Thursday, 5 June 2014

THE BANKING SECTOR URGED TO PUT BRAKES ON CREDIT GROWTH



The national banking sector was urged to put bakers on credit extention to only around 15% - 17% in line with Indonesia’s economic slowdown this year which was projected at around 5.1%. “As Indonesia’s economic growth prospect was corrected to 5.1%, the role of banks’ intermediary was slower compared to that of 2013. Slowdown in credit growth was quite synchronous with slow growing economy.” This was statement made by BI’s Governor Agus Martowardojo on the occasion of launching of the book entitled “To strengthen Financial System Stability amidst external imbalance in Jakarta” on Monday [19/5].

Somehow Agus said, pressures on the banking sector was still under control. Bank’s performance had also been positive as indicated by Capital Adequacy Ratio [CAR] at 18.36%. “We should be grateful because the pressures was still under control and tend to subside since end of 2013 to arrive at normal level. However we still have to be on the alert. In terms of liquidity, higher credit growth caused increasing liquidity with its impact or inter-bank competition to enhance third [arty fund [DPK] with impact on increased credit rate.” He remarked.

Based on the above, Agus called out to enhance effort to control risk by way of strengthening bank’s capital structure, credit management, strengthening of infra-structure and control over payment system, coordination with OJK, opening access for UKM small business, strengthening of market liquidity through market in-depth probing. “The direction of macro policy 2014 would be focused on mitigating systemic and transmission from credit liquidity risk and market. Since the transfer of micro bank control from BI to OJK, BI had been focusing on macro watching. The effort to maintain financial stability needed coordination, so we appreciate intercorporate teamworking” Agus Martowardojo concluded. (SS)   

Business New - May 23, 2014  

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