Capital Ratio Employee Benefits

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 BANK INDONESIA Notes to Financial Statements As at December 31, 2008 47 holder of the Government, to distribute the loans and to collect payments from the local banks. Thus, these local banks bear the credit risk and distribute the loans to qualified debtors. The letter of the Minister of Finance Number S-2147LK2000 dated May 16, 2000 stated that Bank Indonesia only acts as the executing agent of these schemes and therefore bear no credit risk. The borrower of TSL is the Government of Republic of Indonesia, except for the borrower of loans from EXIM Taiwan, which is Bank Indonesia and in turn channeled to Bank Bukopin. TSL is distributed to recipient banks in IDR, USD and EUR with balance as at December 31, 2008 equaled to IDR938,488 million. There were also Government claims to State-owned Enterprises Badan Usaha Milik Negara - BUMNRegion-owned Enterprises Badan Usaha Milik Daerah - BUMDRegional Government Pemerintah Daerah – Pemda, where the SLAs were signed by Bank Indonesia based on authorization from Minister of Finance for the purpose of Project Aid. The fund was originated from Foreign Exchange Loan FEL and Investment Fund Account Rekening Dana Investasi - RDI with outstanding value as at December 31, 2008 equaled to IDR680,525 million.

b. Foreign Currency Transactions

As at December 31, 2008, commitment receivables and commitment payables of marketable securities, time deposits, and spot trading were equal to IDR204,979 million and IDR1,297,575 million, respectively.

c. Bank Indonesia as a Legal Entity

Bank Indonesia’s position as an independent state institution as stated in Act of the Republic of Indonesia Number 23 of 1999 concerning Bank Indonesia as amended by Act of the Republic of Indonesia Number 3 of 2004 gives logical judicial consequence that Bank Indonesia has the authorities to regulate or formulateissue regulations that are derived from Acts and binds every individual or entity in the Republic of Indonesia. Furthermore, in order to enhance legal development in the economic, banking and monetary sectors, Bank Indonesia also participates as advisor in the preparation of act drafts, composing academic scripts and performing disseminations, particularly in relation with Bank Indonesia’s tasks. In order to perform the tasks and authorities of Bank Indonesia, the Board of Governors of Bank Indonesia provides legal protection to persons performing official duties members and ex-members of Board of Governors or Directors, employees and ex-employees, local staffs and ex-local staffs, as well as temporary and ex- temporary employees as stated in the Board of Governors Regulation PDG of Bank Indonesia Number 716PDG2005 dated July 13, 2005 concerning Law Protection in Relation to Performing Official Duties of Bank Indonesia.