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Jakarta Post

BI to cap interest rates on credit cards to boost consumption

Ayomi Amindoni (The Jakarta Post)
Jakarta
Mon, September 26, 2016

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BI to cap interest rates on credit cards to boost consumption Newly-printed credit cards are exhibited at the offices of Bank Mandiri at Plaza Mandiri, Jakarta, on Jan. 4. (ANTARA FOTO/Puspa Perwitasari)

B

ank Indonesia (BI) plans to cap the maximum limit on interest rates on credit cards to 2.24 percent per month from the prevailing limit of 2.95 percent. BI wants to do this to encourage the use of non-cash transactions.

"To encourage consumption, BI will cap the maximum interest rate on credit cards to around 2.2 percent per month, or 26.95 percent per year," BI Deputy Governor Ronald Waas said in Semarang, Central Java, on Saturday.

Currently, the central bank is drafting a regulation to enforce the cap, following approval from the board of governors on the issue. "We hope to issue it this year,” Roland said.

The latest cut to the maximum limit was concluded in 2012, setting the cap at 2.95 percent per month, or 35.4 percent per year.

BI has been campaigning for a less cash-bound society since August 2014.  

The number of credit cards in Indonesia continues to grow, reaching 16 million in 2015. In terms of volume, the country saw 857,000 daily transactions in July 2016. (ags)

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