OJK Reviews Policies To Control Banking NIM

JAKARTA - The Financial Services Authority (OJK) is reviewing policies to control banking Net Interest Margin (NIM) which encourages transparency of credit interest rate information.

"In accordance with the mandate of the P2SK Law (Financial Sector Development and Strengthening Law), the OJK is reviewing and issuing policies that encourage transparency of information related to lending rates by banks," said OJK Banking Supervision Chief Executive Dian Ediana Rae in a written statement, in Jakarta, quoted from Antara, Saturday, August 5.

Furthermore, the principles that will be regulated include the basic components of interest rates and aspects of transparency to the public regarding the basic interest rate of credit.

"This policy is expected to contribute to controlling the current banking NIM," he said.

Dian said that his party will continue to encourage digitalization efforts in the banking sector in expanding the reach of services to the community, so that credit interest rates become more competitive through market mechanisms.

"On the other hand, the use of data, which can be sourced from the Financial Information Service System (SLIK) and the Credit Information Management Agency (LPIP) as an effort to reduce the asymmetric information between banks and debtors," he said.

Until mid-2023, banking Net Interest Margin (NIM) is still high on average.

Referring to OJK data, the position of NIM in the banking industry in April 2023 was at the level of 4.77 percent, an increase compared to the same period last year which was at the level of 4.63 percent, but was stagnant from the position in March 2023.

In the 2023 Financial Services Industry Meeting in Jakarta, Monday, February 6, 2023, President Joko Widodo (Jokowi) had mentioned the NIM banking in Indonesia, which at that time was 4.4 percent. According to the President, the NIM bank in the country may be the highest in the world.