Banks Are Ready To Face Bad Credit From COVID-19

JAKARTA - It is estimated that the impact of COVID-19 on the country will also target the banking world. One of the impacts of concern for Indonesian banks is related to non-performing loans (NPL), which has the potential to increase.

President Director of PT Bank Mandiri (Persero) Royke Tumilaar admitted that his party was ready if that would happen. He stated that Bank Mandiri would mitigate the potential increase in bad credit.

"Don't wait for the bad (credit) to take action. I am sure there are no traffic jams yet but (there is) anticipation to go there because the purpose of this policy is to anticipate it, ”said Royke Tumilaar in Jakarta, Thursday, March 5.

Royke Tumilaar said that the preparation for risk mitigation was carried out by implementing policy packages issued by Bank Indonesia (BI) and the Financial Services Authority (OJK).

"There are two things in banking, namely healthy credit and safe liquidity, so both OJK and BI responded well. "There are policies to support liquidity and credit quality," he said.

President Director of PT Bank CIMB Niaga Tbk Tigor M Siahaan said the corona virus outbreak was a threat in itself for banks, so it needed good coordination with the government to maintain liquidity so that NPLs could be suppressed.

"Very good cooperation with fiscal solutions. "While this is not something very deep, we continue to anticipate and provide easing to our customers," said Tigor.

President Director of PT Bank Rakyat Indonesia (Persero) Tbk Sunarso sees the corona virus outbreak as not only a challenge but also a positive thing that can improve risk management of the banking sector so that it becomes stronger.

"There are challenges, but the positive thing is that our risk management is getting more alert and ready. We are ready with stress testing through policy orchestration, "he said.

Sunarso is optimistic that the banking sector will be able to overcome various challenges from the impact of the corona virus, including those related to NPLs because there has been good coordination and risk management.

"We are optimistic because the coordination is getting better and the risk management is good so it is not too shocking because we often face this," he said.

For information, Bank Indonesia decided to lower the 7-Day Reverse Repo Rate by 25 basis points to 4.75 percent and the deposit facility and lending facility rates by 25 basis points to 4.00 percent and 5, respectively. 5 percent.

Not only that, BI also lowered the minimum reserve requirement (GWM) ratio for conventional and sharia commercial banks, which was originally 8 percent of TPF (Third Party Funds) to four percent of TPF to increase liquidity in banks.

Meanwhile, the Financial Services Authority (OJK) also relaxed the provisions for calculating collectability or the classification of conditions for special credit payments for debtors whose business was disrupted due to the corona virus.