Jakarta – Bank Indonesia (BI) has decided to extend the policy of reducing the value of penalties for late credit card payments until June 30, 2025. The grace period for credit card payments will expire on December 31 of 2024.
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BI Governor Perry Vargio said the holiday extension includes a minimum payment limit by credit card holders of 5 percent of the total bill. Subsequently, the late payment fine policy is a maximum of 1% of the total invoice and does not exceed IDR 100,000.
“Extend the SKNBI rate policy and credit card policy until June 30, 2025,” Perry said in a press conference on Thursday, November 21, 2024.
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On the other hand, BI also extended the tariff policy of the National Clearing System of Bank Indonesia (SKNBI) until June 30, 2025. The SKNBI rate is IDR 1 from BI to the bank and the maximum SKNBI rate is IDR 2900 from the bank to customers.
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Additionally, credit growth was strong at 10.92 percent year-on-year (y-o-y) in October 2024, according to Perry. On the supply side, strong credit growth is supported by interest on loans.
Then, the continued redistribution of liquid assets to credit by banks and the growth of TPF, as well as the positive impact of Bank Indonesia’s KLM.
According to data as of the end of October 2024, Bank Indonesia received concessions from KLM worth IDR 120.9 trillion to the state banking group, BUSN banks IDR 110.9 trillion, BPD IDR 24.7 trillion IDR and KBAC of state banks. group of IDR 259 trillion distributed. 2.6 billion. IDR set.
“KLM profits are allocated to priority sectors, in particular Minerba and the downstream sector of food, automotive, trade and electricity, gas and water (LGA), tourism and the creative economy, as well as small and medium-sized businesses,” he explained.
At the same time, demand-side credit growth is supported by sustained performance of corporate businesses, in line with estimates of continued good economic growth.
Credit growth in most sectors of the economy by sector was ensured at a stable pace. This is especially true in the business, commercial, and industrial service industries.
By usage group, the growth of working capital credit, investment credit and consumer credit was 9.25 percent (year-on-year), 13.63 percent and 11.01 percent, respectively, in October 2024.
Sharia financing then grew by 11.93 percent year-on-year. Meanwhile, loans to MSMEs grew by 4.76 percent year-on-year.
“With these changes, credit growth is expected to remain in the range of 10 to 12 percent in 2024 and increase in 2025,” he added.
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According to data as of the end of October 2024, KLM granted concessions worth IDR 120.9 trillion to the state-owned banking group Bank Indonesia, IDR 110.9 trillion to BUSN banks, IDR 24.7 trillion to the BPD and IDR 259 trillion. trillions of IDR to the State. Distributed by the KBAC banking group. 2.6 billion. IDR set.
How does the extension of reduced penalties for late credit card payments impact consumer behavior and spending in Indonesia?
Guest 1: Dr. Steven Lee, Chief Economist at Standard Chartered Bank Indonesia
Host: Good morning, Dr. Steven. Thank you for joining us today. Could you share your insights on Bank Indonesia’s decision to extend the policy of reducing the value of penalties for late credit card payments and the SKNBI rate policy until June 30, 2025? What impact do you think this will have on the Indonesian economy?
Dr. Steven: Good morning! It’s a pleasure to be here. The extension of the policy is definitely a positive move for the Indonesian economy as it provides some relief to consumers and businesses who are still recovering from the impact of the pandemic. Reducing the penalties for late credit card payments could potentially increase consumer spending, which is essential for economic growth. Additionally, extending the SKNBI rate policy will help maintain the liquidity in the financial system and support the growth of credit. However, we should also consider that high credit growth could potentially lead to financial instability if not managed properly. It’s important for Bank Indonesia to continue monitoring the situation closely and ensure that financial institutions are adhering to prudent lending practices.
Host: That’s a great point, Dr. Steven. Moving on to the credit growth that was discussed in the article, can you explain why it has remained strong despite the pandemic?
Dr. Steven: Yes, certainly. Despite the pandemic, Indonesia’s economic fundamentals remain relatively strong. The government’s economic stimulus packages and supportive monetary policies have helped to cushion the impact on the economy. Moreover, the country’s large population and growing middle class provide a vast consumer base for businesses. Furthermore, the government’s initiatives to improve the ease of doing business and attract foreign investment have also contributed to the growth of the business sector. Additionally, the financial sector in Indonesia has become more sophisticated over the years, with new financial products and services being introduced to meet the changing needs of consumers and businesses.
Host: That’s very informative. Now shifting to the uses of credit, the article mentioned that credit growth in various sectors such as working capital, investment, and consumer credit has been ensured. Can you provide more information on these sectors and how they are contributing
