'The issuance of the NCD is to increase the variety of short-term financial instruments in the Indonesian financial market and we saw this as an opportunity to increase funding book diversification from mostly one-month tenors to three, six, and nine-months,' Commonwealth Bank Indonesia president director Tony Costa said in an official release on Monday.

'Our initiative to launch the NCD is also intended as a support in the effort to strengthen the Indonesian banking industry with financial market deepening, with alternative funding instruments in the long run. The banking industry will benefit from an increased capacity in managing their liquidity and banking-book portfolio,' Tony added.

NCD are deposits in form of certificates of deposit that can be transferable or tradeable. The mechanism of certificate deposits issuance is similar to that of deposits. The difference is on the implied interest rate where, on the certificate deposits, the interest rate will be paid upfront, therefore the customer or investor will receive a discount at the time of fund placements or trading.

Acting as arranger in this NCD issuance is BCA Sekuritas.

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