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ajor banks will likely maintain their interest rates, at least within the medium-term, despite the central bank’s decision to raise the benchmark interest rate by a quarter percentage point last week.

Several lenders among the nation’s top 10 banks, including Bank Central Asia (BCA), Bank Mandiri, CIMB Niaga and Bank Tabungan Negara (BTN), said the 25 basis points (bps) hike should not affect their lending rates in the near-term as sources for capital remained strong due to adequate third-party funds.

According to Bank Indonesia (BI) data, as of November 2010 the four banks account for nearly 30 percent of the country’s overall credit.

“Despite a hike in the BI rate ... we will not raise our lending rates just yet,” Bank Mandiri chief financial officer Pahala Mansury told The Jakarta Post on Sunday. Mandiri is the nation’s second largest bank by lending, with total loans accounting for 12.34 percent of overall loans disbursed as of November 2010.

The BI rate, used as a reference for banks to determine their deposit and lending rates, was raised by 25 bps to 6.75 percent on Friday after keeping the rate at a record low of 6.5 percent since August 2009.

Vice president director Jahja Setiaatmadja of BCA, the third largest bank by lending and widely acclaimed for its high amount of consumer loans, said the 25 bps hike would not be significant for the lender’s cost of funds

“Only if the [BI rate] was hiked by 100 basis points, or if our third party funds slid significantly, will we review our rates,” he told the Post.

CIMB Niaga, the nation’s fifth largest lender, will likely maintain its lending rates but will still review the development of its business over the week following the BI rate hike, CIMB vice president director Catherine Hadiman said.

“We will watch the development within the following week. If there’s no impact on deposits, lending rates will remain steady,” she said in a text message. Bank Tabungan Negara, a state-owned bank focused on housing loans, saw no need to be unnecessarily reactive following the benchmark rate hike, unless BI continued to hike the key rate in the near-term, president director Iqbal Latanro said.

With similar signals voiced by other major banks, all of the top 10 lenders, which account for almost 64 percent of the country’s overall loans, are expected to keep their lending rates steady where they currently stand.

Coordinating Minister for the Economy Hatta Rajasa has urged banks to maintain their lending rates despite the rise in the central bank’s reference rate. The minister said that it was not necessary for banks to raise their lending rates because their average net interest margin (NIM) was still “too high”. NIM is a measure of the difference between interest income and the amount of interest paid out to borrowers.

“Their interest rate spread is still high, so there’s no need for them to follow BI’s rate increase,” he told reporters on Friday, adding that ideally, NIM should be lower than 4 percent.

The nation’s average NIM for commercial banks stood at 5.76 as of November 2010, and 6.09 percent for state-owned banks. Financial analysts have said local banks’ NIM, now among the highest in Southeast Asia, should ideally be below 5 percent.

Bank Danamon research director Anton Gunawan also said that the BI rate hike was a signal to the markets that the central bank was not “behind the curve” over the recent inflationary pressures caused by volatile food prices that could not be calmed by raising rates.

Therefore, the rate hike should not impact lending rates “given the loose connection between the policy rate and bank lending rates,” he said.

The central bank had kept its benchmark rate at record low of 6.5 percent to help spur economic growth since August, 2009, before the 25 bps increase on Friday.