ID :
137653
Sat, 08/14/2010 - 19:18
Auther :
Shortlink :
https://oananews.org//node/137653
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NEW BI POLICY TO ENCOURAGE MORE CREDITS TO PRODUCTIVE SECTORS
Jakarta, August 14 (ANTARA) - Bank Indonesia (BI) hopes its new policy of connecting the loan-to-deposit ratio to reserve requirements will encourage banks to extend more credits to productive sectors.
BI Deputy Governor Halim Alamsyah told ANTARA here on Saturday he was optimistic the policy would not only increase credits but also create new credits for productive sectors such as for working capital and investment.
"If banks extend too much credit for consumptive purposes,they could from a managerial point of view, create new risks, namely credit concentration," he said.
He said good credit management would encourage banks to formulate a balanced credit expansion strategy.
"BI will certainly monitor the risks including the credit concentration risk," he said.
Halim also said through micro- and macro-economic approaches and supervision from BI it was hoped expansion of credits would enter productive sectors.
He said the regulation of the policy would soon be issued. "The BI regulation is not yet finished as it still has yet to be taken to the board of directors' meeting once more. It will be effective six months later after the Bank Indonesia Regulation (PBI) is issued," he said.
According to some sources Bank Indonesia with the new policy would require banks to have a 78 to 102 percent loan-to-deposit ratio (LDR).
If a bank's LDR is below 78 percent or above 102 percent BI will give a penalty on its reserve requirement.
A bank however may still be allowed to have a LDR above 102 percent so long as its capital adequacy ratio is minimally 17 percent.
A source in BI said the new regulation in principle reminds banks of their intermediary role, namely distributing the funds they have collected by extending credits.
To make the banks' role effective for economic growth the government must improve that infrastructural or supporting means that have so far hindered industrial development.
BI Deputy Governor Halim Alamsyah told ANTARA here on Saturday he was optimistic the policy would not only increase credits but also create new credits for productive sectors such as for working capital and investment.
"If banks extend too much credit for consumptive purposes,they could from a managerial point of view, create new risks, namely credit concentration," he said.
He said good credit management would encourage banks to formulate a balanced credit expansion strategy.
"BI will certainly monitor the risks including the credit concentration risk," he said.
Halim also said through micro- and macro-economic approaches and supervision from BI it was hoped expansion of credits would enter productive sectors.
He said the regulation of the policy would soon be issued. "The BI regulation is not yet finished as it still has yet to be taken to the board of directors' meeting once more. It will be effective six months later after the Bank Indonesia Regulation (PBI) is issued," he said.
According to some sources Bank Indonesia with the new policy would require banks to have a 78 to 102 percent loan-to-deposit ratio (LDR).
If a bank's LDR is below 78 percent or above 102 percent BI will give a penalty on its reserve requirement.
A bank however may still be allowed to have a LDR above 102 percent so long as its capital adequacy ratio is minimally 17 percent.
A source in BI said the new regulation in principle reminds banks of their intermediary role, namely distributing the funds they have collected by extending credits.
To make the banks' role effective for economic growth the government must improve that infrastructural or supporting means that have so far hindered industrial development.
