BI YET TO RAISE BANKS' CAR TO 12 PCT

Jakarta, Oct 15 (ANTARA) - Bank Indonesia (BI) Deputy Governor Muliaman D Hadad said that the Indonesian central bank had yet to raise banks' capital adequacy ratio (CAR) requirement form eight to 12 percent.

"There is no indication yet that BI will raise the CAR requirement from eight percent to 12 percent," he said on the sidelines of a workshop on national banks here on Thursday.

According to Muliaman, the 8 percent CAR is actually only more than enough and if banks are willing to develop or willing to take the opportunity to develop, they have to raise their capital.

The BI deputy governor did not question how much nominal capital a bank has but how far it could improve the quality of its capital.

Muliaman reaffirmed that banks were actually left to decide their own choice whether they wanted to develop or not.

"If they want to develop, they had better raise their capital," he added.

In the meantime, Acting BI Governor Darmin Nasution said the level of the Indonesian public's propensity to save money was still low compared with people in countries with about the same per capita income.

"Today, talking about saving it should be spoken 40 years ago, but structurally the level of our people's propensity to save is still low compared with other countries with the same per capita income," Darmin said at the launching of a banking product dubbed "Tabunganku (My Saving)" here on Wednesday.

Darmin even predicted that the country's public awareness level of saving is lower than Vietnam.
"Maybe we rank lower than Vietnam. Mr Halim Alamsyah (head of BI's directorate of banking research) can find this data," he said.

Darmin said further that a solution should be sought in order to increase the public's awareness about the need to save. One solution was issuing a saving product free of administration fees.