BPD Asked to Raise Class, Not Just "Parking Funds" in the Middle of Fiscal Pressure

JAKARTA - Chairman of the Association of Regional Development Banks (Asbanda), Agus H. Widodo, emphasized that Regional Development Banks (BPD) must transform into the main engine of regional economic drivers amid fiscal pressures, especially on Transfer to Regions (TKD).

Agus said that the strength of the regional economy in the future would no longer depend solely on the Regional Revenue and Expenditure Budget (APBD), but also on the ability of the BPD to manage and accelerate the flow of funds in the region.

"BPD should not only be a parking lot for local government funds. BPD must be upgraded to become an orchestra for managing local finances," he said.

He assessed that pressure on the TKD in the state budget had the potential to narrow the regional fiscal space and suppress development spending. However, this condition actually opens up opportunities for the BPD to strengthen the role of intermediation to the productive sector.

According to Agus, the BPD needs to take a role as a guardian of regional liquidity as well as an accelerator of regional economic growth.

The three main focuses of the BPD transformation in the future include strengthening governance and risk management, digital transformation, and increasing its role in the regional economic ecosystem, including support for MSMEs.

"In the midst of fiscal constraints, the BPD is a solution, not just a complement," he said.