Countercyclical Policy Research Articles

COVID-19 and South Asia: an overview

The article explores the global impact of the COVID-19 pandemic, highlighting its severe effects on health systems, economies, and poverty levels. With an estimated 6.9 million deaths worldwide and the deepest recession since World War II, the pandemic had diverse regional impacts. South Asia, for example, experienced varying degrees of health and economic challenges; India faced over 500,000 deaths and a sharp economic downturn, while other nations in the region were less severely affected. The pandemic’s relatively brief duration, aided by global responses like lockdowns, social distancing, and rapid vaccine distribution, facilitated a quicker economic recovery, bolstered by unprecedented counter-cyclical policies. The article also examines South Asian case studies, including regional trade integration, the economic benefits of vaccination, and the socio-economic impacts on women in Bangladesh. It further discusses Pakistan’s response, Sri Lanka’s populist policies, and Indonesia’s monetary policy adjustments, offering valuable lessons for managing global health crises and economic downturns.

Sovereign Credit Rating: Impact on Social Investment and Role in Financial Subordination

This article examines sovereign credit rating methodologies and their impact on fiscal space in developing economies. While sovereign ratings are meant to reflect default risk, the biases embedded in the rating methodologies result in overly punitive rating actions in developing economies that often limit their ability to implement countercyclical policies. In addition, with a singular focus on austerity, they tend to shift focus away from critical development priorities and social welfare spending. Using panel data of credit rating changes in 133 countries over the period 2000–2020 from Moody’s, we explored the long-term trends in the impact of ratings. Negative rating actions have been intensifying in developing economies since 2010. We found that rating changes did tend to influence fiscal priorities. Downgrades lowered the proportion of spending on health and education and increased the proportion of spending on interest payments. We situate this examination of credit ratings within the framework of the financial subordination literature. We suggest that credit ratings are a new manifestation of financial subordination and have created a new dimension in reproducing and deepening the inequalities in the global financial system. JEL Classification: B5, F34, F02

Impact of IFRS 9 Implementation and Audit Committee Effectiveness on Earnings Management in The Indonesian Banking Sector

Background- The implementation of IFRS 9, utilizing the Expected Credit Loss (ECL) method, along with effective oversight from the audit committee, can be a relevant strategy to anticipate earnings management practices. Purpose- to examine the impact of IFRS 9 implementation and audit committee supervision on restricting managerial discretion in loan loss provisions. Design/methodology/approach- This study will use a quantitative analysis method using secondary data from an annual report. The sampling method used in this study was purposive sampling, which resulted in selecting 42 banks listed on the Indonesian Stock Exchange from 2017 to 2022. This study uses the data panel analysis method with the STATA analysis tool. Findings- This research found that the implementation of IFRS 9 and audit committees had an impact on increasing bank managerial discretion. This explains that the implementation of IFRS 9 and the audit committee have not been able to limit managerial discretion, which may be due to the influence of unstable economic conditions due to the pandemic and countercyclical policy to anticipate the impact of the pandemic. Research limitation- The potential impact of the COVID-19 pandemic on research outcomes related to managerial discretion and the effectiveness of audit committee oversight. Originality/Value- To enhance the literature related to the trends of the impact of PSAK implementation in Indonesia on earnings management more comprehensively by extending the research period and contributing to the literature by employing multiple criteria to identify the quality of oversight provided by the audit committee.

Evaluation of alternative farm safety net program combination strategies

PurposeSeveral farm safety net strategies are available to farmers as a source of financial protection against losses due to price instability, government policies, weather fluctuations and global market changes. Producers can employ these strategies combining crop insurance policies with countercyclical policies for several crops and production areas; however, less is known about the efficiency of these strategies in enhancing profit and reducing its variability. In this study, we examine the efficiency of these strategies at minimizing inter crop year farm profit variability.Design/methodology/approachWe utilized relative mean of profit and coefficient of variation, to compare counterfactually calculated farm safety net strategies for a sample of 28,615 observations across 2,486 farms and four dryland crops (corn, soybean, sorghum and wheat) in Kansas spanning nine crop years (2014–2022). A no farm safety net strategy is used as the benchmark for every alternative strategy to ascertain whether a policy customization is statistically different from a no farm safety case.FindingsThe general pattern of the results suggests that program combination strategies that have a high-profit enhancement potential necessarily have low profit risk for dryland wheat and sorghum production. On the contrary, such a connection is absent for dryland corn and soybeans production. Low-cost farm safety net strategies that enhance corn and soybeans profits do not necessarily lower profit risks.Originality/valueThis paper is one of the first to use a large sample of actual farm-level observations to evaluate how combinations of safety net programs offered under the Title I (PLC, ARCCO and ARCIC) and XI (FCIP) of the U.S. Farm Bill rank in terms of profit level enhancement and profit risk reduction.

The Implications of the Countercyclical COVID-19 Policy on the Performance of Rural Banks and Sharia Rural Banks in Indonesia

This study investigated the impact of the Indonesian government policies implemented through POJK No. 11/POJK.03/2020 on the banking performance of Rural Bank (BPR) and Sharia Rural Bank (BPRS) after the implementation of countercyclical policies to stimulate the country's economy affected by the COVID-19 pandemic in Indonesia between March and December 2020. Mixed method approaches were applied to analyze the contributing factors to different performances between seven Rural Banks and seven Sharia Rural Banks in West Sumatra that were randomly selected through purposive sampling based on proportionate assets. The quantitative data were financial statements sourced from the OJK 2021 Publications, and the qualitative data were collected from in-depth interviews with eight Directors of Rural Banks and Sharia Rural Banks selected from the snowball sampling. Analyzing Indonesian government policies embodied in the countercyclical policy, we found that banking policies in Sharia Rural Banks outperformed those of conventional Rural Banks, as reflected by the average ROA (1.16% vs 1.33%), ROE (0.09% vs. 0.08%), and NPL (6.67% vs. 6.82%). The contributing factor to this gap was the different internal policies of each institution to translate the countercyclical concept based on the operational principles, such as the interest rate of Rural Bank and margin of Sharia Rural Bank despite the fact that both banks shared practice in the principal deferment and credit extension.

Sustaining Prosperity: Exploring Fiscal and Financial Sustainability in the Context of Dynamic Fiscal Policy

Purpose: This study explores how fiscal policy and financial sustainability support sustainable economic prosperity amid global instability. It examines the impact of government taxation and spending decisions on economic outcomes, aggregate demand, employment, inflation, social welfare, infrastructure development, and income inequality. Financial sustainability is analyzed through prudent fiscal management and debt sustainability, focusing on long-term government finance viability and mitigating fiscal risks. Research Design and Methodology: The study employs a qualitative methodology, incorporating a comprehensive literature review of theoretical works, empirical studies, and policy analyses. Data is collected through systematic reviews of scholarly articles, books, policy reports, and official publications. Thematic analysis techniques, including coding and categorization, synthesize findings, with reflexivity to consider assumptions and biases. Findings and Discussion: The research underscores the importance of flexibility and adaptability in fiscal policy, highlighting automatic stabilizers and countercyclical policies for economic stabilization and sustainable growth. Prudent debt management, including debt restructuring and fiscal consolidation, is vital for mitigating fiscal risks and ensuring debt sustainability. The findings emphasize integrating fiscal sustainability with broader economic and social goals and the need for institutional reforms and international cooperation to enhance fiscal governance. Implications: The study provides insights for policymakers on the importance of fiscal prudence and sustainability. It advocates for a balanced approach that addresses short-term stabilization and long-term goals and calls for institutional reforms to improve fiscal discipline, transparency, and accountability. By integrating interdisciplinary perspectives, policymakers can develop resilient and sustainable fiscal policies that promote long-term prosperity and social equity.

THE SMALL CLAIM COURTS DURING COVID-19: ANALYSIS OF INDONESIAN BANKS’ CLAIMS ON BAD CREDIT

The purpose of this study is to discuss the suitability of small claim courts to solve bad credit claims that are filed by banks as an alternative to dispute contract defaults. The study analyses the trend of banks’ small claims during the COVID-19 pandemic. This study employed an empirical normative approach. It combines a normative legal approach and additional empirical elements in the form of cases and decisions. The results show that some of the regulations that were released before the pandemic, such as the Regulation of the Supreme Court Number 4 of 2019 on the Settlement of Small Claim Courts, provide benefits for banks to settle credit disputes because they allow various expansions. The Regulation of the Supreme Court Number 3 of 2018 on The Administration of Cases in Electronic Courts has introduced some electronic applications. Although business (bank) litigation remains dominant, the trend of bank claims in the middle of the COVID-19 pandemic has dropped. In contrast, the trend of individual claims has increased significantly. The decline is influenced by countercyclical policies that are issued by the Financial System Stability Committee. The committee members consist of representatives of the Ministry of Finance, Bank Indonesia, the Financial Services Authority, and the Deposit Insurance Corporation. It aims to handle and cope with the banks’ crisis related to the pandemic.

Asset bubbles, financial crisis and countercyclical policies

In this manuscript, we examine the causes of asset price bubbles and financial crises as well as the current challenges facing the regulatory framework of the financial system. We argue that the current model of regulations cannot stop the inevitability of either asset bubbles or financial crises in the future. In a causal relationship, the current system of regulations tends to deal withthe effects of liquidity shortage during recessions rather than with the causes, which can be referred to as distorted financial intermediation. In fact, regulations seek to cure symptoms rather than disease. The rules function like antibiotics,against which infection may develop immunity. We propose a modification of the current regulatory system and believe that this model should be taken into account when developing an effective regulatory framework for the financial system.

The Consequences of Tax Changes: The Evidence on Tax Multiplier in Russia

The information about tax changes’ effects on aggregate output is highly important for economic policy, especially in times of economic contractions. Russian economy underwent the series of tax changes during 2003–2020. For better tax policy design, it is necessary to understand and to evaluate the effects of this changes on aggregate output, which is the purpose of this study. To solve the problem of endogeneity we use two methods– “narrative approach” and “classical” approach. The first one uses data on exogenous, not driven by economic conditions, tax changes from official documents and forecasts. The second one uses cyclical component of the aggregate tax receipts as tax shocks indicator. Using both methods we estimated a VAR model of Russian economy for period 2003–2020. The implementation of “narrative approach” did not provide any significant effect possibly due to vulnerability towards the measurement error. Based on the classic approach we found that tax changes affect output with a 1-year lag and a 1 percentage point shock of aggregate tax receipts to GDP ratio lowers output growth by 0.7–0.88 percentage points. This result is robust to inclusion of additional factors in the model. The results are mostly consistent with existing research. Implementation of “narrative approach” proved to be restricted in Russia. “Classical” approach allows to conclude that tax changes could serve as an appropriate tool of countercyclical policy in Russia. On the other hand, increasing tax burden in times of downturn could be highly harmful for recovery. These results should be interpreted taken into consideration the limitations of the VAR method used.

Perlindungan Hukum Debitur Perbangkan Akibat Wanprestasi Perjanjian Kredit Masa Pandemi

This study is to determine what kind of efforts are obtained legally against bank customers in bad credit problems during the pandemic and whether execution is a final solution in a bad credit problem, using normative legal research methods, it was concluded that the protection of debtors who have access to credit facilities during the Covid-19 pandemic includes; First, the government issued a policy in the form of Presidential Regulation No. 12 of 2020, which concerns the determination of Corona virus disease in natural disasters nationally in 2019. The spread of natural disasters (Covid-19). Regulation of the Financial Services Authority of the Republic of Indonesia Number 11/POJK.03/2020, . regarding the impact of the national economic stimulus counter cyclical policy on the spread of the corona virus disease in 2019, by itself Law No. 8 of 1999 Consumer legal protection, including debtors, is guaranteed according to the provisions. 2. The bank's actions in assisting the settlement of bad loans during the Covid-19 pandemic have several stages, so legal protection to debtors applies, so banks do not necessarily execute debtors' collateral or guarantees. However, banks provide settlement solutions to bad debtors so that the ability to pay the stuck debtors will slowly return to normal during this pandemic, so that the bad collectibility can become smooth, namely through the Restructuring process.

The inflation targeting regime in Ukraine and Czech Republic: a comparative analysis

The main purpose of this article is to determine the impact of the inflation targeting re-gime on the inflation rates in Ukraine and the Czech Republic, to identify the advantages and disadvantages of its use, to study the evolution and dynamics of inflationary processes in Ukraine and the Czech Republic, as well as the nature and causes of inflation in Ukraine and the Czech Republic. A separate goal is to analyze the conditions and features of the Czech Re-public's experience with the introduction of inflation targeting and the formation of recommen-dations of successful measures to achieve inflation goals for Ukraine. In the paper, the authors examined the practice of applying the inflation targeting regime in Ukraine and the Czech Re-public in order to identify the positive and negative consequences of the implementation of this monetary policy regime. A review of publications has shown varying attitudes towards the in-flation targeting regime. The paper describes the chronology of inflationary processes in the re-searched countries, the dynamics of the consumer price index, the socio-economic consequences and causes of inflation. Attention is focused on the need for state regulation of inflationary pro-cesses. The effectiveness of the anti-inflationary policy was determined. In line with the findings of the study, the prospects for the implementation of an effective monetary anti-inflationary policy aimed at effective regulation of inflationary processes are outlined. The authors conclude that the study of the National Bank of Ukraine's (NBU) monetary policy is important because it affects inflation, the exchange rate, and economic growth. Economic agents always adjust fi-nancial risks, keeping in mind that historically inflation has been one of the most acute prob-lems for Ukraine , which has an uneven constant development. This study is aimed at determin-ing the nature and causes of modern inflation in Ukraine and in Czech Republic and the possi-bility of its regulation by monetary methods. Differences in the dynamics of inflation processes in the presented countries indicate that inflation in each country has specific features related to pricing, purchasing power, money circulation, anti-inflationary and countercyclical policies. However, unevenness and cyclical development of inflation is typical for the studied countries. The results of this study are of interest to the Ministry of Economy of Ukraine, the National Bank of Ukraine, as well as the Committee on Ukraine's Integration into the European Union, whereas the processes of European integration contribute to reducing inflation in the future. The authors conclude that in the process of creating effective economic policy, it is necessary to use the experience of other countries that have achieved stable, multi-year success in this pro-cess. This study highlights the discussion about inflation targeting experience in the transition economies of Ukraine and Czech Republic. The authors emphasize that circumstances that led to the transition from exchange rate pegging to inflation targeting have made significant pro-gress in reducing inflation. The authors discovered that the focus of inflation-targeting by cen-tral banks should be on the medium-term horizon in order to ensure inflation reduction as well as inflation level appropriate for price stability.

An Alternative Approach to Assess the Impacts of Countercyclical Fiscal Policy in Developing Countries

In the current literature, theoretical, and empirical studies present varying implications regarding the effectiveness of countercyclical fiscal policy in stabilizing the economy. While most studies suggest that countercyclical fiscal policy stimulates or inhibits economic growth, others document insignificant impact. However, these existing studies solely analyze the impulse of fiscal policy to the economy without distinguishing whether the impulse factor originates from within or outside the economy. Therefore, we aim to explore the effectiveness of countercyclical fiscal policy within an alternative framework that discerns the origin of the impulse factor and revisits the impacts of countercyclical policy in developing countries. Our theoretical framework argues that the countercyclical fiscal policy only makes sense if it is conducted with external debt or other external instruments. Employing the dataset that covers 201 countries over the 1990-2020 periods, we document evidence for the use of countercyclical fiscal policy in developing countries.

Give me a U, give me a V, give me an L!: How effective are countercyclical policies in shaping the output dynamic during recessions

AbstractIn this paper, we argue that studying recession events through the shapes observed in sequences of GDP data can help to avoid methodological complications and offer new insights to traditional inquiries. With a set of 147 recession events from 77 countries, we analyze whether the shape of the output dynamic might be affected by the application of countercyclical policies. Firstly, we apply a machine learning technique to discover and cluster the shapes (or ‘shapelets’) that prevail in empirical spells. Secondly, we use a multinomial model to study fiscal and monetary interventions, in which we specify the categorical variable with a set of statistically different shapelets. Not only do we find strong empirical evidence that it is possible to overcome a recession through countercyclical policies, but also that there are non‐linear effects that make it more likely when the strength of these policies crosses certain thresholds.

Public-private partnerships: pro-cyclical or counter-cyclical? an empirical study

The use of public works programs to combat economic recessions is a recurring issue. In this paper we conducted an empirical analysis covering 160 countries (out of which 43 were retained) over 30 years, to determine to what extent it has been possible in the past to deploy PPPs as part of a wider countercyclical policy. The main criterion used in the analyses performed is the comparison between numbers and values of PPP projects reaching financial close during recessions and those outside a recession. The results are disappointing: only a handful of European countries have been successful. The only sensible approach, that works only in some developed nations, would be increasing the number of PPP projects while maintaining project size. This research contributes to the understanding of PPP adoption during economic recessions, sheds light on the different strategies of developed and developing countries, and emphasizes the challenges and opportunities associated with implementing countercyclical PPP policies. These insights can inform policymakers, practitioners, and researchers in their decision-making processes and contribute to the advancement of knowledge in the field of PPP project procurement and management.

Procyclicality of fiscal policy in oil-rich countries: Roles of resource funds and institutional quality

Fiscal policy management in natural resource-rich countries, particularly the ones struggling with inadequate institutional quality, faces significant challenges because of the dependence of government expenditures on highly volatile revenues of their natural resources. To resolve this issue, most of them have set up natural resource funds; however, the effectiveness of these funds is under debate. Large government expenditures financed by transfers from these funds are not highly likely sustainable and may entail long-term severe economic risks. That brings the necessity of detailed analyses of resource-rich countries' fiscal policy management by integrating the effects of the natural resource funds. This study puts a step forward in this direction; it takes 32 oil-rich countries for the period 1984–2015. Then it analyzes their fiscal policies regarding their government expenditures by unravelling the effects of the presence of the natural resource funds and the adequacy levels of their institutional qualities, categorized with the clustering algorithms. It uses dynamic panel data analysis and elaborates on the proper estimation techniques by considering cross-sectional dependence among data of these countries, heterogeneity of slope coefficients and endogeneity issues. The study reveals that even after controlling the effects of the volatility of the oil price changes and the share of oil rents in total income, resource-rich countries' fiscal policy goes with the flow. In favourable economic conditions, government expenditures are soaring, but when economic downturns happen, their growth levels also turn down. That means high fiscal procyclicality even in the presence of natural resource funds. As expected, the presence of these funds is not sufficient. For the desired countercyclical policy, adequately high enough institutional quality is needed to manage those funds and fiscal policy effectively.

Analisis Pengaruh Implementasi POJK No. 11/POJK.03/2020 Sebagai Kebijakan Countercyclical Dampak Penyebaran Covid-2019 Terhadap ROA dan NPF Pada Bank Pembiayaan Rakyat Syariah

The impact of the COVID-19 pandemic on declining people's income and Indonesia's economic growth has made the Financial Services Authority (OJK) issue POJK No. 11/POJK.03/2020 concerning National Economic Stimulus as a countercyclical policy on the Impact of the Spread of Coronavirus Disease 2019 as an anticipatory effort in dealing with the COVID-19 pandemic, as well as encouraging the optimization of banking operational activities amid the COVID-19 pandemic. This study aims to determine the effect of the implementation of POJK No. 11/POJK.03/2020 as a countercyclical policy on the impact of the spread of coronavirus disease 2019 on Return on Assets (ROA) and Non Performing Financing (NPF) on BPRS Mitra Agro Usaha. This type of research is quantitative research. The data sources in this study are primary data and secondary data. The research data was taken from January 2019-March 2021. The data analysis technique uses a normality test, homogeneity test, dummy variable simple regression test, partial test (t test), correlation coefficient (r), coefficient of determination (r2), and independent sample t-test. The results of this study state that POJK No. 11/POJK.03/2020 as a countercyclical policy on the impact of the spread of coronavirus disease 2019 does not have a significant effect on Return on Assets (ROA) on BPRS Mitra Agro Usaha and POJK No. 11/POJK.03/2020 as a countercyclical policy impacting the spread of coronavirus disease 2019 has a positive effect and significant on Non Performing Financing (NPF) on BPRS Mitra Agro Usaha.

APPLICATION OF FORCE MAJEURE CLAUSES IN AGREEMENTS BUSINESS RENTAL DURING THE COVID-19 PANDEMIC

The development of the COVID-19 pandemic has disrupted various aspects of life, one of which is in terms of agreements where there is a breach of contract because one party cannot fulfill its achievements due to the COVID-19 force majeure. The formulation of the problem in this research is how to apply the COVID-19 force majeure clause in leasing contracts during the pandemic and what the settlement policy is for leasing contracts that occur during the COVID-19 pandemic. This research aims to find out how the force majeure clause is applied in leasing agreements during the COVID-19 pandemic and how to resolve it. This research uses an empirical juridical research method, namely a method used to obtain primary data and find the truth based on facts in the field through interviews with related parties. The results of this research explain that the leasing institution PT. FIF Group Astra Palu City and Sinarmas Multifinance Palu City have not implemented a force majeure clause in the contract with the lessee. The two leading institutions have formed various policies to overcome defaults during the COVID-19 pandemic by referring to the Regulation of the Financial Services Authority of the Republic of Indonesia Number 14/POJK.05/2020 concerning Countercyclical Policies on the Impact of the Spread of Coronavirus Disease 2019 for Non-Bank Financial Services Institutions and continue to pay attention to the precautionary principle that does not harm the lessee or the lessor. This research provides suggestions for leasing institutions to include standard clauses regarding COVID-19 force majeure in written contracts with lessees, and for lessees to be more cooperative in responding to policies issued by leasing institutions.

COVID-19, stability and regulation: evidence from Indonesian banks

PurposeThis study aims to investigate the effect of credit relaxation policy during the COVID-19 pandemic and its efficacy as a countercyclical policy on bank risk and stability.Design/methodology/approachUsing a sample of 39 listed Indonesian banks, the authors investigate the effect of credit relaxation policy on banks’ risk and stability. Data were retrieved from Eikon DataStream from monthly financial statements from June 2019 to December 2020. The authors use panel data analysis with a fixed-effect estimator to estimate the model.FindingsThe authors find that the credit relaxation policy affects banks’ stability. The authors also find no significant relationship between the policy and bank risk measured by non-performing loans. The authors also find that the policy mainly affects small banks and both state-owned and private banks.Originality/valueThis research has some policy implications that issuing prompt regulations to respond to urgent situations is needed and is very important to face crisis conditions and reduce the negative impact of such crises.

THE IMPACT OF THE COVID-19 PANDEMIC ON THE FULFILLMENT OF CREDIT WITH MORTGAGE RIGHTS IN LEGAL TERMS FOR THE DEBTOR

The Covid-19 has an impact that affects many sectors, including the implementation of credit agreements that are subject to dependent rights. These effects led the debtor to experience overmacht and force majeure, so it is difficult to fulfill the obligations from the contract because income during the CoAvid-19 pandemic was unstable. The approach used in this study is normative juridical. The results showed that the situation of the Covid-19 pandemic can be used as a basis for overmacht because it has fulfilled the elements of overmacht. Thus, the execution of the debtor's liability rights object is not possible, which is hindered by the fulfillment of its credit obligations. Issuance of POJK Number 11/POJK.03/2020 on National Economic Stimulus as a Countercyclical Policy on the Impact of Coronavirus Disease 2019 as a policy that provides legal protection for overmacht debtors affected by Covid-19 by providing credit restructuring.

IMPLEMENTATION OF BANKING CREDIT AGREEMENTS RESTRUCTURING DURING THE COVID-19 PANDEMI AT BPR ARTHA MUKTI SANTOSA

Apart from having a significant impact on the economic and financial sectors, the presence of Covid-19 has had a negative impact on all aspects of state administration. During the Covid-19 era, when non-performing loan cases have skyrocketed, the banking sector plays an important role, not only as a provider of capital but also because it is important to enable and handle the growth of customer-run companies so that companies can develop while minimizing the danger of bankruptcy, both for customers as a debtor or for a bank as a creditor. Debtors who have difficulty fulfilling their commitments to the Bank due to the spread of Covid-19 are given special treatment based on POJK Number 11/POJK.03/2020, which discussesNational Economic Stimulus as a Countercyclical Policy. During the Covid-19 pandemic. The problem raised by the author is how to apply the restructuring of banking banking agreements during the Covid -19 pandemic at BPR Artha Mukti Santosa and what are the obstacles to implementing banking banking agreement restructuring during the Covid -19 pandemic at BPR Artha Mukti Santosa. The method used by the author is normative juridical by using secondary data such as literacy tests and in-depth interviews with employees at BPR Artha Mukti Santosa to draw conclusions about the law and its application to real world situations. Based on the results of research and discussion that the implementation of restructuring at BPR Artha Mukti Santosa was carried out incorrectly to prospective debtors with strict procedures referring to POJK provisions Number 18/POJK.03.2021 Jo POJK 17/POJK.03/2021 Jo POJK 34 /POJK.03/2021 Regarding the Second Amendment to the Financial Services Authority Regulation Number 34/POJK.03/2020 Concerning Policies for Rural Credit Banks and Sharia Rural Banks As a Impact of the Spread of Coronavirus Disease 2019 such as conducting surveys on debtor business health, debtor eligibility, and good faith of the debtor. Obstacles in implementing Restructuring at BPR Artha Mukti Santosa BPR are such as uncooperative debtors in following the rules, lack of cooperation and bad faith from debtors. 
 
 Keywords: Restructuring, Credit, BPR Artha Mukti Santosa