Bank Credit Interest Rates Fall to 8.76 Percent in March 2026, OJK: Trend Continues to Decline
JAKARTA - The Financial Services Authority (OJK) assesses that the trend of declining bank credit interest rates will continue in line with the decline in benchmark interest rates and the improvement in the funding structure of the national banking industry.
Head of the OJK Banking Supervisory Executive Dian Ediana Rae said the weighted average interest rate on rupiah loans in March 2026 was recorded at 8.76 percent, down from 8.80 percent in February 2026 and 9.20 percent in March 2025.
"The decline in credit interest rates mainly occurred in productive loans, both Working Capital Loans and Investment Loans, in line with the decline in fund costs and the BI Rate reduction policy in the past year," said Dian.
Dian explained that the reduction in the BI Rate from 5.75 percent in March 2025 to 4.75 percent in March 2026 also contributed to the decline in the weighted average interest rate of the Rupiah Third Party Fund (DPK) to 2.66 percent.
"In general, the transmission of the decline in the BI Rate to credit interest rates requires a certain time lag. Therefore, credit interest rates are expected to remain in a downward trend," said Dian.
However, Dian emphasized that the adjustment of credit interest rates at each bank would depend heavily on the business strategy and cost of fund (CoF) structure of each bank.
"OJK continues to urge banks to gradually adjust the interest rate on credit while still paying attention to market conditions and maintaining a healthy financial ratio," he said.
In the midst of this trend of declining interest rates, OJK assesses that the liquidity conditions of the national banking industry are still adequate to support the distribution of financing to the real sector, even though the dynamics of the global and domestic economies are still developing.
Furthermore, Dian said that future bank credit growth would still be influenced by economic conditions and the investment climate.
"The synergy between the government, regulators, and all stakeholders needs to continue to be strengthened so that the momentum of economic growth remains maintained and healthy and productive credit distribution can continue," said Dian.
On the other hand, the outlook for the domestic economy is still in the optimistic zone.
This is reflected in the March 2026 Consumer Confidence Index (IKK) of 122.89 and the Indonesian Manufacturing PMI which remained expansive at 50.1.
"These indicators show that household consumption and national manufacturing activities are still well maintained so that they can support future bank credit growth," said Dian.
In facing the situation of global economic volatility and weakening of the rupiah exchange rate, Dian stated that OJK would tighten supervision of each bank individual as well as sharpen analysis of each potential risk to banks.
OJK also asked banks to continue to strengthen risk mitigation through the implementation of stress tests with various scenarios.
"Banking needs to identify risks early and prepare appropriate and measurable mitigation steps," said Dian.
Meanwhile, the position of undisbursed bank loans as of March 2026 was recorded at Rp. 2,527.46 trillion or increased by 7.35 percent compared to March 2025 of Rp. 2,354.50 trillion.
The undisbursed loan is a loan facility that has been approved by the bank but has not been withdrawn by the debtor, among others, due to business cycle considerations, progress in project completion, and management of the company's cash flow.
"Although nominally increased, the percentage of undisbursed loans to total loans decreased from 29.77 percent to 29.19 percent. This shows that national banks still have enough room to support productive financing and encourage real sector growth," said Dian.
According to Dian, undisbursed loans in the future will experience a decline in line with adjustments to banking business strategies and increased business optimism towards the prospects of the national economy.
"We are optimistic that the national banking industry will continue to have strong resilience in facing global and domestic dynamics. With adequate liquidity, the trend of declining credit interest rates, as well as policy synergies between the government, regulators, and the financial services industry, banks are expected to continue to strengthen the function of intermediation in a healthy, prudent, and sustainable manner to support national economic growth," concluded Dian.