Again, BI Boss Asks Private Banks To Immediately Lower Credit Interest Page all

JAKARTA, KOMPAS.com – Governor of Bank Indonesia (BI) Perry Warjiyo asked private banks in the country to immediately reduce them credit interest rates, following in the footsteps of State-Owned Enterprises (BUMN) banks.

As is known, state-owned banks have lowered their lending rates since March 2021 in response to the cut in the BI-7DRRR benchmark interest rate to the level of 3.50 percent.

“Himbara banks have lowered their lending rates, other banks, come on, come on, let’s lower their lending rates,” Perry said in a virtual discussion on the Acceleration of National Economic Recovery, Thursday (25/3/2020).

Also read: The Decrease in Bank Credit Interest Is Still Limited

Perry then appreciated the steps taken by Himbara and PT Bank Central Asia Tbk for responding to the policy of lowering the central bank’s interest rate.

“Thank you friends, Himbara (Association of State-Owned Banks) for fulfilling our invitation to aggressively lower interest rates. We see that BCA has also lowered it, come on other banks,” said Perry.

Perry said that the reduction in credit interest rates was aimed at encouraging financing to the business world and the real sector.

Because, until now, there are still problems in credit distribution, both from the supply and demand side.

For this reason, the central bank together with the Financial System Stability Committee (KSSK) took the initiative to carry out transparency of the Prime Lending Rate (SBDK) to find out the reason why banks have not immediately lowered their interest rates.

Also read: 4 State-owned Banks Lower Credit Interest, Which Is The Cheapest?

This is because the components that form interest rates are considered to have decreased. Starting from the cost of funds (cost of fund), cost overhead, and the bank’s profit margin.

“That’s why the four of us (KSSK) also ask banks to reduce credit, that’s why there is transparency in the SBDK,” Perry concluded.

For information, the former Deputy Governor of BI was irritated because banks were slow to cut interest rates.

The bank is also considered to be looking for too high a margin in this difficult situation.

The decline in bank lending rates was very rigid, only 83 bps to a level of 9.70 percent throughout 2020, after BI aggressively cut its benchmark interest rate.

Also read: Akumindo: Lower Loan Interest Only Interesting for MSMEs that Survived the Pandemic

This March, Himbara banks began lowering their prime lending rates.

Bank Himbara acknowledged that the reduction in interest rates could be done because of the burden of the cost of funds (cost of fund) decreased.

The level of banking efficiency has also increased due to a more massive digital role.

In the retail segment, the retail prime lending rate decreased to 8.25 percent.

In the consumer segment, particularly mortgage loans (KPR) to 7.25 percent, and in the non-mortgage consumer segment to 8.75 percent.

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