulation Number 1025PBI2008 dated October 23, 2008, Bank Indonesia does not provide compensation for the balance of bank demand deposits in Rupiah in Bank Indonesia. The obligation to maintain GWM in Rupiah and in foreign currency is also applied to banks that perform their activities based on Sharia Principles Sharia banks, including banks and the representative offices of banks whose head office is domiciled overseas foreign banks that perform their activities based on conventional and Sharia Principles referred to as Sharia Business Units Unit Usaha Syariah – UUS. According to Bank Indonesia Regulation Number 6212004 dated August 3, 2004 concerning Minimum Reserve Requirement in Rupiah and Foreign Currency for commercial banks that perform their activities based on sharia principles, as amended by Bank Indonesia Regulation Number 1023PBI2008 dated October 16, 2008, GWM in Rupiah for Sharia Banks is determined at 5 of DPK in rupiah and GWM in foreign currency is determined at 1 of DPK in foreign currency. Other than that, for Sharia banks with DPK more than IDR1 trillion and the ratio of funding in Rupiah to DPK in Rupiah is less than 80, additional GWM in Rupiah is applied at 1, 2, and 3, depending on the amount of DPK of the banks. Bank Indonesia does not provide compensation to the balance of bank demand deposits account of Sharia banks. Bank Demand Deposits as at December 31, 2008 and December 31, 2007 were as follows: December 31, 2008 December 31, 2007 IDR million IDR million In Rupiah 79,678,015 158,668,351 In Foreign Currency 5,519,062 9,944,049 85,197,077 168,612,400