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BI expects loan growth to boost economy
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The Bank Indonesia building on Jl. MH Thamrin in Central Jakarta. (Shutterstock.com/GeorginaCaptures)
B
ank Indonesia (BI) is expecting a growth in loans this year to help boost the economy, as a regulation that was revised to accommodate lenders will take effect in July.
The current version of the regulation, called the macroprudential intermediation ratio (RIM), was introduced in October of last year to help conventional and sharia banks to better manage their liquidity.
Under the newer version of the regulation, banks are expected to increase their RIM from between 80 and 92 percent to between 84 and 94 percent.
Starting July 1, the revised regulation would allow banks to provide more loans to businesses and, eventually, help spur the domestic economy, BI Governor Perry Warjiyo said.
However, 21 banks had yet to comply with the minimum RIM rate as stipulated in the prevailing regulation, said BI deputy governor Erwin Rijanto.
“When the RIM’s [minimum level] is raised to 84 percent, we will encourage banks that still have a low level of intermediation [to channel more loans],” he said, referring to banks’ role of collecting third-party funds and channeling them to businesses in order to grow the economy.
With the revised regulation, loan growth this year was expected to reach the upper limit of BI’s projection at around 10 to 12 percent, he said.
