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View all search resultsBank execs ‘overwhelmed’ with $12b state cash injection
State-owned lenders have received 200 trillion rupiah ($12.2 billion) in government deposits redirected from Bank Indonesia to spur credit growth, but their top executives are unsure how to deploy the funds.
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Growth center: Office towers housing banks and corporations stand tall on Dec. 12, 2023, at the Sudirman Central Business District in Jakarta. (AFP/Yasuyoshi Chiba )
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tate-owned lenders have received 200 trillion rupiah ($12.2 billion) in government deposits redirected from Bank Indonesia to spur credit growth, but their top executives are unsure how to deploy the funds, Finance Minister Purbaya Yudhi Sadewa said on Monday.
The funds have been placed in time deposits on Friday at Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Tabungan Negara and Bank Syariah Indonesia, and the five bank are now expected to accelerate loan disbursement to reinvigorate private sector activity and boost economic growth.
“Now, they are overwhelmed. If you ask for more, they’ll get even more overwhelmed. Just talk to the bank directors, they are already saying, ‘Oh no, we’ve been given too much money’,” Purbaya told reporters, mimicking a gesture of executives holding their heads in exasperation during a briefing at the State Palace.
Read also: Govt to deposit $12b in commercial banks to ‘jump-start’ lending
He said that, when the plan was first discussed, bankers told him they could only work with a fraction of the Rp 200 trillion injection.
“They said, I could only absorb Rp 7 trillion. I said, you wish,” Purbaya said. “Let’s give them the whole amount, so they can figure it out. It shouldn’t be just me doing all the thinking.”
The minister stressed that the measure would not strain fiscal buffers, since government reserves at the central bank were far larger than the reallocated sum.
