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tate-owned lender Bank Tabungan Negara (BTN) expects that one of its major savings products will help boost its low-cost fund portion as part of efforts to decrease high lending rates, its executive said.

BTN retail funding division head Nasril said the bank'€™s low-cost fund, which comprises current and savings accounts (CASA), accounted for 47 percent as of June and was expected to rise to at least 51 percent by the end of the year.

'€œOur low-cost fund portion keeps growing. It was at 45 percent earlier this year and around 30 percent in previous years. This is an effort to help our lending rate decrease as our lending rate in mortgages is still seen as high,'€ Nasril told reporters on Thursday.

A larger portion of low-cost fund in a bank'€™s third party funding (DPK) means the lender has wider space to reduce its cost of funds as it pays depositors with lower deposit rates, which in turn will help decrease its lending rate.

As part of the strategy, Nasril said BTN was planning to improve one of its saving products, e'€™Batara Pos, a collaboration between the bank and state postal company PT Pos Indonesia since 2005.

Through the product, Nasril said the lender deployed tellers, customer service counters and ATMs at 3,000 post offices across Indonesia to carry out deposit and withdrawal transactions based on a real-time online system.

One of the improvements was to approach global payment company Western Union, which also operates in post offices across Indonesia, by automatically linking the remittance received by the company with e'€™Batara Pos accounts, Nasril said.

According to Nasril, such a partnership with Western Union will be strategic in improving the growth of e'€™Batara Pos as millions of Indonesia'€™s migrant workers overseas transfer their money through Western Union.

'€œAnnually, our migrant workers'€™ remittance through Western Union reaches around Rp 13 trillion [US$923.7 million] to Rp 14 trillion. We could book around Rp 2.5 trillion to Rp 3 trillion per year if we can reach a potential of 20 percent from the company'€™s annual remittance,'€ Nasril said.

Another strategy to boost the product was to offer lottery prizes and increase promotions in various regions, which had begun recently and would be drawn in February 2016, Nasril said.

Nasril added that the bank also attracted prospective and existing customers through the exemption of administration fees for a minimum balance of Rp 1 million per account.

Based on the strategy, BTN business director Sis Apik Wijayanto said the bank expected to book at least 500,000 new e'€™Batara Pos accounts to reach a total 1.6 million by the end of this year.