T

hree state-owned lenders, Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI), signed an agreement with the Culture and Education Ministry on Wednesday stipulating that the lenders would manage allowances for teachers nationwide.

The agreement was part of the banks'€™ efforts to raise more low-cost funds from their transactional services and banking products.

Sumarna Surapranata, director general of teachers and educators at the ministry, said the government had allocated Rp 80 trillion (US$5.47 billion) in next year'€™s state budget to be distributed to teachers nationwide as a professional allowance.

Sumarna said the three state lenders would manage 90 percent of the total amount, while the remainder would be handled by regionally owned lenders (BPD) across the country.

According to Sumarna, each teacher would receive a so-called '€œprofessional allowance'€, whose amount would be equal to their monthly salary.

'€œThe agreement is a continuation of our existing partnership with the three state banks to manage allowances for teachers.

This service is actually beneficial for both state banks and the country as government funds can be managed and monitored more closely,'€ Sumarna said in his speech during the event.

Sumarna said the ministry also expected that state lenders would offer various non-cash incentives for teachers such as co-branding debit cards and other promotions.

Adi '€œSusi'€ Sulistyowati, head of channel management division at BNI, said the bank had managed an average Rp 15 trillion in state
allowances for teachers annually and expected that it could raise more from the fund budgeted for next year.

Susi said the service was part of its cash management strategy to boost the portion of low-cost funds from current accounts and savings accounts (CASA), which make up 63.2 percent of its total third-party funding (DPK) as of June.

'€œIn the long run, we hope to increase our CASA portion to 70 percent. This year, we expect to book 12 percent growth of third-party funding,'€ Susi said.

According to Susi, the bank had the potential to grow its products and services in cash management and other businesses for teachers and educators as part of its existing infrastructure, such as personal loans, mortgages and savings.

At the same event, Mohammad Irfan, director for state-owned enterprise and institutional business at BRI, said the lender expected that the agreement could attract teachers and ministry officials to increase their usage of the bank'€™s e-channel services across the country.

'€œBRI has built a strong partnership with the ministry as we routinely disburse state allowances to more than 1 million teachers, subsidy programs to 18 million students and state social aid for schools nationwide,'€ Irfan said.

Bank Mandiri corporate banking director Royke Tumilaar said the lender also expected to manage more state funds. The bank currently manages Rp 2.3 trillion annually.